Monday, July 24, 2006

John Gill Jr., the lender who has been under fire in multiple states for alleged payday loan violations, faces a felony trial today in Florida.

The 48-year-old from Phenix City, Ala., appears in Pensacola, Fla., court today at 9 a.m., where a state prosecutor will attempt to prove his guilt in unlawfully conducting a business enterprise. Gill pleaded not guilty to the familiar charges at his arraignment.

Predatory lending accusations have dogged Gill across several states, and for many years now. Jean Ann Fox, director of consumer protection for the Consumer Federation of America, said people charged with such crimes often attempt to disguise their illegal practices by concocting methods of making them appear legal by that state's standards.

For example, a business offering faxless payday loans might issue a $100 cash rebate to someone for a telephone card or Internet access — rather than stating outright that a payday advance loan is being issued — and then take a percentage of that person's paycheck every two weeks for the next year.

"State after state has challenged that," Fox said.

Lynn Drysdale, a consumer attorney with Jacksonville Area Legal Aid, said businesses accused of such crimes give criminal loans under a ruse like the Internet example, as well as failing to provide customers with required information.

"I sued Mr. Gill last year. Never had the pleasure of speaking with him," Drysdale said.

While Florida law allows payday loan businesses to charge up to a 390 percent rate of interest, Drysdale claims Gill went higher. In Texas, Gill was accused of charging as high as 782 percent interest.

Giving a customer money up front as well as coupons to buy items from a catalog — and circumventing a law capping no fax payday loans — is nothing more than a way of getting around the law. Gill spent almost three weeks in jail in Georgia back in April 2004 for failing to produce business records for Georgia Catalog Sales as requested — but a last-minute deal allowed the lender to go free.

Patrick Crosby, of the U.S. Attorney for the Northern District of Georgia, said Gill had a contempt of court conviction on his record from April 27, 2004. Crosby wouldn't say if Gill had pending charges from his office.

Louisiana filed cease and desist orders against Gill in 1992 for excessive financial charges, while Colorado found him in violation in 1993, and in that same year, an Alabama grand jury said he violated the state's small personal loans act. In Washington, Gill was ordered to pay a $23,600 fine.

This entry was posted on Monday, July 24th, 2006 at 9:34 am and is filed under Florida.