NEW YORK (AP) - -
New York prosecutors say a Tennessee man founded a network of payday loan companies that charged interest rates that soared over state limits.
Carey Vaughn Brown of Ooltewah, Tennessee, pleaded not guilty Tuesday to usury and conspiracy charges.
Payday loans are small, short-term cash advances against a borrower's paycheck. Lenders say they can help people cover unexpected expenses. But they've gotten regulators' scrutiny because debt can accrue rapidly if borrowers extend their loans.
Under New York law, unlicensed lenders can't charge more than 25 percent-per-year interest on any loan under $2.5 million. Manhattan District Attorney Cyrus Vance Jr. says Brown's companies charged interest rates as high as 800 percent, if annualized.
Chief operating officer Ronald Beaver pleaded not guilty Monday. A legal adviser is awaiting arraignment.
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