Banking

MaxLend Faces RICO, Usury Lawsuit Seeking Treble Damages

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MaxLend Faces RICO, Usury Lawsuit Seeking Treble Damages

In the heartland of America, a legal battle is brewing that could have far-reaching implications for the payday lending industry. The central figure in this drama is Mary Hanafi, an Indiana resident who has taken on a formidable group of defendants, including Uetsa Tsakits, Inc., which does business as MaxLend, and a host of other individuals and entities.

The lawsuit, filed in the United States District Court for the Southern District of Indiana, accuses the defendants of making predatory and unlawful loans to Indiana residents. Central to this claim is the allegation that the lending business conducted through MaxLend is not, as it claims, affiliated with a Native American tribe, but is instead owned and operated by two individuals - David Johnson and Kirk Michael Chewning.

"Defendants targeted Indiana residents for high-interest loans," the lawsuit alleges. These loans, Hanafi claims, violate Indiana's usury laws, which cap the annual percentage rate (APR) for consumer loans at 36% for supervised loans and 72% for loans made by licensed lenders.

But the allegations don't stop there. Hanafi also accuses the defendants of violating the Racketeer Influenced and Corrupt Organizations Act (RICO), a federal law originally designed to combat organized crime. In this context, RICO is being used to target what Hanafi alleges is a criminal enterprise engaged in a pattern of racketeering activity, specifically, the making of usurious loans.

The lawsuit paints a picture of a complex web of individuals and entities allegedly involved in the lending activities. In addition to MaxLend, Johnson, and Chewning, the defendants include Cane Bay Partners VI, LLLP, Dimension Credit (Cayman), L.P., Strategic Link Consulting, LP, Esoteric Ventures, LLC, InfoTel International Ltd., M. Mark High, Ltd., Kim Anderson, Jay Clark, and Does 1-20.

The damages Hanafi seeks are substantial. Under the Indiana Uniform Consumer Credit Code, she could be entitled to statutory damages. Under RICO, she could be awarded treble damages, which are three times the amount of the actual damages suffered. Hanafi is also seeking attorney's fees, expenses, and costs.

The lawsuit is a stark reminder of the high stakes in the payday lending industry. If Hanafi's allegations are proven true, it could expose a major payday lender as a predatory operation, potentially leading to significant reforms in the industry. But for now, these remain allegations, and it will be up to the court to determine the truth.

Case Facts

  • Status:
    Lawsuit Filed
  • Case Number:
    1:23-cv-01765
  • Filing Date:
    September 29, 2023
  • Jurisdiction:
    U.S. District Courts
  • State:
    Indiana
  • Court:
    Indiana Southern District
  • Plaintiff:
    Mary Hanafi
  • Defendant:
    Uetsa Tsakits, Inc.; David Johnson
  • Plaintiff Firm:
    Edelman, Combs, Latturner & Goodwin, LLC
  • Defendant Firm:
  • Claims Administrator:
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Kevin Salzman, Esq.
Kevin Salzman, Esq.
Reporter and Licensed Attorney
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