After six years of litigation, Kelly Guzzo, PLC recently obtained a $43 million dollar judgment against an individual, Matt Martorello, who was operating an illegal payday loan business. Prior to the entry of the judgment, the Court determined that the plaintiffs (who were represented by Kelly Guzzo, PLC) demonstrated that “the loans were funded by Martorello’s company,” and that they “handled the day-to-day operation of the business of the tribal entities and, for all practical purposes, underwrote, issued, and serviced the loans made by the alleged RICO enterprise.”
Many individuals like Mr. Martorello have attempted to use the tribal lending model to provide cover for their high-interest loans. In this scheme, a payday lender recruits a Native American tribe to establish a tribal business entity to function as the nominal, originating lender to create a tribal veneer for the business. Although the loan contracts and websites claim that the tribe owns and operates the lending entity, often it is a non-tribal payday lender who actually operate the lending business, including the marketing, underwriting, origination, financing, and collection of loans.
State usury laws protect consumers from these predatory high-interest, illegal loans—even if they are supposedly made by a tribal lending entity. For example, absent certain exceptions, Virginia law prohibits the payment of interest on loan at a rate that exceeds 12% per year. By way of another example, Georgia law prohibits the payment of interest on loan at a rate that exceeds 16% per year. Similarly, California law prohibits the payment of interest on a loan that exceeds 10% per year.
Over the past decade, Kelly Guzzo, PLC has represented consumers against individuals and businesses engaged in illegal payday loans. If you have taken out a high interest loan, we can assist you. There is no out-of-pocket cost for these services, and we only recover if you do. Please contact us if you have received a high-interest loan.
