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Big Picture Loans “Rent-a-Tribe” Payday Lender Usury and RICO Class Action

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This is yet another class action taking on a “rent-a-tribe” payday loan scheme. Big Picture Loans, LLC was not actually a tribal company, the complaint for this class action alleges, but a scheme designed to get around licensing requirements and laws that prohibit lenders from charging too much interest. (Note that this case was transferred from another jurisdiction and so has two different case numbers on documents.)

There are a number of classes and subclasses. 

  • The Declaratory Judgment Class is all persons who received a loan from Red Rock or Big Picture Loans, while located in Virginia, where the loan included an interest rate greater than 12%. The Declaratory Judgment Subclass includes those whose loan agreements included a choice-of-law or forum selection clause similar to the ones in this complaint.
  • The Virginia RICO Class is all Virginia residents who executed a loan with Red Rock or Big Picture where the loan originated and/or any payment was made on or after June 22, 2013. 
  • The Virginia Usury Class is all Virginia residents who executed a loan with Red Rock or Big Picture where any amount of principal, interest, fees, or other charges were repaid. The Virginia Usury Subclass includes all Virginia residents who executed a loan with Red Rock or Big Picture where any interest was paid on or after June 23, 2015. 
  • The Virginia Unjust Enrichment Class is the same as the Virginia Usury Class. 

The scheme began, the complaint claims, when Matt Martorello, approached the Lac Vieux Desert Band of Lake Superior Chippewa Indians with a “rent-a-tribe” scheme. According to the complaint, the tribe formed an entity, Big Picture Loans (originally Red Rock Tribal Lending, LLC) that offered short-term loans from a website. In reality, the complaint says, Martorello’s company, Bellicose Capital, LLC, funded the loans, controlled the underwriting, and handled collections and other day-to-day operations. 

In return for the use of its name, the tribe received 2% of the revenue, but the complaint alleges that the tribe had no control over the income, operations, or expenses of the enterprise.

Eventually, due to lawsuits and “anticipated regulation” from the Consumer Financial Protection Bureau, Martorello transferred Bellicose Capital to the tribe, with the new name Ascension Technologies, but the complaint claims the company continues to operate with minimal involvement of or benefit to the tribe.  

Martorello, Big Picture Loans, and Ascension are all named as defendants in this case, as is the general counsel for the former Bellicose Capital, and four members of the tribe (its tribal chairman, tribal chairwoman, secretary, and treasurer).  

The state of Virginia prohibits lenders from charging more than 12% interest on loans. However,

Big Picture made loans to residents of Virginia significantly more interest. It charged the four plaintiffs in this case APRs of between 607.5% and 693.2%, the complaint claims. Under Virginia’s usury law, the complaint says, these loans are null and void because of their unlawful interest rates. 

The complaint also claims violations under the Racketeer Influenced and Corrupt Organizations (RICO) Act.

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