Six Jews—officially described by the US Department of Justice as part of a “godfathers of payday lending” gang—have been convicted and imprisoned for their role in a nationwide racket which included fraud, an illegal 780 percent interest racket, and the use of a California Indian tribe’s status to hide their criminal activities.
According to a press release issued by the US Department of Justice (DOJ), US Attorney William M. McSwain announced that Adrian Rubin, 61, of Jenkintown, was sentenced to 37 months’ imprisonment and three years’ supervised release, ordered to pay a $100,000 fine and $400 special assessment, and ordered to forfeit $9,621,800 in proceeds from his crimes.
“Rubin previously admitted to collecting unlawful debt from payday loans and helping his sons, Blake and Chase Rubin, orchestrate a multi-million-dollar telemarketing scam,” the DOJ statement said.
Adrian Rubin previously pleaded guilty to one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (“RICO”), one count of conspiracy, and two counts of mail fraud.
The RICO conspiracy charge arose from Rubin’s participation in a conspiracy to collect debt from so-called “payday loans”–short-term consumer loans that typically come due on the borrower’s next payday–that had annual interest rates exceeding 780 percent.
Such loans are illegal in Pennsylvania and many other states. Rubin admitted that in 2012, he collected $2,069,327 in payday loan debt.
Rubin’s RICO co-conspirators included Charles M. Hallinan, the reputed “godfather of payday lending,” and Wheeler K. Neff, who served as Hallinan and Rubin’s lawyer, the DOJ statement continued.
Rubin admitted that he conspired with Hallinan and Neff to hide his payday lending behind a California-based Indian tribe for the purpose of circumventing state usury laws.
Hallinan and Neff were both convicted by a federal jury last November of RICO and other charges. In July 2018, Judge Robreno sentenced Hallinan to 14 years’ imprisonment. In May 2018, Judge Robreno sentenced Neff to eight years’ imprisonment.
Rubin also obtained $7,552,473 in proceeds from an illegal telemarketing scheme to defraud more than 70,000 people into purchasing worthless credit cards.
The credit cards were marketed as the Platinum Trust Card and the Express Platinum Card and were based on false and misleading representations that the products worked like regular credit cards and could help customers establish or improve their credit.
A report in the Philadelphia Inquirer revealed that these “Platinum Trust Cards” required an up-front payment of $69 to $99 with an additional $19 monthly fee. But instead of receiving a traditional line of credit that could be used anywhere, more than 70,000 victims were mailed flimsy cards that only worked at a collection of 10 online stores that sold a seemingly random assortment of overpriced, off-brand products in large quantities–including a case of 432 shower caps that sold for $430 or a case of $144 “play flutes” for $573.
Another report in that newspaper from June 2015 said that Blake Rubin, 30, of Huntingdon Valley, and Chase Rubin, 28, of Rydal, were charged in 2014 along with Justin Diaczuk, 31, of Philadelphia, with selling those cards for $79.95 each. Their fraud, authorities said, totaled $7.5 million.
“I think this ‘scam’ is a good idea and I think it could work,” Blake Rubin wrote in a 2009 e-mail to his father, according to court documents.
The DOJ statement continued by saying that Chase Rubin also was sentenced to 32 months’ imprisonment, filed $100,000, and ordered to pay forfeiture and restitution. Blake Rubin is scheduled to be sentenced on August 8, 2018, and another co-conspirator, Justin Diaczuk, is scheduled to be sentenced on August 14, 2018.
In addition to the prison sentence imposed today, Judge Robreno ordered Rubin to forfeit $2,069,327 in payday loan proceeds and all $7,552,473 in proceeds from the telemarketing scam.
A November 2017 report in the Philadelphia News and Opinion reported that Hallinan entered into “sham” partnerships with Native American tribes. “He gave them cash, the tribe agreed to act as a front for the illegal loan company, and then when the long arm of the law would come around and tell the companies that they were violating the law by charging exorbitant fees and interest rates, the tribes would declare their sovereignty: Your stinkin’ usury laws don’t apply to us,” the report said.
A January 2018 report in the The Hamodia—a paper which describes itself as the “Daily Newspaper of Torah Jewry,” the US Department of Justice was seeking to recoup more than $491 million from Hallinan in “one of the region’s largest criminal forfeiture proceedings.”
In addition to cash from 18 bank accounts—including more than $484,000 from Hallinan’s personal coffers—the government wanted Hallinan’s $2.75 million lakefront condo in Boca Raton, Fla.; his family’s $1.8 million, 8,000-square-foot home in Villanova; and a small fleet of luxury vehicles including a $142,000 Bentley Flying Spur.
Hallinan and his house in Villanova.
The Hamodia report also revealed that “Hallinan entered the industry in the 1990s with $120 million after selling a landfill company, offering payday loans by phone and fax. He quickly built an empire of dozens of companies offering quick cash under names like ‘Tele-Ca$h,’ ‘Instant Cash USA’ and ‘Your Fast Payday,’ and originated many of the strategies to dodge regulations that were widely copied across the industry.”