Under federal law, lenders are specifically prohibited from making exorbitant credit extensions. In fact, even conspiring to do so is penalized with up to 20 years in prison and a substantial fine, so if you are being investigated for doing an exorbitant credit extension or other fraud related offense, you should speak to an experienced attorney at economic crimes that can inform you about your legal options.

Required items

Before a person can be convicted of an exorbitant credit extension, prosecutors must establish a number of specific elements. Specifically, they must demonstrate the following:

  • Payment of the credit extension would not be enforceable against the debtor in court
  • The offer of an extension was made with an interest rate higher than 45 percent per year
  • Total amount outstanding extended credit, including unpaid interest, exceeded $ 100

Finally, prosecutors must prove that at the time the extension was offered, the debtor thought that:

  • The lender had already collected an extension of the credit using extortion, or the failure to pay had been punished with extortion practices
  • The creditor had a reputation for using exorbitant methods to collect credit extensions or punish debtors for not paying

When these elements are fulfilled, the courts will consider them if there is sufficient evidence (prima facie) to prove that the extension of the credit was exorbitant in nature. However, if there is no direct evidence of the debtor’s belief regarding the creditor’s collection practices, the courts do allow the presentation of evidence that seeks to establish the creditor’s reputation in the community.

Financing of extorted credit extensions

In addition to prohibiting the use of extortionary methods when extending credit, federal law also prohibits financing such extensions. Specifically, the law deliberately prohibits promoting money or property, regardless of whether it is a gift, a loan, an investment, or the result of a partnership agreement, if there are reasonable grounds to believe that the recipient will use the assets either directly or indirectly to do an extortion of credit. Those convicted of this crime will be fined an amount equal to twice the value of the money or property promoted and could also spend up to 20 years in prison.

Call today to schedule a free consultation with an experienced economic crime attorney

If you are being investigated for a financial crime or have already been charged, please contact Jeffrey S. Weiner, PA Miami Criminal Defense Attorneys at (305) 670-9919 to speak to a dedicated and knowledgeable white collar crime attorney about your case. Our legal team has the experience and resources necessary to help you. You can also contact a member of our team by sending us a short message online.