Judge: Main Line’s payday lending ‘godfather’ not too sick for prison

Payday-lending pioneer Charles M. Hallinan must report to prison next week, a federal judge ruled Wednesday, days after defense lawyers argued that putting the ailing 77-year-old from the Main Line behind bars would be akin to signing his death warrant.

Hallinan had sought to stave off his 14-year sentence – the result of his November conviction on racketeering charges –arguing that the federal prison system could not provide adequate treatment for his recent diagnosis of two aggressive forms of cancer.

But in an opinion filed in Philadelphia, U.S. District Judge Eduardo Robreno characterized Hallinan as unrepentant and uncooperative, and said that his refusal to fully disclose his assets presents a risk that he could flee at any moment.

"Each day Hallinan is allowed to remain on bail increases his risk of flight," the judge wrote.

Michael Rosensaft, a New York lawyer representing Hallinan, vowed an emergency appeal.

"His treatment will be interrupted, and his life will be in danger," the attorney said in an email. "It would be inhumane to disrupt his chemotherapy."

If the U.S. Court of Appeals for the Third Circuit does not issue a stay or reverse Robreno's ruling, Hallinan will have to surrender at the medical center at the federal prison in Butner, N.C.,  by 2 p.m. Monday.

That facility has become the focus of much of the argument since a jury convicted the former investment banker and Wharton graduate of a years-long scheme to prey on financially vulnerable Americans by offering low-dollar, high-interest loans over the internet in violation of state interest rate caps.

In a hearing Monday, his lawyers argued that despite assurances to the contrary from the U.S. Bureau of Prisons, Hallinan could expect to receive substandard treatment there compared with what his team of top-flight oncologists could provide.

Butner currently houses 300 inmates in various stages of cancer treatment in a facility designed to handle their medical care, a Bureau of Prisons representative testified at Hallinan's sentencing hearing this month.

"Although Hallinan is suffering from a serious medical condition, he is ambulatory and there is no immediate medical emergency," Robreno wrote in Wednesday's ruling. "[There] is no reason to believe that he would not be able to afford and receive medical care in another country, particularly one that does not have an extradition treaty with the United States."

Hallinan, of Villanova, is credited with developing many of the business tactics that turned the payday lending industry into a multibillion-dollar financial juggernaut and earning a status that led a government witness at his trial to dub him "the godfather of payday lending."

Between 2007 and 2013 alone, his Bala Cynwyd companies raked in more than $490 million by imposing stiff fees and annual interest rates approaching 800 percent on desperate borrowers with limited access to more traditional lines of credit.

In addition to his prison term, Hallinan has been ordered to pay more than $66.5 million in financial penalties, including forfeiture of several million dollars in assets.