Extortionate Credit Transactions

Federal Defense Lawyer Explains Crimes Involving Extortionate Credit Transactions

There are laws in place in the United States that restrict the types of loans that can be provided and the terms of credit transactions.

When those laws are violated and a credit transaction is considered to be an extortionate transaction, this can result in criminal charges on the federal level or on the state level.

If you are facing federal criminal charges connected with extortionate credit transactions, it is important that you understand what your legal rights are and that you are represented by a federal criminal defense attorney with the knowledge and experience to help you fight serious accusations. LV Criminal Defense can help.

Our compassionate and knowledgeable legal team has provided representation to clients in Arizona, California, Utah, Oregon, and Nevada who are charged with federal crimes involving extortionate credit transactions. We know the ins-and-outs of what prosecutors need to prove to secure a conviction for these offenses and we will work with you to develop an effective defense strategy or an appropriate response to charges.

Our goal is always to help you minimize the potential consequences you could face or to avoid conviction, and we work hard to ensure that you get the best possible outcomes when you’re facing federal charges that could change your life. To find out about the ways in which our firm can help you to fight charges, give us a call today.

Federal Laws On Extortionate Credit Transactions

Federal laws defining criminal conduct related to extortionate credit transactions are found in Chapter 42 of Title 18 of the U.S. Code. There are six statutes within Chapter 42, one of which has been repealed. The remaining statutes that are still in effect do things such as setting forth the definitions applicable to the other laws within Chapter 42, and establishing penalties for extortionate behavior in connection with credit. The statutes include:

• 18 U.S. Code section 891: Definitions and rules of construction
• 18 U.S. Code section 892: Making extortionate extensions of credit
• 18 U.S. Code section 893: Financing extortionate extensions of credit
• 18 U.S. Code section 894: Collection of extensions of credit by extortionate means
• 18 U.S. Code section 896: Effect on State laws

Different statutes within Chapter 42 establish the definitions of different types of crimes related to extortionate credit transactions. For example, 18 U.S. Code section 892 defines the specific penalties and consequences associated with extortionate credit transactions and establishes the definition of an extortionate credit transaction.

According to 18 U.S. Code section 892, an extension of credit is presumed to be an extortionate credit transaction if the repayment of the extension of the credit or the promise given in exchange for the extension of credit would be illegal in the jurisdiction where the debtor lives or is incorporated.

A credit transaction is also considered to be extortionate if the interest on the credit would be in excess of an annual rate of 45 per centum, calculated in accordance with the actuarial method of allocating payments made on a debt.

If a debtor reasonably believed at the time that the credit was extended that the creditor had collected, or attempted to collect, past debts by extortionate means or if the creditor had a reputation for collecting debt payments through extortionate means, then this would also be a situation where the extension of credit could be presumed to be extortionate.

If any of these circumstances exist and an extension of credit is considered to be an extortionate extension of credit, a defendant could be convicted under 18 U.S. Code section 892 and could face penalties that could include a maximum of 20 years imprisonment as well as a fine. In order for a defendant to be convicted and to face these potential penalties, the prosecutor would need to prove beyond a reasonable doubt that the defendant had made an extortionate extension of credit as defined by the relevant statute.

18 U.S. Code section 892 also makes clear that if evidence is introduced that tends to show the circumstances described within the statute and there is no direct evidence of what the debtor believed regarding the extension of credit or the collection practices of the creditor, the court has discretion to allow evidence to be introduced that shows the reputation of the creditor within the community that the debtor was a member of at the time that the credit was extended.

Because there are circumstances where it can be presumed that an extortionate credit transaction took place, and because this type of evidence of a creditor’s reputation within the debtor’s community can be introduced, it can be easier for prosecutors to show that a defendant did in fact extend credit in an extortionate credit transaction.

It is important for defendants to understand these rules of evidence and to be prepared with a viable defense strategy aimed at rebutting the presumption that a particular credit transaction was an extortionate one.

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