minnesota v cashcall complaint

8/13/2019 Minnesota v CashCall Complaint

1/27

TATE OF MEOTA

COUTY OF HNEPI

e o Minneo, y i Aoey Genelo wnon n i Commiioneo Commece Mice Romn,

Plini,

CCll nc. Cliicooion W undin LLC, Delwe limied iiliy comny,doin une in i own nme nd/o diiion o idiy oCCll nd W Finncil LLC,doin uine in own nme nd/o n incooe o unincooeddiiion o uidiy o CCll,

Dendn

DITRICT COURT

FOURTH JUDICIAL DITRICT

Ce Tye Oe CiilConume Poecion)

Cot File No COMPLAINT

Te e o Mineo, y i Aoey Genel Loi wnon, nd i Commiione o

Commee Micel omn i Comin in Deendn ChCl Inc W

Fundin, LC d W Finnci LC coleciey Dendn) llee low

NRODUCTION

1. Dendn e lied comnie t d uche eice nd collec o

lon o Mnne conume ccue inee te in exce o oe llowed unde

Mineo lw Dendn eek o ede e licenue uuy nd cone oecion lw

y uin n uh comny Wee y Fincil LC (Wee y) whic

lely old iel ou il eniy t uo o e exem om e conume oecion


2/27

aws under te dctrne of tibal sovereg imunity In eality Weste Sky is not owned or

operated y a tie o r te beet of a trie, ad te doctine of trial soveregn immnty

does not pply to the oans made to Minesota borrowers Dendants' se of Western Sky as a

ont s designed to mislead boowes ad regulators abot the loans and is an illegitimate

atempt to circumvent sate law Dendats nd and operate virually every aspect of Weste

Skys operations including conducting adverising in Weste Skys name nding the

underlying loas hat Weste Sky supposedly originates dng Weste Skys business

opeaons condcting communcations with borrowers undewriting the lons and perrming

numerous other coe nctions. Aer Weste Sky supposedly originates he loans it

immediately assigns em to Dendats which ten collect all the payets o the loans

carge nterest on the loans at ates r in excess of those allowed unde Minesta law and

indemnfy Weste Sky r all costs and peaties assocated with ay regulatory action ten

against te lendig scheme

2 Since 2010 at least nine other states d e Federal Tade ommssion have

taken acton against Dendants or Weste Sky r unlawlly makng loans wihout proper

state icensure and in vioation of state usy laws r misrepresentations and/or r llegal debt

collection pracices he State of Minnesota b its Attoey General ori Swanson ad its

ommissioner o ommerce, Michael Rothman brngs ths acton seekng o end Dendants

llegal practices and obtain restituton r Miesota consumers

PARTIES

3 i Swanso te Atoey Geneal o te State of Minesota s autorized

under Min Stat 801 83 832 and 4760 subd 7 and as common law authoity,

2


3/27

cug parn para auhoriy o brg hs aco o behal o he Sae o Miesoa a

s czes o erce Mesoa law

4 Mchael oha he Cossoer o Coerce o he Sae o Mesoa, s

auhorze uer M Sa 45027 sub 5 o ae ercee acos src cour

relae o hs ues a esposbles as Coissioer

CashCal, Ic "CashCall is a Calra cooao ocae a 600 S

Doglass Roa Aahe, Caia 9806 a was re i he yea 000 I soees

operaes hough subsries usig he aes WS Fig LLC a/or WS Facal LLC I

s o lcese o ae cosuer loas o Mesoa borrowers

6. WS Fug LLC (WS Fug is a Delaware lie liabiliy copay a a

whollyowe subsary o CashCall. WS Fug was coorae Delaware o March 5

200 The Pesie o WS Fig is also he Prese a ower o CashCall WS Fuig

s o lcese o le o Mesoa borowers or s regsee wh he Mesoa Secreay

o Sae. Ths lawsu s le agais WS Fug s ow capaciy a i is capacy as a

so, subsiry or assue ae o CashCall

7 CshCal aso soees oes busess uer he ae WS Facal LLC WS

Fiacal) The ower a pese o CashCal sgs coracs as Presie o WS Facal.

WS Facal LLC s o egsere wh h Mesoa Seceary o Sae o couc busess i

Mesoa a s o egsere wh e Miesoa Depae o Coerce as a leer o ay

ype his lawsi s le agas WS Facal LLC s ow capac a s capaci as

a icorporae or uicorpoae iso subsiia or assue ae o Cash Call

3


4/27

JURDICTON

8 Ts Cour has jursdcton over the subject atter of ths acto pursut to Mnn

Stat 8.0 81 8.32 subd. 2(a) and 47.601 subd. 5 n addto the Cossoner of

Coerce s authorzed to brng sut to enrce laws related to hs dutes nd responsbltes

under Mnn Stat 45.027 subd 5

9 s Cout has personal jursdcton over endats pursuant to Mnn Stat

9 because edants conducted busness n Mnnesota d cotted acts Mnnesota

causng njury to Mnesota consuers

VNU

10. Vnue n Henepn Couty s proper under Mnn Stat 54209 because he

cause o acto aose part, ennepn Couty

BACKGROUND

CashCal' "Rent-ABak chem.

11 Bre endants devsed the lendng schee that s the subject of ts lawsut

one of the edantsCashCalngaged n a slar eort to evade state law tough a

devce nown as a "rentab or rent-a-chater schee hat schee wors le ths: n

geeral unless derally chartered copnes ust be lcensed as soe type of lendr by a state

to ae sall, unsecued loans to a states consuers her lendng s en goveed by the

state's usy and consuer protecto laws So unlcensed copanes have attepted to

nlawuly evade state laws by engagng n sha trasacons n wch they purport to alate

wth a atonal o statechatred ba to ae conser los clang deral preepton of

state usy ad other law hey do so even though the real prty n nterest behnd the

transacto s the unlcensed copany

4


5/27

12. n 2003 th Oc Cmprllr Crrncy "OCC) intiatd a sris

nrcmnt actins against natinal banks that wr ngagd in such schms S OCC

rss Rlas datd January 21 2003 NR 2003-03 (quting th Cmpllr th Currncy as

stating that rnt-a-ba schms ar a mattr gat cnc t us) n 2005 th dral

Dpsit Insuranc Crpratin llwd suit with rspct t statchartrd bans wing

banks abut th crdit pratinal lga d rputatn rsks that such schms psd and

thratnng nrcmnt actn against banks ngagd n such schms DIC inancial

Insttutins ts Guidins fr ayday Lndng IL 4-2005 bruary 2005 at 2 hs

cmbind banking rgulatr actins r crditd with hlping t curb "rntabank r "rnt-a

chr schms

13 CshCall hwvr cntinud t ngag in "rnt-a-bank nding lng r thr

lndrs casd ratins h Wst Vrginia Attrny Gnral ld suit against CashCal in

2008, allging that CashCall ntrd int an mprpr rlatinship with a Suth Dakta bank

(irst Bank and rust Milbank Suth Dkta) fr prpss vading Wst Virginias usury

and cnsumr ptctin laws. inia CahCa a Civil il N 08-C-1964,

Kanawha Cunty Crcut Cur Cmplaint at 37 h Wst Virgina Atty Gnral

algd that th lndng pgram btwn CashCal and th bank was ssntialy a sham

intndd t mak imprpr us dral prmptin in rdr t unlawlly vad Wst

Virginias lndr licnsing d usury laws inia CahCa! ina Ord n hs I

th rial th Stats Dbt Clctin Claims, at 2 4 lwing a trial n Stmbr I 0,

2012 th Wst Virgna ct und that "th pps th lnding prgram was t allw

CashCal t hid bhind th Bas chatr and its right t xprt intrst rats undr dral

banking aw as a mans fr CashCall t dlivr its lan prduct t stats lik Wst Virginia

5


6/27

with sur laws West Vginia CahCall Fnal Odr n Phas I th rial th Stats

Usur and Lndn Cams at 5 h rt und that CashCall was "th d ft lndr

suh lans (d. at 27) and njind it m makin lans in Wst Virinia witht a ins and

fm makin r lltin usurus lans impsd a vil pnalt $730000 awadd

judmnt $1004587 and dlard all lans mad b CashCall in Wst Virina null and

id

4 And th sam tim FDIC bruht nmnt atin aainst anthr

n th banks usd b CashCallFist Dlawr nain in suh a shm

with CashCall and thr nnbank lnds h FDIC issud a Nti Chas whih suht

an d quirin Fist Dlawar t as and dsist its lndin patins with

CashCal and t pa rstitutn and ivi pnatis varus vatins law In t Maer of

F Bank f Dlawae and CmpuCed Cr, FDIC0725b FDIC 57k Fda Dpsit

nsuran Crpratin n 10 2008

15 Fllwin th rulaty srutin suh shms CashCals "ntabank

ativitis am t an nd

CahCal Relatons hip wthWete S kand the RenaTrbe S cheme1 Anthr unlawul shm usd b unlinsd mpanis t mak usrius lans

t a stats nsmrs is ald th ntatrib shm In ths shm an unlinsd lnd

purprts t liat w an Indi ib in an imprpr attmpt t lam dral tribal srin

immunt m stat linsur and ndin laws his shm is smilar t th "rntabank

shm, bt instad imppl attmptin t apitaliz n prttins afrdd t natinal

baks und fdal aw t imprpl attmpts t apitali n th svin immunit add

t Indian tibs nd dal law n th pada lndin industy has drd ntatrib


7/27

lnding a impop n by 21 th Community inancial Svic Aociaton o

Amica which pnt th payday lnding induy condmnd th pactic o aliang

with tib o cicumvnt tat gulation and aouncd that i would xpl mmb who

ngagd in uch chm See P Rla Community inci Svic Aocation o

Amica, Stofont Payday Lnd Rjct Nativ Amican Pnhp b 1, 211)

17 On Dcmb 28 29about 13 month a h Wt Viginia Atony

Gnal ud CahCal ngaging in h nta-bank chm and about 18 month a th

DIC took aco again on o th ont bak ud by CahCalDndan WS incial

a CahCall ubidiay, ntd into an Agmn with Wt Sky inancial th

Aignmnt d Pucha o Pomioy Not h agmnt i ignd on bhal o WS

inancial by CahCall ow and pidnt

18 Advmnt Wtn Sky appr on tlviion and adio boadcat into

Minoa CahCall alo advti in t own n in ad that ach nto Minnota ofing

loan to boow a lon applict conact Cah Call dictly CahCall will poc th loan

application but h loan il wll b uppodly ndd by Wt Sky and thn od to

CahCal' ubiiai n th am way ha loan mad through W Sky wbit ar

old to CahCal ubda CahCal ou th loan though th Wt Sky ntiy to

gv th oan th l appaanc o bing potctd by tibal ovgn mmunity and to

pupody kirt tat uy and con potction law

19 Wtn Sky pupot to oiginat th loan to Minnota conum but thn

l th loan to WS unding o WS inncial on a daily bai Wt Sky wnt to WS

inancial tha boow will not hav mad any paymnt on th oan b thi prcha by

7


8/27

WS Finania WS Finanal o WS Funding hen aume all gh of Ween Sky o olle on

he loan

ha an ubidaie nd he oan ad bea al he ik of onpaye

on he loan. eendan fund he loan oiginaed by Wee Sky by mainaining a depoi

aoun in Wee Sky' name wih a balane equal o the ll value of wo day of loan made

o onume Fnd n hi aoun ae ued o nd he loan o boowe efendan

indemniy Ween Sky all o aing o euling om any and all ivil iminal o

adminiaive im o aion, nluding bu no limed o ne o aemen and/o

penale and aoey e

2 CahCall and i ubidiae alo un vually evey ohe ape of Wee

Sky opeaion Fo eample, in an Ageemen Sevie beteen WS Finanial and Wee

Sky dae eembe 8 9, efendan WS Finanial agee o ondu he ndewing

evew of loan appliaion o povide ibound and oubon ome evie pp inluding

ommuniaion th boowe by elephone email ad e meage ding he oiginaion and

eviing of he loan o povide webie hoing and ehnial uppo o povide a oll ee

elephone and imile nmbe and o evie the loan in all othe epe In addiion

Wee Sky gan o CahCall he igh o ue i awok deig tademak logan logo

and ohe adveing maeial o engage in adveiing online on eleviion on he adio and in

pin. uuan o a omioy Noe daed eembe 8 endan WS Finanial alo

povde he wokng apial ued by Wee Sky o un i opeaion

have eogned ha the e lende o de o ende behind a loan

anaion an evae ae aw by engaging n hee o of deepive elainhi In

deemining if a pay he e lene ot onide the ubane of he aaion S

8


9/27

Ubd v. SLM op 82 Supp 2d 9 96 (ND Cl 22; Stte of est Vn et

v CshC Inc et No 8C96 slip op t (Knwh County Cou Sept

22 In ll sncnt substntie especs Dendnts e the lende nd the e pty n

inteest to the lon tnsctions As it eltes to lons pupoedly mde by Weste Sky to

Minnesot consues Dendns: (I) supply the nds f the lons; 2 be the isk o loss on

the lons; 3 mke he undewitin decisons ie the decisons to lend o not to lend to

picul pplicn; deelop nd use ms nd bnds d plms; nd colect he st

moy o es nd nees on lons mon ote thns Accodny Dendnt e te de

cto ende o te lons mde to Minneso boowes

W t S s Not a rbal Eia I No S ubjctorbal S ovrg Immui23 Unde he doctine o tibl soeein immunity cein letme ctity

ctuly ced ut by Indn tbes on tibl eseions f the benef o tibe s exempt

om cen s eulons Wese Sky howee s not owned o opeted by n Indn

tbe is not tl entity nd does not exs f the beneft o tibe Insted Weste Sky s

lmted lblty compny ceted unde South Dot lw, nd its sole membe is n ndidul

nmed Mtin Webb Whle M. Webb holds imsel out s membe o the Cheenne Re

Soux be no ppol ws euied om the Cheyenne Re Soux be f Westen Sky to

become Sout Dot lmed liblity compny The pots mde by Weste Sky e

dsibued to M. Webb nd Wese Sky does not opete the benet o n ndn tibe

The doctne o tibl soeen mmuniy does not pply to the lons mde by Wete Sky to

Mnneso consumes.

9


10/27

Numrou Oth S ta Hav Rtd Dfn ant Unlawul S hm4 dat or W Sky hav b h ubjt of rmt ato

at a a a wl a y th dral govrm, rlao to hr dg hm.

2. Fr ampl olorado ud Wtr Sky o auary 7, 0, allgg hat

Wtr Sky' lo to olorada wr llgal volad olorado' uuy law, ad that

Wt Sky ulawlly mad oumr loa o olorada wthout h rqurd l

Cad v n S nana LLC a a No V638, vr outy rt

ourt, ompla h vr outy rt ourt uld vor o olorado o t ummary

judgm moto, holdg that Wbb, a a rolld mmbr o h Trb, ot dvdually

tld to mmuty or do h mmbrhp th rb ofr uh mmuty upo Wtr

Sky Cad v. n S nana LLC t a a No V638, vr outy

trt ourt prl , 03 Ordr at 8 I addo o gag olorado' moo r

mmary judgmt th udg rd W Sky a of tra ovrg mmuty d

ordrd W Sky o pay olorado' atoy urd ltgag th ovrg mmuy

u d a 4

6 O 4, 03 th Stat o Nw Hmphr ud a a ad t Ordr

agat WS Fudg ad ahall h Sa o Nw Hamphr ud that ahall ad/or WS

Fdg ar th d o ldr r th loa mad o Nw Hmphr utomr ad that th

ompa dptvly oald thr rlaohp h Ordr rqurd ahal ad WS

Fudg to dgorg ay a harg alrady olltd, to pay rtuto to Nw Hamphr

oumr ad to pay a o appromaty $9 mllo

27. O prl 4, 0 h ommowalh o Maaht ud a ad t

Ordr agat ahal WS Fudg ad Wt Sky whh ordrd thm to a ad d


11/27

o enin i the schee escibe boe he Oe the iecte CshCl n WS

Funin to cese n esist o collectin on lons e to Msschusetts consues n to

eu to consues ll inteest finnce ches n fes ey collecte

28 he Myl Coissione o Fncil Reultion issue Finl Opinion n

Finl Cese n Desist Oe te June 22, 2012 oein Weste Sky to cese n esist o

kin os in Myln o collectin on los ley e to en ll ounts

collecte o ryl consues, to py ciil penlty Cmmr v S

aal al Cse No CFR-FY20 -182 OA No DLRCFR76A-47146 Opinion n

Finl Oe te My 22, 203 In ejectin Weste Skys soeein iunity eense, e

Coissione hel tht it "is unispute tht tibl soeein iity oes not potect

iniiul tbl ebes (quotin Cah Ada ad Prfrd Cah La Sa 22 P 3

1099 111 (Col 2010))

29 West Viini lso ejecte the soeein iunity ense sset by ote

lenin entities wne by M Webb In so oin, he cout hel tht business conucte by n

entity onize une South Dkot lw owne by n iniiul the thn tibe, n

conucte oe the Inteet ws not potece by the octine o tribl soeein iuity Sa

f W a ayday a Rr Ct LLC Knwh County Cicuit Court West

Viini No 10MSC-372 Oc 28 201 Fn Oe Gntin Stte's Petition o Ence

Inestite Subpoen

30Oeons Diision o Fince n Corpote Secuities issue Fil Oe to

Cee n Desist inst Weste Sky in 2012 copellin Westen Sky to cese lenin in

Oeon cese collection o inteest in Oeon n to py $2,00 ciil penlty f ech on

ien to n Oen borowe

11


12/27

3 he ns Dement nnc & Pfssn Regutn ssed Cese

nd Desst Ode gnst Westen Sky ded Mch 8 3 hs Ode und ht Westen Sky

hd been dveng n n n mue teevsn netwks hd sent em cmmunctns

bwes n ns nd h scted ns t ns cnsumes m ts webste A

Weste Sky ws nt censed t e such ns n ns the Ode nstuced Wese Sky t

cese m endng t Ins bwes

32 Bh the Mssu Attney Genes Oce nd the Wshngtn Detmen

nnc nstuns hve endng encement ctns gnst Weste Sky nd he enttes

wned by M Webb hese ctns ege tht Weste Sky engged n usuus nd uncensed

endng n vtn tte w nd seek esttun nd entes gnst Weste Sky As

the Geg ttey Gene nnunced he hd eched n geement wth Weste Sky th t

wud n nge end t Gegns n 22

33. n ddtn, n Setembe 6 the ede de Cmmssn ed wsut

gn Weste Sky nd the enttes wned by M. Webb he Amended Cmnt eges

tht the enttes n cntcts cnn eg vsns cng wge gshment the

bwe deuted unwy cndtned the eenn cedt n bwe geeng t

"e-thed ns ut the bnk ccnts nd fsey sseted tht the Cheyenne

Rve Sx b Ct hd usdctn t ene judgmen gnst bwes wh deuted n

the ns he wsu s endng n the Unted Sttes Dsct Cu f the Dsc Su

Dk.

3 Ohe gveent eguts hve s bught ctn gnst CshC

enggng n deceve endng cnduc exme, n August 9 the C Atey

Gene ed wsut gnst CshC egng tht vted he cnsume tecn ws by


13/27

dvtiig itt t ht w ot vilbl to th gl pbli miptig h

mout dd to py o lo d uig ulwl m to ollt th lo. Ple f the

Se f Clr v CshCll Ic o Ag Supio Cout C No BC4). h

lwuit w olvd though Fil udgmt d Pmt Iuto, whih bd

ChCll om ggig i viou dbt oltio pti d odd it to py $ i

ivil plti.

Unwons M e to Minnesot Consumes.

Wt Sky d ChCll gg i dvig i Miot A t th o

Wt Sky wbtw

wtkyom Wt Sky o lo to Miot tht

g om $8 to $ d b ul ptg t of btw 89.68 d 3486

pt Nith Ddt o Wt Sky lid to of o g oum lo

i Miot. Ddt d Wt Sky hv gi umou lo to Miot

iludig om lo $ o l

36 Boow hgd $3 f $8 o d $ f $

lo whih i t o th top a Boow h quid to mk mothly pymt

o th o whih ubjt to hy t of itt h llowig h om Wt Sky

wbit t th th lo Wt Sky pupot to mk to Miot boow

Borrowe Numb of

Prodct ees Loan Fee APR mnts Pme Amoun$10000 ',25 $75 8968% 84 $743.49$5075 $5000 $75 16.73% 84 $48658

$2600 $2,25 $75 3922% $2949

$1500 $000 $500 2325% 24 $989

$850 $500 $350 34286% 2 $5072

37 Miot om tk out th lo whil phyilly lotd i Miot

uig omput o tlpho i Miot Miot oum do ot tvl to South

3


14/27

Dakoa o apply r h loan o sign h loan or o pick up h lon procds nsd Ws

Sky dposis loans dicly ino Minnsoans bank accouns in Minnsoa hough an

lconc ansr Dndans ouinly adris n Minsoa call Mnnsoans i Minnsoa

abou oiginaing and sricing h lons snd mal and x mssags o Minsoans in

Minsoa collc mony in Minnsoa, and dirc many ohr corcial acs ino h Sa

Minnsoa consumrs who call Ws Sky or apply r a loan om Ws Skys wbsi dal

wih ashal rsnais o compl h lon orginaion

38. Mnnsoa consums who rci a loan puodly om Ws Sky ar

almos immdialy sn a Noic of ssignmn, Sal or Transr of Sicing Righs which

sas your loan as bn sold o WS Funding LL and ha "ci oday your loan is now

ond by WS Funding LL and will b sricd by a company cald ashall. Thy ar also

old ha [g]ong ward ashal wll hndl h sicing of you loan which mans

colcing your pymns and handling lad ssus

39 Th Noic also ls Mnnsoa consumrs ha "[u]nlss you dispu h alidiy

of h db or ay poion hrof wihn hiry days ar rcip of h noic ash all will

assum db o b alid onsumrs a old his n hough Dndans kow ha h

loans ar illga and unnrcabl undr Minsoa law bcaus nihr Dfndans nor

Ws Sky icnsd as lndrs in Minnsoa and h oans do no comply wh Minnsoa

usury and consumr pocion laws.

4.ra

lnghs ar akn o gi mislading imprssion o cosumrs ha

Ws Sky is a rbal niy subjc o ibal sorign immuniy or mpl Ws Skys

logo is sun sng bind ps wich s pominnly dspayed in s adsing and

onlin s wb sas ha i is "a ai mricn busnss oprang wihin ror

14


15/27

bndares Cheenne Rver Sux Reservatn a sveregn natn lcated wthn the

Unted States Amerca he la cntract s desgned t gve te bwer the lse

mpressn that the an s prtected b trbal sveregn mmunt

4 Deendats and Weste Sk d nt dsclse t Mnnesta cnsumers that the

lan wll mmedatel be sld t Defndts r that Defndants ae the de ct lender. ven

thugh he dctne bal sveregn mmun des nt appl t the lns, aer the lans ae

assgned t Dendants the rtnel represet t brrwers that the lans are mmune fm

state aw and n parclar state usu law and er lender egulats becas the were

gnated b Western Sk and e sppsedl subject t trbal mmunt hese representatns

e flse ad mslead brwers abut he status ther lans

42 Chce aw and chce venue clauses n cnsumer shrterm lan cntracts

ae specfcall frbdden under Mnnesta law. he representatns hat the lan perrmed

se n the Chenne Rver Sux Resevatn e lse and msleadng n that permance

the cntact ccus f the reservatn Mnnesta bwers are nt n the reseratn nethe

WS undng nr WS nancal ae n te reservatn and CashCall whch seces the ls, s

nt n the reservat he Cheene Rver Sux rbal Cde des nt gve te lans.

Mreve Deendants knw that ever cr whch has csdered the ssue n the merts has

hed tha tate w doe appl t Deedats endng and that the Defndants entatrbe

scheme s a led attempt t evade state law.

COUNT IMINN. S TAT. 8.31AND7.601

4 lantf ealleges all prr paragraphs ths Cmplant

44 Defndants meet the defnt a cnsumer shrerm lender as set n

Mn Stat 4 because he engaged n the busness makng r angng r cnsumer


16/27

so-em oans and are no a nancia insiion or oer eny a is exem om e

reiremens o Mnn Sa 4760 Dendans oans r ,000 or ess required e aymen

o 5% or more o e rinca baance wiin 60 days in ar because o e 50 es a

boowers aid on 850 oans Deendans ied o obain a cense om e Minnesoa

Dearmen o Comerce o oerae as a consumer sorem ender in Minnesoa nd aied o

roide e Minesoa Comissioner o Commerce wi e annua reors requird by Minn

Sa 4760 subd 4

45 Deendans ae rer ioaed Minn Sa 47.60 by urcasing seicing

and coecing on oans a ioae numerous roisons o Minn Sa 4760 For exme

e ineres raes acced by Deendans on e oans were iger an e ineres raes and ees

se r n Minn Sa 4760 subd (a)() e oan conracs conain a coice o aw case

a ioaes Min Sa 4760 subd (a)() e Joan conracs conain a coie o rum

cause a ioas Minn Sa 4760 sbd a)) a eas some o e on conracs

conain a cass aion ban wic ioaes Mi Sa 4760 subd (a)(); an e Joans were

originaed by an eniy a does no ae a icense om e Commissioner o Commerce o

eend consumer sorerm ons o Minnesoans

46 Dendans consumer sor-erm Joas e oid and unenrceabe nder Minn

Sa 4760 subd (6)b ye Dendans coeced on ose oans om Miesoans Moreoer

under Mnn Sa 4760 subd (d) Dendans ook e oans subec o a e cams and

denses a e borrower woud aead agains e originaor o e oans

ccordingy

Dendns ad o ega rig under Minnesoa aw o coec on e oans and knew or soud

ae known a er sam renaibe scee was a ied aem o eade sae aw

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47 Mnn Stat. 7.601 subd. 3 the equies that all consume shot-tem endes

must not engage n collection pactices that ae pohibited by Minn Stat. 33237 Dendants

have voated Min Stat. 33237 3) by using o theatening to use methods of collection that

violate Minnesot law Specically, Defendants theatene to colect on and did collct on loans

that ae illega oid and neoceabe unde Minnesota law In addition Dendants made

epesentations which theaten to bing an action against borrowes in the Cheyene Rive Siou

Tibal Cout, which violates Minnesota law because such choice of law d choie of um

clauses ae dden in consue shot-tem oans unde Miesota law In addition

Dendants epsented to borrowes that thei oans wee not sject to state aw and wee

potected y the doctine of tibal soveeign immnty hese epesentations wee lse and

misleadng

8 In addition Min. Stat. 332.37 2) pohibits any methods of collection which

violate the Fai ebt Collection ractices Act of 1977 Public Law 5-1 FDCPA 1

USC !692e pohiits the use o"y lse deceptive o misleading epesentatin o means

in connection wth the collection of y debt including false epesentations egading the

"egal status o any debt By epesenting that the oans owned by WS Funding and/o WS

Financial wee legaly enceabe and at the inteest ates on those oans wee nceable

and y epesenting that the oans wee potected by tibal aw o the doctne of tibal soveeign

inty Dendants engaged in lse deceptive nd misleading epesentations in conection

with the colectin of debt in vioation of Mnn Stat 33237 12). In addition Dendants

made lse deceptive and misleading epesentations in hat they epesented to borowes that

they owed inteet accrued at ates in eess of those allowed nde Miesota law which

Dendants had no lega ght to collect om Minnesota borrowes

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49 The nneoa oey Geea and he nneoa Commone o Commece

ae ened o he ee e h n nn. Sa 47601 ubd 6 ncudng a decaaon ha a

endan oan o neoan ae od de Sa. 47.601 ubd 6 b)() n

addon he Sa ened o ecoe a money coeced on he oan ncdena acua and

coneuena damage auoy damage o u o $1000 e voaon and a co

dbuemen and aoe e n Sa 47.601 ubd 6)(1)(4) nn Sa 4507

ubd 5 emoweng Commone o Commee o nae gaon o ence aw eaed o

h due and eonbe

COUNT IIMINN. S TAT. 5301ET SEQ. AND 5601ET SEQ.

50 Pan eaege a o aagah of Coman

51 The nneoa Commone o Commeceh auho o eguae he bune

acce o ende n nneoa ha oe ma unecued oan One a o ha eguaon

he encemen o e cenng euemen ende unde neoa aw nn Sa

4701 dcu aboe goe ende ha exend ma necued oan $100 o e n

nneoa and eue uch ende o oban a cene om he Commone o eae a a

conume hoem ende Une deay cheed ende ha make ma conume oan

n exce o $1000 ao m be cened wh he Commone o Commece Fo exame

ende ha make ma unecued oan may ege wh he Commone a an Indua

oan & T unde neoa Saue Chae 5 o a a Reguaed Lende unde nneoa

Saue Chae 56 Thee aue aow uch ende o oe unecued oan o nddua

nneoan o u o $100000 and eue uch ene o ubm egua eo o he

Commone egadng he endng bune ende may no make ma oan o

neoa conume whou beng cened o do o n nneoa ude a een endng

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saue Neihe Dendans no Wese Sky howee oained a icense om he

Commissione o Commece no sumied he epos euied y such endes o he

Commissione o ohewise compied wih he ous eguaions ha goe such ending

2 The Commissione of Commece is empoweed unde Minn Sa 427 sud

o iniiae acions in disic cou o ence poisions o Minnesoa aw wihin his duies and

esponsiiiies he Commssione of Commece is he empoweed o seek injuncie eie

unde Mnn Sa 427 sud 5 o enjon endes who opeae in Minnesoa wihou he

pope Iicensue m he Commssone and ohewise in oaion o Minnesoa Chapes &

6

Though his Coun e Commissione seeks pospecie injuncie ee o enjoin

e ioaions hese saues and o enjoin Dendans om making o coecing on oans in

ioaion o sa aw

COUNIIIMINN A 81AND.0

4. aini e-aeges a pio pagaphs o his Compain

he genea usuy ae caps unde Minnesoa aw e se h in Minn Sa

4 et eq These inees ae caps appy uness he ending is goeed y anohe

Mnnesoa sau o uness he ending is goeed y dea aw Neihe Dendans no

Wese Sky e icense o opeae as any ype o ende unde Minnesoa aw and hei oans

o Minnesoa conmes ae no made pusu o dea aw Whie Dendans ons

$ o ess ae sjec o Minn Sa. 476 he oans moe han $ ae no

Accodingy Dendans oans moe an $ ae sujec o he inees ae caps se

h n Minn. Sa 4 e eq

9


20/27

56 Mnn Stat 3301 ubd I ap th annual ntrt rat fr wrttn loan

ontrat at 8 prnt In volaton o Mnn Stat 3301 ubd 1 Dfndant had and

olltd on loan with ntrt rat o 89.68 prnt to 3286 prnt. h at o ntrt

uurou undr Mnnota aw and volat Mnn Stat. 33.01 ubd I Und Minn Stat

3302 th Mnnota borrow who pad th uuriou at o ntrt a nttld to b

rndd all uh ntrt and t oan ontrat ar vod ud Mnn Stat 3303 and

3305

57 h Minnota Atto Gnral nttld to nr Minn Stat 3.01

puruant to Minn Stat 8 31

COUNT IVPREVENTION OF CONS UMER FAUDACT

58 Plantf rall all pror pararaph o Coplant

59 M Stat 325F69 ubdviion 1 provd

at u o plont b an pron o an aud l ptn lpo rpntaton adn tatnt or dptv prat wth thntnt tat otr r thon n onnton wth th o an randwth not pron ha n t bn d dvd or daad thb njoinab a provdd n ton 325F.70

h tr rhand withn th ann o Mn Stat 325.69 nlud rv

Minn. Stat 325F.68 ubd. 2 2008

60 Dndant u Wt Sk a a ont thr llal lndn opraton n odr

to ilad boowr about who t ar rvn thr loan o and to ll v boowr

th prion tat t oan a ubjt to th doctrn o trbal ovrn unt Wt

Sk i hld out to th publ a a tandalon tribal ntt whh povid al loan to

onur. n ralt Dfndt rat th advrtin and arktn atral fr Wt

Sk and bur Wt Sk r th ot o t opration Dfndant rviw onur

0


21/27

aicaions r nerwring reqiremens conac an rovie csomer sor o borrowers

ring he oan originaion rocess f an service he oans an imeiae b he oans

Wese k oes no receve an amen om consumers r he oans; o e conar

Wese k conracs wh Dendans ha i wi no acce amens om consers on the

oans bere the oans are sod o Defenns Denans noneheess reresen o Minnesota

borrowers ha he oans are sbjec o Inian riba soverei immni Denas engage in

his eaborae ruse o eceive borrowers and regaors regaring her ening oeraions

6 n he corse of his scheme Defenans make nmeros misreresenaions o

borrowers an egage in a nmber o eceive acs. For eame borowers vew avesing

r Wesern k wiho reaizng tha in c CashCa and/or is sbsaries are codcing he

averising. When borrowers r o conac Wese k ring he oan orginaion rocess he

csomer servce resonse he receive is aca om a emoee of Dendnts Even hogh

borowers sbmi heir oan aicaions hrogh Wese ks websie i s CashCa tha

cometes he oan uneriing I is no ni aer borrowers receive heir oan ha Denans

noif hem ha teir oan has been sod o W Fning an/or W Financia an wi be

service b CashCa In reai the sbsce of he oan nsacions ha Denns engaged

in wih Minnesoa borrowers shows ha CashCa or is who owne sbsidiaries W

Fning and W Financia are he acta or de co ender r he oans a c ha Dendans

go o grea enghs o concea om borrowers ni aer he oan ransacon s comee.

6. rogh s eaborae deceion an misreresenaion CashCa aems o

egimie he hghineres ons i rovdes to Minesons an o deceive borrowers abo he

ega sas of he oans when in c Dendans ending is iega hrogh hs ad and

misreresenao Denans charge n coec om Minnesota consmers raes of neres n


22/27

es fa ighe tn ae allowed unde Minnesota law nd puort to bind Minnesotans to

conact tens hat e speccally pohibited nde Minnesota law

63 Dendnts' condct descibed above constittes multiple, sepaate iolations of

Mnn Stat 3256 sbd I. Defendants hae engaged in deceptie and adulet pactces

and have made se and miseadng statements wih the intent that otes ely teeon in

connection with the sale of Defendants seices By iling to disclose d omiting material

cts Dendants hae fuhe engaged in deceptive d audulent pactices in iolation of the

Consume Faud Act

64 Te Minneota Atoey Genea is empoweed to ence Minn Stat 831

and 325F69 against Dendants andis entitled to the elief set th in those statutes

COUNTY

UNIFORM DECEPTVE TRADE PRACTCES ACT

65 Plnti e-aleges all pio paagaphs of this Complaint

66 Minn Stat 325044 subdiison 1 povides in prt:

A peson engages in a deceptive tade pactcewhen in te couse of business,ocaton, o occupation the peson

(5 epesents that goods o seices have chaacteistics . [o]benets that tey do not ae

(7 epesents that goods o seices ae of a particular standardquality o gade f they are of anothe

(9 adeises goods o serices wh ntent not to sell them asadertised

(1) mkes false o misleading statements of ct conceing theeasons existence of o amounts of pice eductions;

( 13) engages in any othe conduct which similly ceates a likelihoodof consion o of msundestanding

22


23/27

67 Deendans use Wesen Sky as a on hei illegal ending oeaions in ode

o mislead oowes aou who hey ae eeiing hei loan om and o lsely gie orowes

he imession ha he lons ae suje o he doine o ial soeeign immuniy. Wese

Sky is hed ou o he ui as a sand-alone ial eniy whh oides smal oans o

onsumes In ealiy Dendans eae he adeising nd makeing maeias Wese

Sky nd eimuse Wese Sky he oss o is oeaions Dendans eiew onsume

aaions undewing equiemens ona and ode usome suo oowes

dung he loan oiginaion oess nd and seie e oas and immediaely uy he loans.

Wese Sky dos o eeie any aymen om onsumes he oans o e onay

Wese Sky onas wih Dendans ha i wl no ae aymens om onses on e

loans ee he loans ae sold o Dendans Dendans noneheless eesen o Minnesoa

oowes ha he oans ae suje o Indian ial soeeign immiy Deendans engage in

his elaoae rus o deeie orowes and egulaos egading hei ending oeaions

68 In he ouse o his sheme Deendans make nmeous miseesenaions o

oowes d engage in a nume o deeie as. Fo eame oowes iew aderising

Wese Sky whou ealiing ha in ashall ad/o is ssdiaies ae oduing he

adeising When oowes y o ona Wese Sky dung he loan oginaion oess he

usome seie esonse hey eeie is aually om a emloyee o Dendans Een hough

oowes sumi hei loan aliaions hough Wese Skys wesie is ashall ha

omlees he loan undewiing I is no nl ae oowes eeie hei loan ha Dends

noi hem ha he oan has een sold o WS Fnding and/o WS Finanial nd wll e

seied y ashall. In ealiy he susane o he loan ansaions ha Dendans engaged

in wih Minnesa oowes shows ha ashall o is wholy owned susidiaies WS

23


24/27

unding and WS inancial e he acu or de co lender r he loans a c ha Dendans

go o grea lenghs o conceal om borrowers nil aer he loan ransacion is complee

69 Tough his elaborae decepion and misrepresenaion CashCall aemps o

legiimize he highineres loans i proides o Minnesoans and o deceie borrowers abou he

lega sas o he loans when in c Denans lending is ilegal Trough his aud and

misrepresenaion Dendans charge and collec om Minnesoa consumers raes o ineres and

es ar hgher han are allowed under Minnesoa law d puo o bind Minnesoans o

conac ems ha are specical prohibied unde Minnesoa law

70 Dendans creaed his decepie scheme o case a likelihood o consion or

misundersanding as o he aliaion connecion or associaion beween CashCall WS

unding WS inancial and Wese Sk and o mislead borrowers regarding he egal saus o

heir loans

7. Dendans conduc descrbed aboe consiues muliple separae iolaions o

Minn Sa 4 subd Dendan hae engaged in decepie praices by represening

ha serices hae characerisics and benes ha he do no hae; repesening ha seces are

o a paricuar sandard quali or grade when he are o anoher aderising seices wih

inen no o sell hem as aderised making ase or misleading saemens o c conceing

he reasons r exisence o o amouns o price reducions and engaging in oher conduc

which similarl creaes a likelihood o consion or o misdersanding B iling o disclose

and omiing marial cs Dendans hae urher engaged in decepie an audulen

pracices in iolaion o he Unim Decepie Tade Pracices Ac

72. The Minnesoa Aoey Geneal is empowered o enrce Minn. Sa 831

and 35.4 agans Dendans and is eniled o he relie se rh in hose saes

4


25/27

COUNIUNJUS T NRICHMN

73 anti rag a prior paragraph of t Compaint

4 By payng Dfndt intrt rat that far xcd to aowd by Minota

aw on thr oan Mnnoa borrowr conrrd a bnt on Dndan

5 Dndant knowngy accptd uch bnt to which ty wr not nttd

76 Dndant accpc and rtnion of uch bnt undr circumtanc

wod b unut and nquitab

77 A a mattr of quiy and Minnota common aw Minnota borrowr houd

b mad who b appiaon of th doctrn of unu rcmn

RLF

WHERER, th Stat of Mnoa by it Aorny Gnra Lori Swanon and Sat

of Mnnota by i Commiionr of Commrc Mcha Rohman rpcty ak thi Court

to award dgmnt agant Dndant a ow:

! Dcaring tat Dndan' action a rh abov contit mutip

vioation of Min Sa 476 53 et seq, 56. et seq 4759 334 et seq 3323 et

seq 325F .69 and 325D44

2 Eoinng Dndant and i mpoy ocr dirctor agnt uccor

aign afat mrgd or acqurd prdcor parnt o controing nti bidiar

and a or pon ang in concr or partcipaion wih t om ngagng n conduct n

vioation of Min. Sa. 476 4759 334 et seq, 333 et seq 325F69 325D.44 or

ch 53 or 56;

3 F th rif auorizd in Minn. Stat 476 4759 334 et seq 3323 et

seq 325F69 an 325D.44

25


26/27

4. Ading judgment ginst Dendnts estitutin unde te paes arae

dtine te gen equitbe es is Cu Minn Stt 831 nd te ity,

esns injued by Dendnts ts desibed in is Cmint

5 Adng jdgment ginst Dendts ivi enties sunt t Minn Stt

831 subd 3 e sete vitin Minnest

6 Disgging Dendts igtten gins usunt t te dtine unjust

eiment

7 Adng Pnti its sts indng sts investign and tneys es,

s tized by Min Stt 831 subd 3 nd

8 Gnting su e eie s vided by s te Cut deems ite

nd jus

Dted Resety submitted

LOR SWANSONAttey GeneSte Minnes

NATHAN RENAMAN

DAAssistnt Attey GeneAtty Reg N 384

445 Minnest Steet Suite St

Pu Mines 5511-13651) 7571478 Vie651) 96141 Y)

ATORNEYS OR PLANS

6


27/27

MINN S TAT 549.21 AC OWDGMN

Th wh bhl h hd dumn i d knwldg hugh

undigd ul h nin inluding nbl tn d h n m

b wdd th i ti uun Mi

minnesota v cashcall complaint

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