November 17, 2017

Fraudster of the Week — Payday Loan Scammer Richard Moseley Sr.

By the C|C Whistleblower Lawyer Team

On Wednesday, a New York jury convicted 73-year-old Richard Moseley Sr. of a $220 million fraud perpetrated against hundreds of thousands of financially vulnerable payday loan borrowers. Moseley stood trial for nearly three weeks on charges of wire fraud, aggravated identity theft, and violations of the Racketeer Influenced and Corrupt Organizations Act and the Truth in Lending Act.

At trial, prosecutors demonstrated that Mosely, who operated an online business called Hydra Lenders, entered into loan agreements that materially understated how much the loan would cost the borrower. According to the Department of Justice, “[t]he loan agreements suggested, for example, that the borrower would pay $30 in interest for $100 borrowed. In truth and in fact, however, Moseley structured the repayment schedule of the loans such that, on the borrower’s payday, the Hydra Lenders automatically withdrew the entire interest payment due on the loan, but left the principal balance untouched. As a result, on the borrower’s next payday, the Hydra Lenders could again automatically withdraw an amount equaling the entire interest payment due (and already paid) on the loan.” Prosecutors further demonstrated that some of Moseley’s victims had not even authorized the loans.

Prosecutors assert that Moseley took advantage of more than 600,000 customers and generated $161 million in revenues. Moseley used his ill-gotten gains to fund a high-end lifestyle of vacation homes, high-end cars, and country club memberships. Mosely now faces more than 20 years in prison.

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