Charges brought against owner of $161M fraudulent payday lender

February 12, 2016

WASHINGTON (2/12/16)--Criminal charges have been filed against a defendant accused of extending predatory loans to more than 620,000 struggling consumers, including victims who never applied for the loans, according to the Federal Reserve’s Inspector General.

In a joint action with the Fed, the U.S. Attorney for the Southern District of New York and New York Office of the Federal Bureau of Investigation brought charges against Richard Moseley Sr.

Moseley is alleged to have operated a payday lending enterprise that systematically evaded state usury laws in order to charge illegally high interest rates, and for issuing payday loans to consumers who never even sought them.

The defendant owned and operated a group of payday lenders, known as Hydra Lenders, that was open from approximately 2004 to September 2014. From November 2006 through approximately August 2014, Hydra Lenders is alleged to have generated about $161 million in revenues. 

Not only did Hydra Lenders allegedly target and extend loans at illegally high interest rates of 700%, but Hydra’s loan agreements supposedly “materially understated the amount the payday loan would cost, the annual percentage rate of the loan, and the total of payments that would be taken from the borrower's bank account,” according to the Fed.

Moseley is charged with one count of conspiracy to collect unlawful debts in violation of Racketeer Influenced and Corrupt Organizations (RICO) Act, one count of collecting unlawful debts in violation of RICO, one count of conspiracy to commit wire fraud, and one count of wire fraud, each of which carries a maximum term of 20 years in prison; and one count of violating the Truth in Lending Act, which carries a maximum term of one year in prison.