Borrowers Ask Court for $25 million Judgment in Loan Scam Case
Inside Subprime: Nov 21, 2018
By Grace Austin
Borrowers are asking that a court hold up a $25 million judgment against a Canadian family of alleged scammers that ripped off more than 100 consumers trying to receive loans.
Sandy Hutchens, his wife Tanya Hutchens and their daughter Jennifer Hutchens solicited loan applications and provided written monetary commitments to borrowers; that was in exchange for large advance fees. But those borrowers say they never received a dime in loans from the Toronto-based family’s businesses, even though the Hutchens committed to $3.5 billion in loans.
In the latest news in the five-year legal battle, the Hutchenses filed an appeal in late October of the judgment.
The borrowers asking the 10th Circuit Court of Appeals to maintain that multimillion-dollar judgment are led by a residential golf course developer in Colorado; a Las Vegas resident; and a Chicago-located company. They’re saying the immense amount they were awarded in a 2017 trial was understandable given the extent of the crimes, which the judge said included violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act. And those borrowers say that they haven’t been paid any of that $25 million judgment.
The lawsuit dates back to June 2013. The borrowers were awarded nearly $8.5 million from a jury after a nine-day trial in which 24 witnesses took the stand in May 2017. A judge upped that judgment to just over $25 million because of the RICO violations.
Patriarch Sandy Hutchens is accused of setting up several businesses to give out the loans to borrowers, and even working under several aliases.
After consumers were approved for the loans and the Hutchens received the advance fees, the borrowers were refused the loans usually for an unsubstantiated reason. For example, one of the plaintiffs, Colorado Golf Club Holding Co. of Denver, was developing a golf course when an investor withdrew from the project. Sandy Hutchens said he was the CEO of a mortgage company and he could help the company get a $34 million loan in exchange for advance fees.
According to the lawsuit, CGC paid Hutchens more than $180,000 in administrative, legal and inspection fees.
The attorney for the borrowers claimed during the trial that the advance fee fraud dated to the mid- to late-aughts, and Hutchens had a long criminal record that included everything from fraud and theft to assaulting an officer.
The Hutchenses’ attorney said at trial that Sandy Hutchens had an upstanding background as a lender that went back decades, and that he was only the middle man between wealthy investors and the borrowers.
The case is considered unusual because class action lawsuits are rarely tried in federal court, at least according to the borrowers’ attorney.