ST. PAUL, Minn. (Legal Newsline) -- Minnesota Attorney General Lori Swanson and Commerce Commissioner Mike Rothman filed a lawsuit Thursday against a California Internet lender that allegedly charged Minnesotans interest rates of up to 342 percent.

CashCall Inc., WS Funding LLC and WS Financial LLC allegedly used a fourth company, Western Sky Financial LLC, as a front company to fraudulently convince consumers that the loans were subject to tribal law instead of state law.

The defendants allegedly used this front to convince consumers the loans were not subject to state interest rate caps.

The lawsuit alleges that Western Sky falsely holds itself out to be a tribal entity purporting to be exempt from state consumer protection laws under the doctrine of tribal sovereign immunity.

Swanson and Rothman allege that Western Sky is not actually owned or operated by a tribe or for the benefit of a tribe.

The defendants allegedly offered loans to Minnesotans for between $850 and $10,000 at annual percentage rates of between 89.68 percent and 342.86 percent. Borrowers also were allegedly charged fees of between $75 and $500.

The lawsuit seeks consumer relief, civil penalties, a disgorgement of funds, and attorney and court costs.

Since 2010, at least nine other states and the Federal Trade Commission have taken similar action against the defendants or Western Sky.

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