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MADISON — Attorney General J.B. Van Hollen has announced that the Wisconsin Department of Justice has filed a civil forfeiture action against Nicholas S. Wallace, the owner and operator of All Star Tax Service, a recently opened tax preparation business in Milwaukee located at 4935 West Center Street. The case was referred to the Department of Justice by the Wisconsin Department of Financial Institutions (DFI) and the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP).
The state’s complaint, filed today in Milwaukee County Circuit Court, alleges that Wallace has violated numerous Wisconsin lending and consumer protection laws, including operating an unlicensed consumer lending business; failing to provide proper documentation and disclosures relating to the loans; and making misrepresentations to consumers through advertisements and in-person.
According to the complaint, Wallace opened All Star Tax Service earlier this month, and solicited customers by advertising loans through a “Helping Hand Loan Program.” A number of consumers were led to believe that the loans being offered were interest-free, when in fact Wallace was charging interest or a finance charge of 50%, to be repaid from the borrower’s income tax refund. Because some borrowers could receive refunds two months after the loan was made, at this rate the annualized interest rate or finance charge would be approximately 300%. Wallace, according to the complaint, did not obtain a license from DFI that is required to engage in consumer lending; nor did he comply with the disclosure requirements applicable to consumer loans.
The complaint also alleges that Wallace made misrepresentations to consumers, including leading consumers to believe they could obtain interest-free loans, that the loans were being offered through a bank and that All Star has business affiliations with various banks, and that All Star could provide education income tax credits of up to $4000. The state seeks forfeitures and injunctive relief prohibiting the continuation of illegal practices.
The State of Wisconsin is represented in this matter by Assistant Attorney General John Greene. The complaint contains only the State’s allegations. The State bears the burden of proving the allegations.
Copies of the Summons and Complaint are available at the following links: