United States Attorney for the Eastern District of Pennsylvania Announces Participation in National Money Mule Initiative; Obtains Three Civil Injunctions Against Alleged Money Mules Involved in Lottery Scams
PHILADELPHIA – A Delaware attorney who spent nearly a decade helping clients collect hundreds of millions of dollars in illegal payday loans was sentenced Friday to eight years in federal prison, fined $50,000 and ordered to forfeit more than $356,000 in criminal proceeds
Wheeler K. Neff, 69, of Wilmington, was convicted in November of racketeering, conspiracy, and fraud charges. A jury found that Neff and his co-defendant, Charles M. Hallinan, 77, of Villanova, conspired to collect more than $490 million in debt from small short-term loans that were commonly known as “payday loans,” because the customers were supposed to pay them back with their next paychecks.
U.S. District Judge Eduardo C. Robreno ordered Neff to report to prison in 45 days. Hallinan is scheduled to be sentenced on July 6, 2018.
Between 1997 and 2013, Hallinan owned, operated, and financed numerous companies that issued and collected debt from loans that had annual interest rates typically exceeding 780 percent. In Pennsylvania, it is a crime to charge more than 25 percent annual interest on such loans, and more than a dozen other states have interest rate limits of 36 percent or less.
“Payday loans prey on those who can least afford it. That’s why they are illegal in Pennsylvania and many other states,” said U.S. Attorney William M. McSwain. “This defendant has never shown a hint of remorse for his actions nor sympathy for his victims, and during trial he told one lie after another. Perhaps a sentence like this will give him time to seriously consider the lives he has impacted.”
Neff drafted sham contracts designed to give the false impression that Hallinan’s companies were owned by Indian tribes that could claim “sovereign immunity” from laws they did not like. In 2011 and 2012, Neff engaged in a similar scheme with another payday lender, Adrian Rubin, 61, of Jenkintown. In return, Neff received hundreds of thousands of dollars a year in legal fees.
“As an attorney, Mr. Neff should realize that a civilized society requires obedience to the law, including those laws he didn’t happen to like,” said U.S. Attorney McSwain.
Neff also helped Hallinan defraud nearly 1,400 people who had brought a class action lawsuit in Indiana against one of Hallinan’s companies. Neff conspired with Hallinan to make it appear that his company had no assets, employees, or officers, and was owned by an Indian chief living in Canada in order to entice the plaintiffs to accept a discounted settlement on their claims.
The case was investigated by the Federal Bureau of Investigation, the United States Postal Inspection Service, and Internal Revenue Service Criminal Investigations. It is being prosecuted by Assistant United States Attorneys Mark B. Dubnoff and James Petkun.