Chattanooga payday loan operator pleads guilty to usury in New York

A used car salesman turned tech entrepreneur who operated an illegal payday lending syndicate from Chattanooga will pay $9 million in fines and restitution, as well as serve 250 hours of community service and three years of probation, after pleading guilty to felony usury in New York.

Further from the Times-Free Press:

Carey Vaughn Brown, 57, admitted to New York prosecutors that he broke the law from 2001 to 2013 by lending millions of dollars — $50 million to New Yorkers in 2012 alone — with interest rates well in excess of the state’s 25 percent annual percentage rate cap.

A Times Free Press investigation in 2011 found that Brown was making loans that, at times, carried an annual interest rate of more than 1,000 percent. Such loans would have also been illegal in Tennessee, though officials at the Tennessee Department of Financial Institutions never took any public action against Brown.

Brown’s admission of guilt came after years of denials, lawsuits against whistleblowers, and attempts to camouflage his profitable web-based payday loan business by disguising it as a network of unrelated shell companies in Chattanooga, which shut down in 2013 after banks refused to do business with him anymore.

Brown declined to comment, citing the terms of his plea agreement.

His companies sported generic names including Terenine, Area 203, ACH Federal and Support Seven, and performed legitimate marketing and technology work for well-known companies and nonprofit organizations such as the Chattanooga Area Chamber of Commerce, Focus on the Family and Precept Ministries.

But behind the scenes, the network of businesses operated as a single syndicate to generate high-interest, short-term loans through websites like, and

“It’s a horrible mark on Chattanooga, and it never should have happened,” said Chris Christiansen, the former director of infrastructure architecture and design for Terenine, one of Brown’s now-shuttered shell companies.

… From 2008 through 2010, the businesses made nearly 1.5 million loans to about 1.1 million unique clients, according to former operations manager Casey Lomber’s written testimony to the FTC.

And though much of the company’s money was being made illegally, Brown was operating one of the largest businesses in Chattanooga.

In 2012 alone, Brown cycled about $500 million in loans through his Chattanooga-based business, according to the New York indictment. About $150 million of that amount was gross profit consisting of fees and interest, of which Brown siphoned off an estimated $5 million to $8 million into a company he controlled named Millennium Financial Concepts, according to the indictment.

Temple — Brown’s chief legal adviser — was indicted for and pleaded guilty to usury, the same crime as her client.