An Ohio construction company that borrowed $170,000 from World Business Lenders and quickly defaulted on the loan has accused the Elmsford business of usury.
Charles Johnson, who does business as Taggart Development, also accused World Business Lenders of violating the federal Fair Debt Collection Practices Act.
“This is an action to prevent …World Business Lenders and its affiliates from circumventing state usury laws,” according to the complaint filed on Jan. 21 in U.S. District Court, White Plains, “and destroying small business owners.”
World Business Lenders’ website  describes its service as providing “small business loans for BIG Business Growth!” It specializes in loans to small-to-medium sized businesses that lack access to traditional funding, and it secures the loans with real estate.
In 2020, Johnson was seeking a loan for both personal and business purposes, according to his complaint, and initially his dealings with World Business Lenders seemed ordinary, professional and legitimate.
He agreed to borrow $170,000 and to make daily and then weekly payments totaling $318,659 over a two-year period. The deal was secured by a mortgage on his house near Cleveland, Ohio.
Johnson says he guaranteed the loan without having an attorney review the documents.
Six months after making the deal he defaulted, and in 2021 World Business Lenders sued to foreclose on the mortgage. In 2022, Johnson settled the dispute by agreeing to pay $329,980. But Johnson claims that World Business Lenders did not return a signed copy of the agreement and instead went ahead with the foreclosure on his home mortgage.
A second settlement was agreed to in 2023, according to the complaint, but it “proved burdensome” and World Business Lenders threatened again to foreclose on the mortgage.
Johnson says World Business Lenders claims entitlement to $390,564 in excess of the original $170,000 loan, in principal payments, interest, and various fees. He says the annual interest rate exceeds New York’s criminal usury rate of 25%.
Johnson accused World Business Lenders of fraudulently inducing the loan by mischaracterizing the terms; unjust enrichment; deceptive business practices under New York law; and violating the federal Fair Debt Collection Practices Act.
The lawsuit was filed originally in Westchester Supreme Court and moved to federal court at the behest of World Business Lenders.
World Business Lenders’ attorney, Daniel A. Schleifstein, did not reply to a message asking for his client’s side of the story.
