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Bank Beat

Freedom of Information

US Settlement Without Fine For Predatory Lending From Malta Needs SDNY Approval Comparative Crime

By Matthew Russell Lee

NEW YORK CITY, February 1 – A dubious settlement of predatory lending claims by the US Consumer Financial Protection Bureau is coming for approval to the US District Court for the Southern District of New York, CFBP announced on Friday afternoon.

The facts of the case are extreme: a lender pretending to be based off-shore in Malta charging interest rates of 700%. But CFPB is settling out the case with no penalties, no restitution, nothing - and asking the SDNY to sign off on it. Will it?   The case is No. 15cv5211 (CM)(RWL) of which the CFPB says "The proposed settlement covers NDG Financial Corp., E-Care Contact Centers, Ltd., Blizzard Interactive Corp., New World Consolidated Lending Corp., New World Lenders Corp., Payroll Loans First Lenders Corp., New World RRSP Lenders Corp., Northway Financial Corp., Ltd., and Northway Broker, Ltd and corporate officials Kimberly DeThomas, Jeremy Sabourin, and William Wrixon. The defendants were not fined."

  These days Inner City Press is covering a range of cases in the SDNY. Not only Michael Cohen, and the back to back UN bribery cases of Ng Lap Seng then Patrick Ho, but also this week's sentencings for the NYPD's guns for cash scandal (18 months in prison) and conspiracy to commit arson in The Bronx (28 months, see below). So what is system predatory lending worth? Doesn't it, too, ravage communities? Compare and contrast... A Bronx man who pled guilty to conspiracy leading to the burning down of a convenience store in the Bronx on 11 September 2016 was sentenced to 28 months in prison on February 1 by Judge William H. Pauley III in the US District Court for the Southern District of New York.

  Arson and The Bronx were for a time synonymous, though few of the perpetrators were caught much less sentenced. Times have changed. Present at Friday afternoon's sentencing on the 20th floor of the Daniel Patrick Moynihan U.S. Courthouse were only the defendant Richard Sanchez and his lawyer, a lone prosecutor, three family members and Inner City Press. Yet the tale was heartbreaking, in its way.

  Sanchez' lawyer Patrick Brackley recounted that he had prior run-ins with the law, citing an incident with a dirt bike. But, he said, Sanchez had used his time out free on bail to re-build his life. Sanchez himself read what he called an open letter to Judge Pawley, speaking about his ten year old daughter, a business he was starting and his brand.

   Judge Pauley said he took note of these but found it inexplicable that someone would, for $500, agree to find people to burn down a store in their own neighborhood. Sanchez was contracted by the owner of one deli to burn down a nearly-open competitor; both stores were across the street from where Sanchez lived. Judge Pauley told Sanchez he was lucky no one had been injured or killed, alluding to the felony murder rule which would have held Sanchez liable.

   While the prosecution via Assistant U.S. Attorney Adam S. Hobson sought a sentence of from 46 to 57 months, Pauley imposed 28 months in prison to be followed by three years of supervised release, at a prison as near to New York City as possible.

   Restitution of $50,000 was ordered, and the same standard $100 mandatory special assessment that SDNY Judge Edgar Ramos had imposed the day before on former NYPD Lieutenant Paul Dean for his admitted role in gun permits for cash scam (see Inner City Press' story here).

  That sentencing drew a gaggle; that of Richard Sanchez for his role in the arson of a store in the Bronx did not. Pauley said to his mostly empty courtroom, The public must understand that people can't be going around burning down stores in their own neighborhood.

The case: United States v. Richard Sanchez, 18 Cr. 26 (WHP)

Upcoming in the SDNY is a just-filed complaint by the Bangladesh Central Bank for the $81 million hacking of its funds, which were then wired through the Federal Reserve Bank of New York, a case that Inner City Press will cover. Times change. Watch this site.


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