The owner of Condor Capital, a Hauppauge subprime auto lender accused of bilking thousands of customers, has agreed to pay a $3 million fine and liquidate his company as part of a deal to settle civil charges with state regulators.
The agreement, filed Friday in federal court in Manhattan, calls for Condor owner Stephen Baron to surrender his license and repay an estimated $8 million to $9 million that regulators say he pocketed from customers who accidentally overpaid their loans to the company. It also calls for him to admit to breaking state and federal law.
"We will not tolerate companies that abuse New Yorkers and other customers -- particularly vulnerable subprime borrowers who can least afford it," said Benjamin M. Lawsky, superintendent of the state Department of Financial Services.
A lawyer for Baron did not immediately respond for a request for comment.
The deal comes eight months after Financial Services invoked a provision of the Dodd-Frank Act to file civil charges against Condor, which specialized in high-interest loans to low-income borrowers with poor credit history.
The suit prompted Judge Colleen McMahon to suspend Baron from running the company and appoint a receiver in his place.
Condor, which employed 52 people as of last month, was founded in 1996. Regulators say the company pocketed overpayments from roughly 39,000 people. For example, borrowers sometimes paid Condor more than they owed when trading in a vehicle or receiving insurance settlements, or they wrote too big a check for a final payment.
Instead of issuing refunds, Condor closed borrowers' online accounts, leaving them unable to see whether they were owed money, authorities said.
As of last month, Baron had repaid roughly $5.6 million of the $8 million to $9 million he owed.