GRAND RAPIDS, Mich. (WOOD) — A loan scheme that charged people extraordinary interest rates has gotten the attention of law enforcement nationwide. On Wednesday, the case was heard in a Grand Rapids courtroom.
The charge against them is called usury. It has its origins in the book of Exodus. No one can remember the last time someone faced the charge in Kent County.
The defendants — the company Liquidation LLC, William McKibbin III and Mark Weiner — were based in Florida.
Under the name AutoLoans, the Michigan Attorney General charges, the company issued loans to hundreds of people in Michigan and thousands nationwide. The borrower would sign over the title of the car to the loan company, which would then attach a GPS tracker to the vehicle and tow it away if the borrower fell behind.
The problem is that the loans had interest rates that often ranged from 190% to more than 400%. That is usury.
The Attorney General’s Office says the company has $20 million in outstanding loans nationwide.
The defendants have pleaded no contest to 10 counts of usury, which carries a five-year maximum sentence; 10 counts of false pretenses and the most serious charge of racketeering, which carries a 20-year maximum.
But that’s not what the government wants.
“The consent judgement is all about restitution for the between 400 and 500 victims in Michigan,” Assistant Attorney General Matthew Payok told Kent County Circuit Court Judge Paul Denenfeld Wednesday.
The state says the average amount of the loan was $1,500, but people ended up paying much more.
That included Jovanna Walker of Muskegon, who in October 2015 found AutoLoans online and took out an $1,800 loan. She said that when she was 19 days late on payment, the company came and took her truck. It cost her $3,000 to get her vehicle back after two weeks. She said she said paid back nearly $8,000 on an $1,800 loan.
“It messed up my credit. It’s still on my credit right now,” Walker said.
The state is looking to get the victims their money back in a settlement that will likely total hundreds of thousands of dollars. Details of the restitution should be made known by next week.