How an FTC bust in Chicago last week relates to KC’s payday-loan circles

On March 21, the Federal Trade Commission and the Illinois Attorney General’s Office filed, under seal, a lawsuit seeking to shut down a debt-collection operation located in the Chicago suburb of Westmont. A federal judge in the Northern District of Illinois signed off, and law enforcement subsequently raided the offices of the operation, which included several interrelated companies with names such as Stark Law and Ashton Asset Management.

The assets of these businesses, as well as those of their owners — Hirsh Mohindra, Guarav Mohindra and Preetesh Patel — have been frozen, and a receiver has been appointed to determine the extent of the fraud that was occurring within these businesses, and to seek restitution for consumers. Among other things, the feds say, these entities “threatened and intimidated consumers to collect phantom payday loan ‘debts’ they did not owe.”

You may recall that phantom payday-loan debts were also the reason that the FTC raided the Mission, Kansas, offices of CWB Services in 2014.

In addition to the usual deceptive lending practices common to the online payday-loans industry — documented most recently in the billion-dollar case against Scott Tucker — CWB Services authorized loans to the bank accounts of people who had never requested the loan, and then charged interest on those fake debts. Tim Coppinger, the owner of CWB Services, perpetrated this fraud on American consumers with the assistance of a lead-generation and software company called eData Solutions, which was controlled by Joel Tucker.

Last month, the receiver in the CWB Services case announced that he would attempt to claw back from Joel Tucker some $30 million in fees that CWB Services paid to eData Solutions. He’s seeking additional millions from other investors involved in the scheme.

Documents and correspondence recently obtained by The Pitch show that Ashton Asset Management — one of the entities that the feds busted in Chicago last week — purchased its debt portfolio from an entity called GrayWave Capital.

GrayWave Capital is, in short, a Joel Tucker company. In e-mails reviewed by The Pitch, Tucker’s signature line indicates that he works for GrayWave Capital. The company has also used Tucker’s home in Boulder, Colorado, as a business address. 

In an e-mail obtained by The Pitch, Guarav Mohindra acknowledges that Ashton Asset Management bought a debt portfolio — a big file containing the personal information of thousands of people who at one point applied for one or more online payday loans — from GrayWave. In a separate e-mail, Vinny Khosla, a lawyer for the operation, states: “Ashton Asset Management purchased its debt portfolio from GrayWave Capital Management LLC.” Attempts to reach Mohindra and Khosla were unsuccessful.

Buying a debt portfolio and attempting to collect on the loans it contains is perfectly legal — if the loans are legitimate. The feds say these weren’t, which is why Ashton Asset Management got busted. But if GrayWave sold Ashton Asset Management fake debt — a possibility, given that Tucker would have had access to loads of consumer information based on eData Solutions’ role as a lead generator — then that would presumably drag Tucker into yet another FTC lawsuit. 

It would also beg the question of whether there are other companies out there that are financially violating consumers based on false information received from entities associated with Joel Tucker. Stay tuned for that.