A CHORLEY loan shark who ran an illegal money lending business over a period of approximately 8 years and received over £1million in loan repayments was jailed for 15 months at Preston Crown Court on Monday, 7 August.
Loan shark John McCullagh, aged 53, pleaded guilty to illegal money lending between July 2008 and August 2016 at a plea and pre-trial hearing on 12 January.
McCullagh’s partner, Karen Roberts, aged 58, received a 9-month suspended prison sentence and 160 hours unpaid work after she was found guilty of laundering cash from her partner’s loan shark business during a four day trial at Preston Crown Court in June.
The couple were investigated by the England Illegal Money Lending Team (IMLT), who work in partnership with Lancashire Trading Standards and Lancashire Constabulary.
A warrant was executed at the defendants’ home address in Isleworth Drive, Chorley, on 10 August 2016. During searches, IMLT officers’ recovered loan related documents, electronic and storage devices and over £4,000 in cash.
On behalf of the prosecution, Jonathan Barker told the court that McCullagh was not authorised to lend money during the 8-year period he was running his illegal money lending business.
Mr Barker added that McCullagh ‘clearly knew he needed a licence’ to carry out his money-lending business as he had previously worked for a licenced lender between 1986 – 2001.
In 2013, John McCullagh was visited by Lancashire County Council Trading Standards officers in connection to his illegal money lending business. He was warned about his conduct and the need to have a consumer credit licence to lend money.
The prosecution told the court that McCullagh’s customers were often in a vulnerable financial position; the defendant was charging borrowers £50 interest for every £100 borrowed.
McCullagh advertised his services in leaflets that were distributed across the community. The defendant would visit his customers’ home addresses to collect the repayments or would instruct them to pay the money into his accounts.
The court heard how one victim was shouted at by McCullagh and was told that he’d send ‘the big boy’s around’ if she did not pay him.
Mr Barker went on to say that McCullagh shouted at another victim because she could not afford to repay him because she had to purchase flowers for her aunt’s funeral.
Although threats were never issued, a third victim who suffered from depression and anxiety was so worried that he used to hide in his bedroom to avoid McCullagh.
The prosecution moved on to Roberts’s illegal activities; telling the court how £50,000 was transferred from a business account held by John McCullagh in to her bank account the day after her partner was arrested by the IMLT (11 August 2016).
Karen Roberts was arrested and interviewed under caution by IMLT officers on 29 September 2016. She accepted the receipt of the £50k and denied knowing or suspecting that this money came from crime.
Records recovered from the defendants’ home address indicated that McCullagh had loaned over £870,000 and received more than £1.1 million in loan repayments. At the time of his arrest, the defendant had in excess of £230,000 outstanding on loans for which interest was payable.
An estimated 310,000 households nationally are borrowing from illegal money lenders, many of whom charge exorbitant rates of interest to trap people into a spiral of debt.
Loan sharks often target low-income families; preying on struggling individuals and exploiting them for personal financial gain.
Tony Quigley, Head of the England Illegal Money Lending Team said:
“This result sends a clear message that loan sharks who are caught operating an illegal money lending business will be pursued and prosecuted by the IMLT.
“Loan sharking will not be tolerated in Lancashire and we will continue to work with Lancashire County Council and Lancashire Constabulary to combat this under-reported crime. Loan sharks are criminals who prey on vulnerable people, exploiting them for their own financial gain.
“If you have been the victim of a loan shark, please call us on our 24-hour hotline 0300 555 2222. We will take information anonymously or in confidence. Alternatively, you can use our website to report a loan shark online www.stoploansharks.uk.”
County Councillor Albert Atkinson, Deputy Leader of Lancashire County Council with responsibility for Trading Standards, said:
“Illegal money lending is an often hidden problem which has a terrible impact on our communities, leaving vulnerable people in financial difficulty.
“It is a crime and not something we will tolerate in Lancashire. We will continue to work closely with the Illegal Money Lending Team and the police to tackle this problem.”
Upon sentencing McCullagh, HHJ Newell said:
“You were never at any stage authorised to lend money and you did not take the appropriate steps to turn your business in to a legal enterprise. The people who you lent money to were financially vulnerable and the interest rates you charged were high. There were substantial profits made from this business and you had the benefits of these profits through various bank accounts. You knew you needed a license due to your previous employment with a legitimate loan company and had been told explicitly so by the authorities in 2013.”
Upon sentencing Roberts, HHJ Newell added:
“The transfer of the £50,000 was a deliberate attempt to frustrate the investigation in anticipation of your partner’s accounts being restrained.”
Nationally, Illegal Money Lending Teams have secured more than 379 prosecutions for illegal money lending and related activity, leading to nearly 325 years’ worth of custodial sentences. They have written off £72.5 million worth of illegal debt and helped over 27,000 people.
To report a loan shark:
Call the 24/7 confidential hotline 0300 555 2222
Text a report to 078600 22116
Visit the website www.stoploansharks.co.uk
Private message us on www.facebook.com/stoploansharksproject