The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. Please improve this article and discuss the issue on the talk page. (June 2011)

A loan shark is a person or body that offers unsecured loans at illegally high interest rates to individuals, often enforcing repayment by blackmail or threats of violence.

Throughout history, usury laws made loan sharks commonplace.^{[clarification needed]} Many moneylenders skirted between legal and extra-legal activity. In the recent western world, loan sharks have been a feature of the criminal underworld, but are less common in law-abiding life.

United States[link]

19th century salary lenders[link]

In late 19th century America, legal interest rates made small loans unprofitable, and small-time lending was frowned upon by society, as a borrower of small loans was seen as an irresponsible person who could not manage a budget. Banks and other major financial institutions thus stayed away from small-time lending. There were, however, plenty of small lenders offering loans at profitable but illegally high interest rates. They presented themselves as legitimate and operated openly out of offices. They only sought customers whom they felt were good risks: a steady and respectable job (a regular income and a reputation to protect), married (unlikely to flee town), and legitimate motives for borrowing. Gamblers, criminals and other disreputable, unreliable types were avoided. They made the borrower fill out and sign seemingly legitimate contracts. Though these contracts were not legally enforceable, they at least were proof of the loan, which the lender could use to blackmail a defaulter.

To coax a defaulter into paying up, the lender might threaten legal action. This was a bluff, since the loan was illegal; the lender preyed on the borrower's ignorance of the law. Alternatively, the lender resorted to public shaming, such as complaining to the borrower's employer, who disdained indebted employees and often fired them, or shouting demands outside the borrower's home. Whether out of gullibility or a desire to protect his reputation, the borrower usually succumbed and paid up.

Many customers were employees of large firms, such as railways or public works. Larger organizations were more likely to fire employees for being in debt as their rules were more impersonal, which gave the loan shark a powerful form of blackmail. It was easy for lenders to learn which large organizations did this rather than collecting information on the multitude of smaller firms. Larger firms had more job security and the greater possibility of promotion, so employees sacrificed more to ensure they were not fired. The loan shark could also bribe a large firm's paymaster to provide information on its many employees. Regular salaries and paydays made negotiating repayment plans simpler.^[1]

The size of the loan and the repayment plan were often tailored to suit the borrower's means. The smaller the loan, the higher the interest rate was, as the costs of tracking and pursuing a defaulter was the same whatever the size of the loan. The attitudes of lenders to defaulters also varied: some were lenient and reasonable, readily granting extensions and slow to harass, whilst others unscrupulously tried to milk all they could from the borrower (e.g. imposing late fees).

Because salary lending was a disreputable trade, the owners of these firms often hid from public view, hiring managers to run their offices indirectly. To further avoid attracting attention, when expanding his trade to other cities, an owner would often found new firms with different names rather than expanding his existing firm into a very noticeable leviathan.

The penalties for being an illegal lender were mild. Illegal lending was a misdemeanor, and the penalty was forfeiture of the interest and perhaps the principal as well. But these were only ever imposed if the borrower sued, which he typically could not afford to do.^[2]

Opposition to salary lenders was spearheaded by social elites, such as businessmen and charity organizations. Businessmen were encouraged not to fire employees who were indebted to loan sharks, as they unwittingly supported the industry by providing lenders with a means of blackmailing their customers ("pay up or we'll tell your boss and you'll be fired"). Charities provided legal support to troubled borrowers. This fight culminated in the drafting of the Uniform Small Loan Law, which brought into existence a new class of licensed lender. The law was enacted, first in several states in 1917, and was adopted by all but a handful of states by the middle of the 20th century.^[3] The model statute mandated consumer protections and capped the interest rate on loans of $300 or less at 3.5% a month (42% a year), a profitable level for small loans. Lenders had to give the customer copies of all signed documents. Additional charges such as late fees were banned. The lender could no longer receive power of attorney or confession of judgment over a customer. These licensing laws made it impossible for usurious lenders to pass themselves off as legal. Small loans also started becoming more socially acceptable, and banks and other larger institutions started offering them as well.

20th century gangsters[link]

In the 1920s and 1930s, American prosecutors began to notice the emergence of a new breed of illegal lender that used violence to enforce debts. The new small lender laws had made it almost impossible to intimidate customers with a veneer of legality, and many customers were less vulnerable to shaming because they were either self-employed or already disreputable. Thus, violence was an important tool, though not their only one. These loan sharks operated more informally than salary lenders, which meant more discretion for the lender and less paperwork and bureaucracy for the customer. They were also willing to serve high-risk borrowers that legal lenders wouldn't touch.

Threats of violence were rarely followed through, however. One possible reason is that injuring a borrower could have meant he couldn't work and thus could never pay off his debt. Many regular borrowers realized the threats were mostly bluffs and that they could get away with delinquent payments. A more certain consequence was that the delinquent borrower would be cut off from future loans, which was serious for those who regularly relied on loan sharks.^[4]

One important market for violent loan sharks was illegal gambling operators, who couldn't expose themselves to the law to collect debts legally. They cooperated with loan sharks to supply credit and collect payments from their punters. Thieves and other criminals, whose fortunes were frequently in flux, were also served, and these connections also allowed the loan sharks to operate as fences.^[5] Another type of high-risk customer was the small businessman in dire financial straits who couldn't qualify for a legal loan.

Violent loansharking was typically run by criminal syndicates, such as the Mafia. Many of these were former bootleggers who needed a new line of work after the end of Prohibition. Towards the 1960s, loan sharks grew ever more coordinated, and could pool information on borrowers to better size up risks and ensure a borrower did not try to pay off one loan by borrowing from another loan shark. The fearsome reputation of the Mafia or similar large gang made the loan shark's threat of violence more credible.

Mafia links[link]

Origins in "salary buying", 1920-criminalization[link]

Although the reform law was intended to starve the loan sharks into extinction, this species of predatory lender thrived and evolved. After high-rate salary lending was outlawed, some bootleg vendors recast the product as "salary buying". They claimed they were not making loans but were purchasing future wages at a discount. This form of loansharking proliferated through the 1920s and into the 1930s until a new draft of the Uniform Small Loan Law closed the loophole through which the salary buyers had slipped.^[6] Salary-buying loan sharks continued to operate in some southern states after World War Two because the usury rate was set so low that licensed personal finance companies could not do business there.^[7]

Post-criminalization[link]

Organized crime began to enter the cash advance business in the 1930s, after high-rate lending was criminalized by the Uniform Small Loan Law. The first reports of mob loansharking surfaced in New York City in 1935, and for 15 years, underworld money lending was apparently restricted to that city.^[8] There is no record of syndicate "juice" operations in Chicago, for instance until the 1950s.

In the beginning, underworld loansharking was a small loan business, catering to the same populations served by the salary lenders and buyers. Those who turned to the bootleg lenders could not get credit at the licensed companies because their incomes were too low or they were deemed poor risks. The firms operating within the usury cap turned away roughly half of all applicants and tended to make larger loans to married men with steady jobs and decent incomes.

Those who could not get a legal loan at 36% or 42% a year could secure a cash advance from a mobster at the going rate of 10% or 20% a week for small loans. Since the mob loans were not usually secured with legal instruments, debtors pledged their bodies as collateral.^[9]

In its early phase, a large fraction of mob loansharking consisted of payday lending. Many of the customers were office clerks and factory hands. The loan fund for these operations came from the proceeds of the numbers racket and was distributed by the top bosses to the lower echelon loan sharks at the rate of 1% or 2% a week. The 1952 B-flick "Loan Shark", starring George Raft, offers a glimpse of mob payday lending. The waterfront in Brooklyn was another site of extensive underworld payday advance operations around mid-century.

1960s heyday-present[link]

Over time, mob loan sharks moved away from such labor intensive rackets. By the 1960s, the preferred clientele was small and medium sized businesses. Business customers had the advantage of possessing assets that could be seized in case of default, or used to engage in fraud or to launder money. Gamblers were another lucrative market, as were other criminals who needed financing for their operations. By the 1970s, mob salary lending operations seemed to have withered away in the United States.^[10]

At its height in the 1960s, underworld loansharking was estimated to be the second most lucrative franchise of organized crime in the United States after illegal gambling. Newspapers in the 1960s were filled with sensational stories of debtors beaten, harassed, and sometimes murdered by mob loan sharks. Yet careful studies of the business have raised doubts about the frequency with which violence was employed in practice. Relations between creditor and debtor could be amicable, even when the "vig" or "juice" was exorbitant, because each needed the other. FBI agents in one city interviewed 115 customers of a mob loan business but turned up only one debtor who had been threatened. None had been beaten.^[11]

Non-mafia sharks[link]

Organized crime has never had a monopoly on black market lending. Plenty of vest-pocket lenders operated outside the jurisdiction of organized crime, charging usurious rates of interest for cash advances. These informal networks of credit rarely came to the attention of the authorities but flourished in populations not served by licensed lenders. Even today, after the rise of corporate payday lending in the United States, unlicensed loan sharks continue to operate in immigrant enclaves and low-income neighborhoods. They lend money to people who work in the informal sector or who are deemed to be too risky even by the check-cashing creditors. Some beat delinquents while others seize assets instead. Their rates run from 10%–20% a week, just like the mob loan sharks of days gone by.^[12]

UK loan sharks[link]

The research by the government and other agencies estimates that 165,000 to 200,000 people are indebted to loan sharks in the United Kingdom. Loan sharking is treated as a high-level crime by law enforcement, due to its links to organized crime and the serious violence involved.^[13] Payday loans in the United Kingdom have been described as "legal loan sharking".^[14] Campaign group Debt on our Doorstep was launched in 1999.

Non-standard lenders in the United States[link]

In the United States, there are lenders licensed to serve borrowers who cannot qualify for standard loans from mainstream sources. These smaller, non-standard lenders often operate in cash, whereas mainstream lenders increasingly operate only electronically and will not serve borrowers who do not have bank accounts. Terms such as sub-prime lending^{[citation needed]}, "non-standard consumer credit"^{[citation needed]}, and Payday loans^{[citation needed]} are often used in connection with this type of consumer finance. The availability of these products has made illegal, exploitative loan sharks rarer, but these legal lenders have also been accused of behaving in an exploitative manner. For example, payday loan operations have come under fire for charging inflated "service charges" for their services of cashing a "payday advance", effectively a short-term (no more than one or two weeks) loan for which charges may run 3–5% of the principal amount. By claiming to be charging for the 'service' of cashing a paycheck, instead of merely charging interest for a short-term loan, laws which strictly regulate moneylending costs can be effectively bypassed.

Payday lending[link]

Licensed payday advance businesses, which lend money at high rates of interest on the security of a postdated check, are often described as loan sharks by their critics due to high interest rates that trap debtors, stopping short of illegal lending and violent collection practices. Today’s payday loan is a close cousin of the early 20th century salary loan, the product to which the "shark" epithet was originally applied, but they are now legalised in some states.

A 2001 comparison of short-term lending rates charged by the Chicago Outfit organized crime syndicate and payday lenders in California revealed that, depending on when a payday loan was paid back by a borrower (generally 1–14 days), the interest rate charged for a payday loan could be considerably higher than the interest rate of a similar loan made by the organized crime syndicate.^[15]

[edit] Yamikinyu in Japan

The regulation of moneylenders is typically much looser than that of banks. In Japan, the Moneylending Control Law requires only registration in each prefecture. In Japan, as the decades-long depression lingers, banks are reluctant to spare money and regulation becomes tighter, illegal moneylending has become a social issue. Illegal moneylenders typically charge an interest of 30 or 50 % in 10 days (in Japanese, these are called "to-san" ('to' meaning ten and 'san' meaning three) or "to-go" ('to' meaning ten and 'go' meaning five)), which is about 1.442 million % or 267.5 million % per annum. This is against the law that sets the maximum interest rate at 29.2 %. They usually do business with those who cannot get more money from banks, legitimate consumer loans, or credit cards.

[edit] Ah Long in Malaysia and Singapore

Ah Long (derived from the Cantonese phrase '大耳窿' (Jyutping: daai6 ji5 lung1) is a term for illegal loan sharks in Malaysia and Singapore. They lend money to people who are unable to obtain loans from banks or other legal sources, mostly targeting habitual gamblers. They charge a very high interest rate (about 40% per month/fortnight)^{[citation needed]} and frequently threaten violence (and administer it) towards those who fail to pay in time.^[16][17]

[edit] Ah Long tactics

When a person fails to pay in time, the Ah Long will spray, splash, or write threats in red paint on the walls of the house or property of that person as a threat of violence and to shame the borrower into repaying the loan. A common use of painting includes the characters "O$ P$" meaning "owe money, pay money". According to local police authorities, there have been cases where borrowers were beaten or had their property damaged or destroyed, and some victims have committed suicide.^[16]

Pig heads are sometimes hung outside the borrower's house, as a type of intimidation as well as a way of 'marking' the person as a loan 'defaulter'.

Ah Long sometimes break into victim's houses and steal items of the loan's value. This method is commonly used to save time and also effort.^{[citation needed]}

Recent cases shows that Ah Longs also displays the borrower's identity card on a huge banner and post it on fences. Since Ah Longs need only an identity card from borrowers, this tactic is becoming common because it shames the borrower publicly into paying up.

Borrowers often use their outdated identity card to borrow money, with the intent to not pay what they owe. As a result, unsuspecting house owners end up paying the price of receiving the Ah Long tactics of intimidation. Since they are not the borrowers, the intimidation does not stop and the Ah Long will keep on harassing them.

See also[link]

• Predatory lending

References[link]

External links[link]

• The money hole – an article about the loan shark problem in Japan.
• Stop Loan Sharks – UK Gov. initiative to stop loan sharks

Tony Sirico
Born	Genaro Anthony Sirico, Jr. 1942 (age 69–70) Brooklyn, New York, United States
Occupation	Actor/Voice Actor
Years active	1970s—present

Genaro Anthony "Tony" Sirico, Jr. (born 1942) is an American character actor who is most famous for his role as Paulie Gualtieri in the television series The Sopranos.

Background and career[link]

Sirico was born in Midwood, Brooklyn. Sirico has played gangsters in a number of films, including Goodfellas, Mob Queen, Gangsters, Love and Money, Fingers, The One Man Jury, Defiance, The Last Fight, Innocent Blood, Bullets Over Broadway, The Pick-up Artist, Mighty Aphrodite, Gotti, Cop Land, Turn of Faith, and Mickey Blue Eyes. He also played policemen in the films Dead Presidents and Deconstructing Harry.^[1] Recently, he told the host of a Las Vegas radio show he would be playing the role of an ill-tempered high school football coach in an upcoming comedy for kids called Sports Heaven. He is currently set to star in the upcoming drama Zarra's Law, written and produced by Joseph Scarpinito for Scarpe Diem Productions.

Before turning to acting, Sirico was reportedly a fast-rising mob associate of the Colombo crime family, serving under Carmine "Junior" Persico, and had been arrested 28 times. There is a Sopranos reference to this fact when Paulie says, "I lived through the seventies by the skin of my nuts when the Colombos were goin' at it."^[2] In 1967, he was sent to prison for robbing a Brooklyn after-hours club, but was released after serving thirteen months. In 1971, he pled guilty to felony weapons possession and was sentenced to an "indeterminate" prison term of up to four years, of which Sirico ended up serving 20 months. In an interview in Cigar Aficionado magazine, Sirico said that during his imprisonment, he was visited by an acting troupe composed of ex-cons, which inspired him to give acting a try.^[3] According to a court transcript, at the time of his sentencing, he also had pending charges for drug possession.^[4] Sirico appeared in a 1989 documentary about life, The Big Bang by James Toback, in which he discussed his earlier life.

Sirico currently lives in Brooklyn, New York. His mother, who lived with Sirico, died in 2003. His brother, Robert Sirico, is a Catholic priest and co-founder of the free-market Acton Institute.^[5]

Politics[link]

Sirico and James Gandolfini visit with a member of the U.S. Air Force during a USO visit to Southwest Asia.

Sirico has stated that politically he is a "far-to-the-right Republican".^[6] He donated $1,200 to Rudolph Giuliani's presidential campaign.^[7]

Trivia[link]

Other acting work by Sirico[link]

Advertisements

• Starred in a commercial for one of Sweden's biggest papers "Aftonbladet", which was promoting The Sopranos.
• Starred in several commercials for Denny's, playing both a mobster and a police detective.
• Played a mafia boss in an early '90s Dunkin' Donuts commercial.
• Appeared in a commercial for Netflix in 2006 playing a mobster.
• Appeared in "Stacker-2 Muscle Builder" commercials featuring the superstars of World Wrestling Entertainment.

Films

• Bit players in Woody Allen movies.
• Small role in Goodfellas movie.

Games

• Voice used for his TV character in the video game The Sopranos: Road to Respect.

Music

• Played the lead role of a mob boss in the video "Slang Editorial" by Cappadonna of the Wu-Tang Clan. At the end of the video, Sirico's character is killed by Cappadonna.

Television

• Appeared in the Chuck episode "Chuck Versus the Fake Name", playing half of the mobster duo Matty and Scotty with fellow Sopranos actor Louis Lombardi.
• The voice for Wanda's father, Big Daddy (a mafia fairy), in the series The Fairly OddParents.
• Played in an episode of Miami Vice.
• Voice-over for a SpongeBob SquarePants episode.

Other

• Guest appearance as himself on the ESPN internet show Mayne Street, starring Kenny Mayne.

Parodies[link]

• Parodied in the recent television series, State of the Union, as a foul-mouthed actor, who is "expanding his range" after the success of The Sopranos' character.

[edit] In American Desperado

• In American Desperado: My Life--From Mafia Soldier to Cocaine Cowboy to Secret Government Asset, Jon Roberts shares with co-author Evan Wright Roberts' recollections of Anthony "Junior" Sirico, with whom Roberts became friendly when Sirico was a soldier for the mobster Fat Anthony and Roberts worked for the Gambino crime family. Roberts shares some of the criminal activities in which he and Sirico were involved, and Roberts' view of the events leading to Sirico's 1971 incarceration.

References[link]

External links[link]

• Tony Sirico at the Internet Movie Database