Essays

Jews and Moneylending: A Contemporary Case File, Part 2 of 3

al_goldsteinby Andrew Joyce

ONE OF THE standout stars of the online moneylending business is Al Goldstein, a Jew from Uzbekistan who arrived in America with his family in 1988. Goldstein is the co-founder and CEO of AvantCredit.com, one of America’s fastest growing online providers of consumer loans. After securing more than $1 billion in funding, AvantCredit was the most funded company in Chicago in 2014. The company has issued more than 100,000 loans operating in 46 U.S. states and in the United Kingdom where it has operated under the brand SpringCoin.co.uk. But these aren’t the only strands in Goldstein’s web. A major trait of these Jewish moneylending mega-operations is that they start off with a single company and then spawn innumerable new branches and brand names over time. In such ways, the ownership and liabilities for these companies quickly becomes obscured. For example, Goldstein was also co-founder, President and CEO of CashNetUSA, which then changed its name to Enova International, from 2004 until 2008. Enova trades under several more company names in Canada (Dollars Direct), Australia (Dollars Direct Australia), and Great Britain, where it operates as QuickQuid, Pounds to Pocket and also On Stride Financial. As for where Goldstein might put some of his “rainless crop,” I note that Goldstein is an “active member” of the America Israel Public Affairs Committee (AIPAC). (ILLUSTRATION: Al Goldstein, founder of Enova International Inc. and CEO of AvantCredit.com)

Unlike most White Americans, who look on with horror at the declining fortunes of the American middle class, Goldstein sees opportunity in it. In 2009 he started Pangea Properties in order buy thousands of foreclosing properties. This Uzbek Jew now owns more than 10,000 homes previously in the hands of debt-saddled Americans. Enova has been recorded boasting that “demand in the consumer segment we serve has been influenced by several demographic and socioeconomic trends, including an overall increase in the population and stagnant to declining growth in the household income for this segment.” It touts a recent National Bureau of Economic Research survey in which nearly half of U.S. consumers said they couldn’t come up with $2,000 in emergency funds even if they had a month to do so. They predict more and more citizens will be turning to them for financial “assistance,” and Goldstein’s operation has been described as “ideal” by Dan and Bob Wolfberg, the co-founders of another Chicago-based loan firm, PLS Financial Services Inc. Another increasingly influential player in the American online moneylending game is LendUp, founded in 2011 in San Francisco by Sasha Orloff and Jacob Rosenberg.

Online lending hasn’t just been pioneered by Jews in relation to small loans. One of the major contributing factors in the economic crash was the advent in 2000 of easy online mortgage loans. One of the biggest companies in this area of moneylending is Quicken Loans. Quicken is owned by Daniel Gilbert, whom Wikipedia describes as “born to a Jewish family in Detroit.” Quicken Loans was originally called Rock Financial Mortgage when it was founded in 1985 by Gilbert and his younger brother Gary, along with fellow co-ethnics Ron Berman and Lindsay Gross. Gilbert’s firm has done well out of the economic devastation that has befallen Detroit, and as of last year it remains America’s second biggest mortgage lender. Although Gilbert has been careful to try to maintain a clean image of his company, Quicken has attracted several federal lawsuits. In particular, CBS has reported that employees have come forward with information to the effect that the company was heavily involved in the kind of reckless, illegal lending that typified lending behavior in the run-up to the housing crash. Employees interviewed by federal authorities have accused the company of using high-pressure salesmanship to target elderly and vulnerable homeowners, as well as misleading borrowers about their loans, and falsifying property appraisals and other information to push through bad deals.… A group of ex-employees, meanwhile, have gone to federal court to accuse Quicken of abusing workers and customers alike. In court papers, former salespeople claim Quicken executives managed by bullying and intimidation, pressuring them to falsify borrowers’ incomes on loan applications and to push overpriced deals on desperate or unwary homeowners.

A former loan salesman at Quicken has reported that senior figures in the company put employees under pressure to “lock the customer into a higher interest rate, even if they qualified for a lower rate, and roll hidden fees into the loan.” In 2010 a West Virginia court found Quicken guilty of fraud for misleading a mortgage borrower, gouging her on fees and wrongly inflating the value of her home. The judge overseeing the case described the company’s conduct in the case as “unconscionable.” Quicken appealed the decision, only to be hit with $3.5 million in punitive damages for continuing to avoid dealing fairly with the customer. Like Al Goldstein, Gilbert is generous when it comes to his fellow Jews. When not engaged in immoral lending practices, Gilbert is keenly involved in the US Friends of the Israeli Defense Force and sits on the Israeli and Overseas Committee of the Jewish Federation of Metropolitan Detroit.

But Quicken wasn’t even the worst of the sub-prime mortgage lenders. The consensus is that one of the most predatory was Ameriquest, founded in 1979 in California by Roland Arnall. Wikipedia states that Arnall was born in Paris, France in 1939 to “Eastern European Jews.” Ameriquest wasn’t the first thing founded by Arnall. Like Goldstein and Gilbert, Arnall was a pillar of the Jewish community. Two years before founding Ameriquest, Arnall, a “long-time supporter of Israel,” helped found the Simon Wiesenthal Center and the Museum of Tolerance in Los Angeles. Arnall wasn’t so charitable or honest when it came to non-Jews using his company to buy a home. Arnall’s Wikipedia entry states that by the end of 2005 two of Arnall’s companies, Ameriquest and Argent, had funded almost $75 billion in bad subprime loans. A major factor in the development and growth of his companies was yet another Jewish credit “innovation”: Arnall is widely acknowledged as having originated the “stated income loan,” often called “liar loans,” because they were loans given without verification of income.

These loans were then bundled by major Wall St. financial firms, certified as investment-grade securities by companies like Standard and Poor’s, and then sold to investors who lost billions, resulting in the worst financial crisis since the Great Depression. Recently Standard and Poor’s agreed to a fine of $1.37 billion because they were paid by companies whose securities they were rating. This means that the total paid out by American financial institutions for malfeasance leading up to the financial crisis is $40 billion — widely considered a slap on the wrist given the profits involved, the ongoing damage caused, and the fact that “not one top executive at S.&P., or any major Wall Street firm, was charged criminally for the misdeeds during the era.” Quite obviously, there can be no trust in our financial elites. As Matt Taibi noted (see here), “The real problem is that it doesn’t matter what regulations are in place if the people running the economy are rip-off artists. The system assumes a certain minimum level of ethical behavior and civic instinct over and above what is spelled out by the regulations. If those ethics are absent — well, this thing isn’t going to work, no matter what we do. ”

In Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis, Paul Muolo and Matthew Padilla state that at least thirty per cent of Arnall’s business was based on “stated-income or limited-documentation mortgages.”[1] A fellow financial predator was reported by the authors as stating: “[Arnall] plays by his own rules. He’s the guy who started stated-income loans, the guy who started no-documentation loans.”[2] By 2005 Ameriquest stood accused of misrepresenting and failing to disclose loan terms, charging excessive loan origination fees and inflating appraisals to qualify borrowers for loans. Despite costing the United States billions of dollars, playing an instrumental part in bringing the nation to its knees, and throwing untold numbers of hard-working American families into pits of despair, in early 2006 the company was permitted to pay just $325 million in a settlement with state attorneys general and law enforcement agencies and financial regulators in 49 states and the District of Columbia. This criminal, who brought so much damage to America, was then inexplicably made a US Ambassador to the Netherlands from 2006 until his death in 2008.

Or, perhaps, it’s more explicable than we might think given that Arnall was one of the biggest donors for pro-Israel neoconservative Republicans, and an especially lavish contributor to George W. Bush and California governor Arnold Schwarzenegger. As an example of the distance between the elite and the people, when challenged on Arnall’s funding, Schwarzenegger explained that the sources of Ameriquest’s ill-gotten gains “are not our area of concern” — which would best be translated as “ordinary Americans are not our area of concern.”

Roland Arnall, CEO of Ameriquest and one of the most instrumental figures in the economic crash
Roland Arnall, CEO of Ameriquest and one of the most instrumental figures in the economic crash

Like his fellow Jewish financial predators, Arnall spared no expense when it came to supporting Jewish interests with his “rainless crop ”(see also “The Sandlers and the Arnalls: The sub-prime meltdown funds Jewish political activism.”) According to Judaic Studies teacher Rabbi Aaron Parry, he gave tens of millions of dollars to charity every year, including to “every single Jewish educational organization in [Los Angeles], regardless of denomination.” Arnall was also instrumental in buying land and homes from Arabs near the Western Wall in Jerusalem, in order to sell them cheaply to Jews who wanted to live there. Ultimately it was a simple formula — take homes from Americans in the U.S., give them to Jews in Israel.

Returning to the thriving industry of small-scale, high-interest, online moneylending, the title of kingpin probably goes to multi-millionaire Jeffrey Weiss. Weiss, 71, is the chief executive of Dollar Financial or DFC Global Corp, a US-based payday lender which is expanding rapidly in Canada (where it operates under the name of Money Mart) and Britain, where it assumes several trading names. Britain has attracted these international Jewish lenders because for a long time the country, unlike increasing numbers of American states, had no limits on what interest rates could be charged. Looking at some articles from the UK, it’s clear that Dollar Financial owns The Money Shop, with 370 stores across the nation. It charges 1,311% annual interest on 30-day loans and made £33 million ($51 million) profits last year, up 21% from the previous year. Dollar Financial also owns online lenders Payday UK and Payday Express, which charges 1297% APR interest on loans of up to £800 ($1200). Profits at Payday Express more than tripled last year to £4.9 million ($7.5 million).

Jeffrey Weiss, CEO of Dollar Financial
Jeffrey Weiss, CEO of Dollar Financial

Because more and more US states were taking action on the interest rates charged by the companies operated by Dollar Financial, Weiss turned his attention overseas: “We have dramatically diversified out of the US where the regulatory environment … is at best unclear. We have diversified into geographies like Canada and the UK with relatively little competition where we can build a dominant market position.” Weiss calls his customers “Alice” — “asset-limited, income-constrained, employed.” “Because they are under skilled and undereducated, the opportunity for them to advance above that income bracket is very limited.” So he tempts them with easy but cripplingly expensive cash.

Cash comes easier to Weiss, however. On top of his basic salary of $1 million annually, Dollar Financial also pays Weiss’s $34,000 country club membership last year and his $17,000 tax and legal bill. He also doesn’t need to worry about his company’s interest rates. In 2005, Dollar forgave Weiss $2.3 million in interest on a loan he had from the company, believed to be for more than $15 million. This comes on top of other benefits far too numerous to cite here, but available for the viewing of the curious.

America may be a net importer of goods and services, but the payday lending industry dominated is becoming one of the nation’s fastest growing exports. Payday lending, pioneered by Jewish financiers, has spread like a weed into most of the Western economies in the developed world. Weiss and DFC lead the way with subsidiaries in the U.S., the U.K., the Czech Republic, Spain, Poland, Scandinavia, and Canada. Not to be outdone, their rival EZCorp has stores in almost thirty countries. By far the most influential shareholder on the EZCorp board is Phillip Cohen. According to Wikipedia Cohen is an Australian private equity investor with a background at Kuhn Loeb and Oppenheimer & Co. After taking advice from fellow co-ethnics, and notorious fraudsters, Michael Milken and Ivan Boesky, Cohen founded Morgan Schiff & Co. Cohen then became majority and then exclusive shareholder of voting stock for EZCorp.

Among its American assets, Cohen’s EZCorp has a portfolio which includes EZ Pawn, Pawn Plus, Value Pawn and Jewelry, Premier Pawn and Jewelry, USA Pawn and Jewelry Company, Easy Cash Solutions, Jerry’s Pawn Shop, and CashMax Payday Loans. Internationally, it also owns Cash Amigo in Mexico, as well as the Cash Converters International Brand. EZ Corp has joined the U.K. feeding frenzy by offering the online payday lending “service” Cash Genie. As well as coming under criticism for charging annual interest rates of 2,986% on its loans, Cash Genie has been forced to repay money to its customers after the Financial Conduct Authority found that the company applied unauthorized charges to customer accounts and permitted customers to become indebted far beyond their means.

But the problems faced by Cohen’s U.K. customers are merely the tip of the iceberg. Newspaper reports suggest three-and-a-half million British adults are considering taking out an extortionate payday loan over the next six months as almost half the population struggle in the aftermath of a crisis instigated by the likes of Arnall and Gilbert. The number of people who run out of cash before the month is up has increased by seven percentage points since this time last year. Payday loan companies are now worth more than $3 billion a year, with some lenders charging interest rates of more than 4,000%, leaving borrowers drowning in debt.

As well as the intrusions of American Jews into the British loan market, the country also has a number of “home-grown” online moneylenders. They all have friendly names such as Wonga, Mr Lender, and Uncle Buck. Mr Lender styles himself “Your Friend Until Payday.” But who is Mr Lender? The founder and owner of the company is Adam Freeman, a member of the South West Essex and Settlement Reform Synagogue who was also selected for the U.K.’s version of The Apprentice. Even with new laws and restrictions, Mr Lender still charges 1,269.6% APR on his loans, so I’m pretty sure that come payday he really won’t be your friend any longer.

By far the most notorious “domestic” online moneylender in Britain is Wonga. It was the astonishing 5,853% rate on Wonga’s annual loans that finally prompted the British government to begin closing the loopholes which permitted the moneylender’s feeding frenzy on the British people. Wonga, which still charges annual interest rates of 1,509%, was founded by two South African Jews, Errol Damelin and Jonty Hurwitz. According to his Wikipedia entry, Damelin “grew up in a Jewish family where he attended the University of Cape Town. Following his graduation in 1992 he immigrated to Israel. He began his career working as a corporate finance banker at an Israeli bank that later merged into Israel Discount Bank.” He founded Wonga in 2007, with the company soon attracting criticism for “fraud and the exploitation of the most vulnerable in society.” Among the company’s practices was the forging of legal letters in order to terrorize customers into paying ever higher fees. Because such practices are completely illegal the company was later subject to a criminal investigation.

Errol Damelin, co-founder of UK firm Wonga
Errol Damelin, co-founder of UK firm Wonga

Like a rat deserting a sinking ship, Damelin stepped down from his leadership at Wonga (retaining shares) just two weeks before the company was due to be hit with new regulations from the Financial Conduct Authority as well as a $4 million compensation demand. As of November 2014, however, Wonga had yet to pay thousands of customers.

Damelin isn’t as tardy when it comes to supporting Jewish interests. He is active in supporting Jewish charities such as World Jewish Relief and Jewish Care, but when challenged by the press over the way in which his company treats British customers, he disclosed “that he felt no moral personal issues relating to Wonga’s much criticised trading ethics.”

Those finding themselves in the grasp of the online moneylenders are often forced to turn to those in another burgeoning but related industry — businesses built on consumer debt relief and debt consolidation. For example, you might turn to the services of Consolidated Credit Counseling Services Inc., one of America’s largest credit-counseling firms. In 2013 it generated $31 million in revenue. It’s more than a little interesting, however, that Consolidated is owned and operated by David Dvorkin, who also has financial interests in the very same payday lending companies that get his customers into trouble in the first place, thereby benefiting from both sides of the financial trap. Apparently this is no big deal to Dvorkin, who counters press enquiries on the matter with sob stories about his father dying the week before his bar mitzvah. My heart bleeds.

Some of the money funding the expansion of Jewish payday loan companies might come from surprising sources. For example, Bloomberg reports that money from Harvard University has been implicated in a number of suspect ventures (“Secret Network Connects Harvard Money to Payday Loans”). In 2007, Vector Capital, a fund operated by San Francisco Jewish financier Alex Slusky was tasked by Harvard and other investors with raising $1.2 billion to buy and turn around struggling software companies. Slusky instead worked with co-ethnics, and fellow Venture comrades, Robert and Daniel Ziff to build “a network of payday-lending websites, using corporations set up in Belize and the Virgin Islands that obscured their involvement and circumvented U.S. usury laws.” Employees connected to the scam claim that Slusky was behind “CashYes.com, CashJar.com and at least four other payday-loan websites.” Although Slusky refused to respond to e-mailed media enquiries, and actually hung up when called for comment, I note that the companies quickly disappeared after Bloomberg’s exposé.

As well as luring in the vulnerable with online mortgages and small loans, Jews have also been reaping the “rainless crop” via online gambling. One of the pioneers and biggest players in the online poker industry was Isai Scheinberg, an “Israeli-Canadian” former programmer for IBM. Scheinberg is the co-founder and former co-owner (with his son Mark Scheinberg) of PokerStars “the largest online poker cardroom in the world.” In United States v. Isai Scheinberg et al., federal authorities accused Scheinberg, along with associates and co-ethnics Howard Lederer and Rafael Furst, of extensive fraud and money laundering. The case concerned the fate of approximately $3 billion in assets; authorities sought prison terms for all the executives concerned, apart from Mark Scheinberg. One of the named executives, Ira Rubin, attempted to flee to Guatamala, but was arrested there on Monday, April 25, 2011. Rubin was subsequently sentenced to three years in prison, with the judge remarking: “You are an unreformed con man and fraudster.” Isai Scheinberg is still under indictment in the U.S., but has relocated himself and PokerStars to the Isle of Man, a self-governing British Crown dependency in the Irish Sea. He recently became a billionaire after selling the company to the Canada-based Amaya group. But some things never change, and the Chairman and CEO of gambling conglomerate Amaya is another co-ethnic, David Baazov. Baazov has been described by Jewish Business Week as the new “king of online gambling.”

Online gambling, like online moneylending, is currently one of the world’s largest growth markets. And given what we have discussed above, it is perhaps not all that surprising that Israel is emerging as a global center for online gambling companies. In fact, some commentators have credited Israel with “essentially creating the online gambling industry back in the 1990s.” Although Israelis are banned from targeting their own people with these websites, this has not prevented them from “catering” to gamblers abroad. Some of the biggest names in the online gambling industry are Israeli, such as Playtech, the world’s largest online gaming software supplier. Other well-known online gambling companies that maintain a sizeable presence in the Jewish State include 888, Bwin, Party Digital Entertainment, William Hill Online, Ladbrokes Digital, and Caesars Interactive Entertainment.

As online moneylending and gambling takes off, adding to the financial woes of consumers, more and more Americans, Europeans, Canadians and Australians will fall into the hands of the Jewish CEOs and companies I have listed. These citizens will descend into an inescapable spiral of debt. Across America, household debt is increasing at an alarming rate. It now approaches $12 trillion. Both Canada and Australia have household debt figures that are higher even than those in the United States. In the UK, household debt is predicted to grow three times faster than salaries over the next four years.

The flies are struggling in the web, but become only ever more fastened to it. I therefore contend that the Jewish CEOs and companies listed above, along with their “innovations,” fraudulent procedures, and practice of dual ethics represents a clear and present danger to the wealth, interests, and well-being of our societies.

* * *

[1] P. Muolo and M. Padilla, Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis  (Wiley, 2010), 87.

[2] Ibid.

Read the full series at the Occidental Observer

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