A Jenkintown payday lender who turned preying upon the financially vulnerable into a family business before helping federal prosecutors put two titans of the industry behind bars was sentenced to 37 months in prison Tuesday and ordered to pay more than $20 million in financial penalties.
Still, prosecutors credited him with genuine attempts to make amends by recording others for the FBI and later testifying against two of the nation's top payday lenders — Charles M. Hallinan, of Villanova, and professional race-car driver Scott Tucker, of Missouri, both of whom are now serving prison terms.
U.S. District Judge Eduardo Robreno grappled Tuesday to fashion an appropriate punishment for the man who tearfully described himself as a "horrible person" trying to become a better one.
"Who is Adrian Rubin?" the judge mused at one point. "Is he the criminal who engaged in criminal activity over a long period of time, or is he the informed cooperator who cooperated against several codefendants and helped take down a pernicious industry? Even Mr. Rubin probably doesn't know."
In addition to imposing the prison term, Robreno also formalized orders that require Rubin to pay about $10 million in restitution and $100,000 in fines and to forfeit more than $10 million in assets.
Rubin's lawyer, Stephen Lacheen, said his client had already paid much of that money and had gone further to make up for the harm he caused his victims, including buying up portfolios of other payday lenders' bad debt solely so he could forgive the borrowers' obligations.
In the past, Lacheen said, Rubin would have scoffed at the low-income debtors who came to his company for its short-term, high-interest payday loans with astronomical annual interest rates and wondered why they were "begging" for money when they already spent what they had on "tattoos and cigarettes."
Now, Rubin told Robreno on Tuesday: "I see them as people who are much less fortunate than me who have problems. That's not the way I saw them before. I saw them as a way to make money."
It was soon after Rubin was released from a yearlong prison sentence for tax evasion in 1997 that he got his start in the payday lending industry – a business his past criminal record should have barred him from. Recognizing that, he forged the signatures of his father-in-law and a family friend on incorporation papers for the company through which he would later distribute his loans.
He turned to Hallinan, a man widely recognized as a pioneer for many of the business strategies that have helped payday lenders dodge regulators for years, for help getting started in the industry.
And soon enough, as Rubin explained to jurors at Hallinan's trial, he was making millions of dollars off loans issued over the internet, often in violation of state usury laws.
Unlike Hallinan and Tucker – who both maintained throughout their trials that their loans offered a legitimate service to cash-strapped borrowers without access to more traditional lines of credit – Rubin was clear-eyed in describing the true nature of their business during his 17 hours of trial testimony over four days last year.
He maintained throughout that he never had any doubts that he, Hallinan, and Tucker were breaking the law to stay profitable. Still, even while he was making millions on payday lending, he roped his sons into a separate scam selling worthless credit cards to people with bad credit.
These Platinum Trust Cards required an up-front payment of $69 to $99 with an additional $19 monthly fee.
But instead of receiving a traditional line of credit that could be used anywhere, more than 70,000 victims were mailed flimsy cards that only worked at a collection of 10 online stores that sold a seemingly random assortment of overpriced, off-brand products in large quantities – including a case of 432 shower caps that sold for $430 or a case of $144 "play flutes" for $573.
Assistant U.S. Attorney Mark Dubnoff said authorities had not calculated a full estimate of the profits earned by Rubin's many online payday lending companies — with names like Payday Loan Yes and USA Cash Express. Still, in just one year of their operations, those businesses made more than $2 million, Dubnoff said.
Lacheen, their father's lawyer, recalled sitting beside his client the day prosecutors unsealed multicount indictments against the sons and he realized they would likely be headed to prison.