He Was Exonerated but Penniless. There Was One Solution

A look at the finance firms who lend to exonerees at sky-high interest rates
By Kate Seamons,  Newser Staff
Posted Dec 4, 2022 8:30 AM CST
He Was Exonerated but Penniless. There Was One Solution
   (Getty Images / MarianVejcik)

It's an unexpected subset of people to monetize: exonerated former inmates who are hoping to be compensated for the injustice they suffered. But as Corey Kilgannon reports for the New York Times, companies have in recent years begun doing that very thing, offering exonerees hefty advances at staggering interest rates that can hit as high as 33%. It can take years for a wrongful conviction case to be settled, meaning an exoneree can easily end up owing double the amount loaned. The more attractive part of the deal is that the advances are typically forgiven if the exoneree isn't awarded money. But as the president of USClaims—an advance-giving company backed by private equity investors—explains, these are pretty safe bets.

That's because wrongful conviction cases have already been subjected to "years of appellate court scrutiny and have been vetted by the lawyers handling the claims," Kilgannon writes. There are, unsurprisingly, critics who see these lenders as profiting off the "economic desperation" of victims. Desperation is what Felipe Rodriguez felt. He didn't commit the 1987 murder he spent 27 years in prison for, and when he left prison in 2017 he had no money or credit. But he did have an offer from USClaims and took it, borrowing $380,000.

With interest, he paid off $590,000 after settling his claim with New York state for $5 million. He's satisfied. "I needed a service and they provided it. Most people aren’t willing to take a chance on any of us." But another exoneree whose settlement payments tallied nearly $12 million told Bloomberg Law earlier this year his own advance didn't sit as well with him. He borrowed $215,000 and repaid nearly twice that (he declined to name the firm). "I felt taken advantage of," exoneree Fernando Bermudez said. "I just felt exploited." (More exoneration stories.)

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