Consumer Financial Protection Bureau v. Moseley, et al., 14-00789-CV-W-DW, U.S. District Court, Western District of Missouri

May 2020

This case and receivership are concluded and the Receiver has transferred the receivership funds to the Consumer Financial Protection Bureau (“CFPB”).  It is anticipated that the CFPB will operate a consumer redress program for the benefit of defrauded consumers.

Factual background.  Defendants, twenty entities and three individuals, were engaged in an unlawful payday loan scheme with gross loan volume in excess of $227 million.  The scheme included the tactic of loan “cramming” by which Defendants obtained unauthorized access to consumers’ bank accounts and made unauthorized deposits into those accounts and thereafter sought collection on them as payday loans with high fees and interest.  The CFPB filed suit against Defendants in September of 2014 and a Stipulated Preliminary Injunction was entered on October 3, 2014.

The Receiver was tasked with winding down the business locations, assembling the Receivership Defendants’ assets, and pursuing claims against third parties.  In 2016, the Receiver filed a lawsuit against Katten Muchin Rosenman, LLP (“Katten”) alleging attorney malpractice and breach of fiduciary duty against Katten for negligent advice.  Also in 2016, the United States Attorney’s Office for the Southern District of New York (S.D.N.Y.) brought a criminal action against one of the individual defendants, Richard F. Moseley, Sr.  The institution of the criminal proceedings resulted in the stay of the receivership case.

Upon Mr. Moseley’s conviction in June of 2018, the S.D.N.Y. pursued forfeiture of the assets in the receivership bank accounts and the Receiver was ordered to transfer $9.9 million in receivership bank accounts to the U.S. Marshals. After the conclusion of the criminal case, the stay of the receivership case was lifted.  Ultimately, the Receiver reached a confidential settlement with Katten and, in a separate matter, the Receiver obtained another confidential settlement before the matter reached the litigation stage.  In the end, the Receiver was able to turn over an additional $3.6 million to the CFPB.

With his duties completed, on May 12, 2020, the Receiver filed his Final Report and Application for Discharge with the Court, which the Court approved and discharged the Receiver.