High-profile settlement winners lied to by loan-marketing firm, CFPB alleges

Former professional football players suffering from neurological disorders, victims of the Deepwater Horizon oil-rig disaster, 9/11 first responders and others awaiting payment from legal settlements were lied to by a New Jersey company in loan offerings, the Consumer Financial Protection Bureau alleged in taking action against the company Tuesday.

In a complaint and proposed consent order filed in federal court, Top Notch Funding of Verona, N.J., would be barred from offering or providing such products in the future. Further, the company’s principals — its owner Rory Donadio, and his business associate John “Gene” Cavalli (of New York) —  would be required to pay $70,000 in civil money penalties to the CFPB’s Civil Penalty Fund. CFPB said the proposed penalties consider the defendants’ inability to pay more.

According to CFPB, Top Notch marketed loans to consumers who were entitled to payments from legal settlements or victim-compensation funds. These consumers, CFPB stated, included former NFL players who are entitled to receive money from a settlement with the National Football League for injuries suffered while playing professional football, individuals who were harmed by the Deepwater Horizon oil-rig accident and are entitled to payouts from settlements related to that incident, and first responders injured because of the Sept. 11, 2001 World Trade Center attack who were entitled to payments from the Zadroga Fund established by Congress.

The CFPB complaint alleges that the company, through Donadio and Cavalli, offered loans to these settlement-fund and victim-compensation-fund recipients while lying about the cost of the loans in the long run, among other important facts.

The CFPB action, filed in federal court in the Southern District of New York, alleges that in marketing the loans, Top Notch, Donadio, and Cavalli engaged in deceptive acts and practices, in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

“We allege that this company, its owner, and its associate misled vulnerable consumers by lying about the terms of the deals they offered,” said CFPB Director Richard Cordray. “Our proposed order seeks to knock these parties out of this business altogether, and impose penalties on them.”

Consumer Financial Protection Bureau takes action against Top Notch Funding for lying in loan offers to NFL players, Deepwater Horizon Victims, and 9/11 first responders

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