The lawyer who represented payday lenders accused of evading state regulations by using Native American tribes and a bank as fronts has been sentenced to eight years in federal prison.
Wheeler Neff, 69, of Wilmington, Delaware, was sentenced Friday on racketeering conspiracy and fraud convictions, The Philadelphia Inquirer reported .
Neff represented Charles Hallinhan, 77, who is awaiting sentencing scheduled for July on conspiracy and fraud convictions last fall.
Authorities said Hallinan charged astronomical interest rates of more than 700 percent on the short-term loans in a "rent-a-tribe" and "rent-a-bank" scheme that netted his companies more than $688 million in revenue between 2008 and 2013 from hundreds of thousands of customers.
Neff, flanked by family, friends and fellow church congregants, told U.S. District Judge Eduardo Robreno that he believed at the time that everything he was doing was legal.
"I now realize how people can be crushed under the weight of payday loans," he said. "However, it was never my intention to harm anyone."
District Judge Eduardo Robreno described deals that Neff and Hallinan struck with their Native American partners as "unlawful, a sham, and a fraud."
"A businessman can have a great deal of skill in completing a deal, but ultimately it is the lawyer that needs to implement it," Robreno said. "Without Mr. Neff, (these deals) would not have gone through. . There was a monumental failure in this case."
In addition to the prison term, Neff was ordered to pay $50,000 in fines and forfeit more than $350,000.
Pennsylvania and more than a dozen other states have passed laws that criminalize payday loans, which are named as such because they're issued in small amounts and meant to be repaid on a customer's next paycheck.
Payday lenders say they have helped thousands of cash-strapped consumers, many of whom do not qualify for more traditional lines of credit. Assistant U.S. Attorney Mark Dubnoff ridiculed that notion.
"That's like a heroin dealer's defense," he said. ". You can't help out heroin addicts by giving them heroin, just like you can't help out a person who needs money by giving them a usurious loan."
