MyPillow CEO Mike Lindell files new RICO lawsuit over loans

Mike Lindell gives a thumbs up as he passes a rally for supporters of former President Donald Trump on Tuesday, April 4, 2023, in West Palm Beach, Fla. (AP Photo/Wilfredo Lee).

Mike Lindell, CEO of MyPillow, alerts another lender that the terms of a recent loan made to his bedding company were “usurious, unreasonable and therefore unenforceable.”

Last week in Carver County District Court, the pro-Donald Trump election denier sued named and unnamed defendants over a triple-digit interest rate on a $1.559 million loan taken out in September.

Daily payments for the balance amount to more than $45,000 per day, the lawsuit says. The total amount to be repaid is over $2.261 million.

The 34-page lawsuit, filed Dec. 2, is an almost exact replica of a lawsuit filed in late October that made similar allegations. Both lawsuits accuse lending companies of making loans at “exorbitant interest rates.” Both lawsuits are stylized as racketeering (RICO) complaints.

As with the previous lawsuit, Lindell uses the complaint to broadly criticize the entire industry and business model of cash advance companies, calling them “predatory” lending companies that aim to “operate in the gray areas of the law.” hide”.

In this case, Lindell and MyPillow are suing Cobalt Funding Solutions, a New York City-based cash advance company.

Once again, Lindell and the numerous legal entities that jointly sued the lender — along with an affiliated broker, investors and employees — say the loan was not only usurious, but also hidden under the promise of an entirely different transaction.

“Although the terms of the agreement are framed as a purchase of future receivables, as well as defendants’ actions since then, they show that, despite the disclaimers in the agreement and the warranty therein, no actual sale of receipts ever took place, and.” “The form agreement is merely a deception intended to circumvent current usury law,” the lawsuit says. “Cobalt never purchased My Pillow’s receivables under the agreement in good faith and the transaction is in fact a usurious loan.”

The agreement was entered into this way, the lawsuit says, to avoid New York State’s statutory maximum interest rate.

“Despite the many alleged misrepresentations and contractual terms to the contrary, the financial arrangement between Cobalt and My Pillow is a loan and not a merchant cash advance,” the lawsuit states.

The plaintiffs say the effective interest rate on the “loan” is 409.1% – with “even more hidden interest” when the $124,760 “origination fee” is included in the loan calculation.

More Law&Crime coverage: Mike Lindell-affiliated Election Crime Bureau reportedly referred to FBI over “misleading emails to election officials.”

All of this together, Lindell says, amounts to a conspiracy that violates federal law – particularly the federal RICO law.

“Plaintiffs have now learned that the agreement with Cobalt was made based on defendants’ concerted misconduct and fraudulent statements, that the entire nature of the transaction was misrepresented, that the loan was usurious, unreasonable and therefore unenforceable and that “The defendants coordinated misconduct violates RICO,” the lawsuit continues.

As for the so-called “predicate acts” required to support a RICO claim, the lawsuit alleges two things: that the defendants made the usurious loan and committed wire fraud in the process.

“The disclosures that defendants made about the loan are clearly fraudulent (e.g., the representation in the agreement that this agreement is not a loan),” the lawsuit continues. “Each defendant agreed to facilitate, direct, and participate in the management, management, or operation of the Company’s business in order to commit wire fraud through a pattern of racketeering activities.”

With the lawsuit, Lindell seeks a court order declaring its agreement with the lenders “unconscionable and unlawful,” usury under New York law, “and therefore void and unenforceable,” and declaring the lenders in violation of the federal RICO law . The motion also seeks various damages – compensatory damages, direct damages and consequential damages – and a tripling of those damages. The lawsuit also seeks interest and attorney fees.

Law&Crime reached out to the primary lender named in the lawsuit but did not receive an immediate response at the time of publication.

The interest rate dispute is one of many economic problems currently facing Chaska, Minn.-based MyPillow and its founder.

Lindell and his company have been accused of defaulting on their debts, an apparent result of Lindell personally and vocally claiming that certain conspiracies cost Trump the 2020 election.

In a lengthy legal battle, Lindell Management LLC was repeatedly reprimanded by the courts for refusing to pay the winner of a “prove Mike is wrong” challenge.

In this disastrous contest, engineer Robert Zeidman – himself a Trump supporter – took up the metaphorical gauntlet thrown at him by the former QVC star. Despite strong doubts about his own abilities, Zeidman prevailed against Lindell by making false claims about election data.

In March, a Minnesota District judge ruled against MyPillow in an eviction hearing, finding that the company owed more than $200,000 in unpaid rent on a warehouse in Shakopee.

In October 2023, Lindell confirmed that MyPillow had been “decimated” by defamation lawsuits filed by Dominion Voting Systems and Smartmatic against several pro-Trump figures who insisted that the voting machine companies had orchestrated a conspiracy to swing the 2020 election to President Joe to hand over to Biden. Lindell said his company had “lost hundreds of millions of dollars” by being such a voice.

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MyPillow CEO Mike Lindell files new RICO lawsuit over loans

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