Defending Against Allegations of Loan Sharking Through the Mail

Defending Against Allegations of Loan Sharking Through the Mail

Being accused of loan sharking can be really scary. Let’s talk about what loan sharking is, what laws apply, and how you can defend yourself if you get accused of it.

What is Loan Sharking?

Loan sharking is when someone lends money at super high interest rates that are illegal. It’s different from normal loans because loan sharks often use threats and violence to get borrowers to pay up. They target desperate people who can’t get loans anywhere else.

Some signs you might be dealing with a loan shark:

• Crazy high interest rates, like over 100% per year
• Threats if you don’t pay on time
• Taking your car, home, or other collateral if you default
• Making you sign confusing or blank documents

Loan sharks are often involved with organized crime. The business is very unregulated and dangerous.

What Laws Apply to Loan Sharking?

There are a few major laws used to prosecute loan sharks:

Usury Laws

Most states have usury laws that cap interest rates on loans. Rates over 100% are generally considered criminal usury.

RICO Charges

The federal Racketeer Influenced and Corrupt Organizations Act (RICO) can be used against loan sharks. RICO targets organized crime. Prosecutors have to show a pattern of illegal activity by a criminal enterprise.

Extortion

Using threats to collect debts is extortion, which is illegal. Loan sharks often use violent threats which can lead to extortion charges.

Defending Against Allegations

So what can you do if accused of loan sharking? Here are some defenses that may help:

No Proof of Threats

If there’s no evidence you actually threatened violence, extortion charges will be hard to prove. Keep written records showing you collected debts peacefully.

Interest Rate Disputes

You may be able to argue the interest rate was lower than prosecutors claim. Produce documents like loan agreements and payment records.

Attack Credibility

Look for ways to undermine the credibility of witnesses testifying against you. For example, show they have a grudge or criminal history.

Entrapment

If undercover agents pushed you into committing crimes you otherwise wouldn’t, you may have an entrapment defense.

Technicalities

Look for technical problems with the prosecution’s case. For example, issues with evidence collection or statutes of limitations.

Avoiding Problems

Here are some tips to avoid loan sharking accusations:

• Keep interest rates reasonable and compliant with state laws
• Use clear loan agreements understood by borrowers
• Only make legal threats to collect like lawsuits
• Don’t require unreasonable collateral like homes
• Avoid ties to organized crime

Running a clean lending business and treating borrowers fairly is the best protection. But if you do get accused, don’t panic. An experienced criminal defense lawyer can help build your case.

Loan sharking laws are complex, but defending yourself is possible. With the right evidence and legal strategy, you can avoid harsh penalties. The important thing is to take any charges seriously and get a lawyer on your side immediately.