A Cresskill, N.J., lender scammed 9/11 first responders suffering from cancer — as well as football players with brain injuries — out of millions of dollars by luring them into illegal loans with interest rates of as much as 250 percent, according to a lawsuit brought Tuesday by the NY Attorney General and the Consumer Financial Protection Bureau.
RD Legal Funding, which promises cash advances to people waiting for payouts from victim compensation funds or legal settlements, targeted 9/11 first responders and NFL concussion victims with expensive loans and confusing terms, according to the lawsuit filed in Manhattan federal court.
RD Legal looked for people who had been awarded money, and then “swooped in” to offer them an upfront payment that they could pay back after they had received their money, the lawsuit said.
When the time came to repay the loan, consumers often found themselves paying “more than twice what RD Legal had advanced only months earlier,” the CFTC and NY AG said in a press release.
For example, RD Legal targeted an unnamed woman who was awarded $65,000 from the Zadroga Fund, a 9/11 compensation fund established by Congress for first responders suffering from medical ailments, the lawsuit said.
RD advanced her $18,000. And when her Zadroga award arrived six months later, RD Legal demanded an extra $15,000, the lawsuit said.
“The alleged actions by RD Legal—scamming 9/11 heroes and former NFL players struggling with severe injuries—are simply shameful,” NY Attorney General Eric Schneiderman said in a statement.
In New York it is criminal to charge interest rates above 25 percent.
The lawsuit also named RD Legal’s founder, New Jersey lawyer Roni Dersovitz, as a defendant. Dersovitz was sued by the Securities and Exchange Commission last year and accused of lying to investors of his funding arm, RD Legal Capital.
Tuesday’s lawsuit seeks to stop the company’s allegedly illegal lending practices and obtain relief for the victims.
Dersovitz did not return a request for comment.
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