A 77-year-old former landfill owner and investment banker from Pennsylvania who came up with a surefire way to make money—by illegally charging high interest rates on loans made to those who could least afford them—will likely spend the remainder of his life in prison.

Charles Hallinan, dubbed by prosecutors as the “godfather of payday lending” because his tactics to circumvent state laws and hide his long-running scheme paved the way for others to follow in his footsteps, recently received a 14-year federal prison sentence for his role in collecting hundreds of millions of dollars in short-term loans with interest rates that approached 800 percent.

Prosecutors portrayed Hallinan as a ruthless loan shark who enriched himself by trapping his victims in an endless cycle of debt. His scheme was simple: make small loans with fixed fees that borrowers agreed to pay back quickly, typically when their next payday arrived—hence, the name payday loans. A borrower might take out a $300 loan to cover an emergency car repair and agree to pay it back, along with a $90 fee, within two weeks. But if the loan was not repaid within that time, new fees were applied and the principal was not reduced.

For example, if a person borrowed $300 and agreed to pay a $90 fee with a two-week due date but failed to repay the loan for eight weeks, his or her fee would then be $360, and the original $300 loan would still be due.

“Anyone who didn’t have a desperate need for money would not take out one of these loans,” explained Special Agent Annette Murphy, who investigated the case from the FBI’s Philadelphia office. “People with limited resources were getting sucked into a cycle of paying fees and not paying down the principal.”

That was how Hallinan collected an astonishing amount of money from what is estimated to be hundreds of thousands of low-income victims from around the country. According to court documents, Hallinan was in the payday loan business from at least 1997 to 2013. The documents also revealed that between 2007 and 2013, Hallinan loaned $422 million and collected $490 million in fees. “During that period alone,” Murphy said, “he netted $68 million.”

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