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Damian Giletto / The News Journal
A prominent Wilmington lawyer was sentenced to eight years in prison for his role in a massive payday loan program that charged clients over 780% interest and evaded state regulations by using Native American tribes and a bank as facades.
Wheeler K. Neff, 69, has used his lawyer’s license to help his clients exploit people’s financial “desperation”, said William M. McSwain, US attorney for the Eastern District of Pennsylvania. Neff also helped payday lenders evade the law, and in doing so, collected hundreds of millions of dollars in debt on loans that typically had interest rates above 780%.
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“We see few cases in which an accused has claimed so many victims that the number of people affected is too high to count,” McSwain said in a statement. “This is such a case.”
Neff was sentenced on Friday, but does not have to surrender to federal authorities who will take him to jail before July 9.
Neff drew up fictitious contracts for payday lenders like Charles M. Hallinan and Adrian Rubin, both convicted and awaiting conviction, McSwain said. These contracts were intended to give the false impression that the Hallinan and Rubin companies were owned by Indian tribes who could claim sovereign immunity from laws that the defendants wanted to evade.
Lawyer in Delaware since 1974, Neff specializes in corporate and banking law. He was also an attorney for Hallinan, 77, of Villanova, Pa., Who ran the payday loan business.
As an example of men’s disappointments nationwide, McSwain said Neff helped Hallinan defraud about 1,400 people who filed a class action lawsuit in Indiana against one of Hallinan’s companies, Apex 1 Processing Inc.
Fearing that Hallinan could face personal exposure of up to $ 10 million if plaintiffs prove Hallinan owned the payday loan business, the men conspired to make it appear that Apex 1 had no assets. , employee or officer and was owned by an Indian chief living in Canada in order for the plaintiffs to agree to a discounted settlement on their claims.
Neff also asked Hallinan to change his tax returns and retroactively transfer the business activity of Apex 1 to another of his companies. He then ordered people to transfer all documents relating to Apex 1 to tribal lands in Canada, where they would never be found by the applicants.
A federal jury in Philadelphia found Neff and Hallinan guilty in November of federal racketeering and fraud conspiracy.
“As a lawyer, Mr. Neff should realize that a civilized society demands obedience to the law, including laws he dislikes,” McSwain said. “Neff wrote these contracts to help customers collect their illegal debts for as long as possible without getting caught.
“In return, Neff received hundreds of thousands of dollars a year in legal fees.”
Last year, federal prosecutors called on Pennsylvania Eastern District Judge Eduardo C. Robreno to seize Neff’s Alapocas home in order to collect the proceeds of his crime, which amounted to more than $ 356,000. .
Prosecutors said Neff used his home, located in Block 100 of School Run, to further the business of the payday loan program. But Neff argued that he only used his home office to run the project – not the whole house.
Robreno agreed with Neff in March and told federal prosecutors they could only foreclose part of the house that equals the head office, which is 12.11% of the property.
When the government sees this amount fully paid, it is complicated for several reasons, including the house is partly owned by his wife so the federal government only has a 12.11% stake.
Some things could happen for the federal government to receive the remaining money, including making a deal with the Neffs to sell the house. They can also enter into an agreement in which the government releases its debt on the house if the couple gives them the market value of the property.
Neff has already paid about half of the over $ 356,000 selling a property in Kansas.
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Contact Esteban Parra at (302) 324-2299, firstname.lastname@example.org or Twitter @ eparra3.