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June 22, 2015

Montco man charged in illegal payday loan scheme

Adrian Rubin also charged with helping sons in credit card scheme

A Montgomery County man was charged in a racketeering conspiracy for allegedly operating an illegal payday lending business, U.S. Attorney Zane David Memeger announced Monday.

Adrian Rubin, 58, of Jenkintown, allegedly conspired to evade state usury laws and other payday loan restrictions while working for multiple businesses, including his own, that issued short-term loans, known as payday loans between 1998 and 2012. In doing so, Rubin and his co-conspirators allegedly reaped tens of millions of dollars, much of which came from collecting usurious fees.

Pennsylvania prevents collecting interest, fees and other loan charges at annual rates exceeding 36 percent. Payday loans are short-term loans of small amounts of money in which borrowers pledge to repay by using their next income payment. Some loans have charges or fees ranging from 10 to 30 percent, which translate to annual percentages rates of 260 to 780 percent.

Rubin is charged with conspiracy to violate the Racketeer influenced and Corrupt Organizations Act (RICO) and related mail and wire fraud charges.

As part of the conspiracy, Rubin allegedly paid a federally-insured bank to pretend it was the payday lender and relocated his operations to a state considered usury friendly. He allegedly paid a Native American tribe to pretend that it was the payday lender as part of a scheme to have the tribe claim sovereign immunity protected it from state usury laws.

Rubin co-founded CRA Services, an internet payday lending company that was in business from 1998 to 2003. 

Rubin also allegedly incorporated two other payday businesses — Utah-based Global Pay Day Loan and Delaware-based National Services LLC —  in the names of his father-in-law and a family friend, forging their signatures on company documents. He allegedly used their names to hide his criminal record, which includes 1997 guilty pleas for tax evasion, conspiracy to defraud the United States and failing to file currency transfer reports.

He also is charged with helping his two sons, Blake and Chase, conduct a multi-million-dollar telemarketing scam that duped more than 70,000 people into buying a falsely-marketed credit card. Each of his sons pleaded guilty and are awaiting sentencing.

If found guilty of all charges, Rubin faces an advisory sentencing range of at least 10 years in prison with a statutory maximum sentence of 65 years in prison, three years of supervised release, a $1 million fine and a $400 special assessment.

Assistant U.S. Attorneys Mark B. Dubnoff and Joel M. Sweet are prosecuting the case. It was investigated by the FBI, U.S. Postal Inspection Service and the IRS.