ChristendomJudicial reformPersecutions

Cheadle law firm collects debts across TN, violating usury laws, defrauding courts

Mary Cheadle of Cheadle Law in Nashville pursues debtors for loan sharks such as Flexibility Capital, as here in Hamilton County circuit court. (Photo David Tulis)

CHATTANOOGA, John and Mary Cheadle of the Cheadle Law on Crestmoor Road in Nashville are in violation of ethics rules by being debt collectors for New York loan sharks such as Flexibility Capital.

By David Tulis / NoogaRadio Network

They are in violation of state and New York usury laws and Tennessee supreme court rules forbidding to lawyers assist clients involved in crime.

[This complaint filed Dec. 14, 2022, and rejected in two days by the Board of Professional Responsibility at 10 Cadillac Drive, Suite 220, in Brentwood, Tenn.,shows how lawyers use legal process to commit crimes against the public in service of their clients — clients such as loan sharks and erstwhile “business lenders” in New York. The debts she attempts to collect have interest rates as high as 208 percent, in violation of Tennessee law. — DJT]

Complainant has first-hand insight into the Cheadle practice in a case in Hamilton County circuit court, Div. 4, Flexibility Capital Inc. vs. Sabatino Cupelli and David Tulis, case no. 22C429.

State laws

TENNESSEE LAW. Tennessee recognizes purchases in advance of business receivables. ““Account purchase transaction” means an agreement under which a commercial entity sells accounts, instruments, documents, or chattel paper to another commercial entity subject to a discount or fee *** ” Tenn. Code Ann. § 47-14-102.

Tennessee bans interest in many types of loans beyond 10 percent per year § 47-14-103. Maximum rates. The law provides a defense against suit such as this one. “(a) A defendant sued for money may avoid the excess over lawful interest by pleading usury, setting forth the amount of such excess. (b) In order to sustain a defense of usury, the burden is on the party claiming usury” Tenn. Code Ann. § 47-14-110. 

Willful usury is a Class A misdemeanor. T.C.A. § 47-14-112.

To constitute usury, there must be a requirement that the money loaned be repayable absolutely;  if it is payable only upon some contingency, the transaction is not usurious. Lake Hiwassee Development Co., Inc. v. Pioneer Bank, 1976, 535 S.W.2d 323. Usury imports the existence of four elements: (1) A loan or forbearance, either express or implied; (2) an understanding between the parties that the principal shall be repayable absolutely; (3) the exaction of a greater profit than allowed by law; and (4) an intention to violate the law. Jenkins v. Dugger, 96 F.2d 727, 729 (6th Cir. 1938).

NEW YORK LAW.  New York law prohibits usury past 25 percent per year in two laws. First-degree usury is an act by someone with a criminal record. Second degree criminal usury lacks the criminal record element, and is as follows:

A person is guilty of criminal usury in the second degree when, not being authorized or permitted by law to do so, he knowingly charges, takes or receives any money or other property as interest on the loan or forbearance of any money or other property, at a rate exceeding twenty-five per centum per annum or the equivalent rate for a longer or shorter period.

Criminal usury in the second degree is a class E felony.

N.Y. Penal Law § 190.40 (McKinney)

Crime of criminal usury in the second degree requires proof only that defendant charged or received money or other property as interest on a usurious loan. McKinney’s Penal Law § 190.40. *** Finding that defendant received interest on usurious loan as part of a scheme or business of making or collecting usurious loans was supported by evidence that he made a loan of $2,000 for which he required interest payments at the rate of $100 per week, that he later twice renegotiated the loan, requiring interest at effective annual rates of 109.2% and 145.6%, and that he directly participated in collection efforts on two of the loans.

People v. Valentzas, 70 N.Y.2d 446, 517 N.E.2d 198 (1987)

Fraud on the court

Lawyers are barred from participating in fraud on the court. Fraud on the court is a grievous matter involving attorneys and judges. The standard is set forth in Demjanjuk v. Petrovsky, 10 F.3d 338, 348 (6th Cir. 1993), with  

[T]he elements of fraud upon the court ***  consisting of conduct:

  • 1. On the part of an officer of the court;
  • 2. That is directed to the “judicial machinery” itself;
  • 3. That is intentionally false, wilfully blind to the truth, or is in reckless disregard for the truth;
  • 4. That is a positive averment or is concealment when one is under a duty to disclose;
  • 5. That deceives the court.

The 10th Circuit defines fraud on the court as “‘Fraud on the court’ other than fraud as to jurisdiction, is fraud which is directed to judicial machinery itself and is not fraud between parties or fraudulent documents, false statements or perjury; it is thus fraud where court or member is corrupted or influenced or influence is attempted or where judge has not performed his judicial function so that impartial functions of court have been directly corrupted” Bulloch v. United States, 763 F.2d 1115 (10th Cir. 1985). “[F]raud upon the court has been found usually involved ‘ “the most egregious conduct involving a corruption of the judicial process itself.”’ *** In Livingston v. Livingston, 572 P.2d 79, 82 (Alaska 1977), we recognized that relief is not appropriate in cases in which the wrong ‘“was only between the parties in the case and involved no direct assault on the integrity of the judicial process. Nondisclosure by a party or his attorney has not been enough.”’” O’Link v. O’Link, 632 P.2d 225, 230 (Alaska 1981).

Fraud is defined as “[a]nything calculated to deceive, whether by a single act or combination, or by suppression of truth, or suggestion of what is false, whether it be by direct falsehood or innuendo, by speech or silence, word of mouth, or look or gesture.” Delahany v. First Pennsylvania Bank, N.A., 318 PaSupper. 90, 464 A.2d 1243, 1251. Black’s Law Dictionary, 6th Ed., p. 660.

Fraud by definition: “It is something said, done, or omitted by a person with the design of perpetrating what he knows to be a cheat or deception.” Black’s Law Dictionary, 6th Ed., p. 661. 

Actual fraud is an intentional and knowing misrepresentation of the truth or intentional and knowing concealment of a known fact (committed with actual knowledge) that constitutes common law fraud.

Attorney ethics rules

Lawyers are bound by Rule 8. 

➤ “A lawyer is an expert in law pursuing a learned art in service to clients and in the spirit of public service and engaging in these pursuits as part of a common calling to promote justice and public good.”

➤ He is “a public citizen having special responsibility for the quality of justice.”

➤ “In all professional functions a lawyer should be competent, prompt, and diligent.” 

➤ His “conduct should conform to the requirements of the law.” 

➤ He should “use the law’s procedures only for legitimate purposes and not to harass or intimidate others.”

The rules say, “As a member of a learned profession, a lawyer should cultivate knowledge of the law beyond its use for clients, employ that knowledge in reform of the law, and work to strengthen legal education.” 

➤ A lawyer must “further the public’s understanding of and confidence in the rule of law and the justice system because legal institutions in a constitutional democracy depend on popular participation and support to maintain their authority.

➤ Should be “also guided by personal conscience and the approbation of professional peers.”

The rules have limits. “Compliance with the Rules, as with all law in an open society, depends primarily upon understanding and voluntary compliance, secondarily upon reinforcement by peer and public opinion and finally, when necessary, upon enforcement through disciplinary proceedings. The Rules do not, however, exhaust the moral and ethical considerations that should inform a lawyer, for no worthwhile human activity can be completely defined by legal rules.”

A Tennessee lawyer cannot assist in crime under Rule 1.2(d):

A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows or reasonably should know is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning, or application of the law. 

A commentary explains that the above graph:

prohibits a lawyer from counseling or assisting a client to engage in conduct that the lawyer knows or reasonably should know is criminal or fraudulent. This prohibition, however, does not preclude the lawyer from giving an honest opinion about the actual consequences that appear likely to result from a client’s conduct. Nor does the fact that a client uses advice in a course of action that is criminal or fraudulent of itself make a lawyer a party to the course of action. There is a critical distinction between presenting an analysis of legal aspects of questionable conduct and recommending the means by which a crime or fraud might be committed with impunity.

Rule 8.4 prohibits misconduct.

  • (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another;
  • (b) commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects;
  • (c) engage in conduct involving dishonesty, fraud, deceit, or misrepresentation;
  • (d) engage in conduct that is prejudicial to the administration of justice;
  • (e) state or imply an ability to influence a tribunal or a governmental agency or official on grounds unrelated to the merits of, or the procedures governing, the matter under consideration;
  • (f) knowingly assist a judge or judicial officer in conduct that is a violation of applicable rules of judicial conduct or other law; or
  • (g) knowingly fail to comply with a final court order entered in a proceeding in which the lawyer is a party, unless the lawyer is unable to comply with the order or is seeking in good faith to determine the validity, scope, meaning, or application of the law upon which the order is based.

Rule 10 prohibits fraud and economic crimes for gain.

(d) “Fraud” or “fraudulent” denotes an intentionally false or misleading statement of material fact, an intentional omission from a statement of fact of such additional information as would be necessary to make the statements made not materially misleading, and such other conduct by a person intended to deceive a person or tribunal with respect to a material issue in a proceeding or other matter.

Cheadle breaches review

Mary Cheadle is the principle attorney in the above-styled case, and is not enforcing a case that is about an advance purchase of future receivables, but a usurious loan. Her client, Flexibility Capital, admits in court filings under Cheadle’s care that the funds in dispute are a loan. 

Plaintiff admissions are as follows:

  1. “6. On February 6, 2020,  Sabatino Cupelli and David Jonathan Tulis, d/b/a Hot News Talk Radio, executed a future receivables sale and purchase agreement with Flexibility Capital. 7. Flexibility Capital loaned Sabatino Cupelli and David Jonathan Tulis, d/b/a Hot News Talk Radio, money.” 

Affidavit of Gina Monteforte, president of Flexibility Capital (emphasis added)

  1. “Defendants borrowed money from plaintiff and failed to pay as promised. This is a straight-forward collection case to recover the balance due on a loan.”

Plaintiff’s motion for summary judgment (emphasis added)

  1. “Plaintiff loaned defendants money. Defendants failed to pay the money back.                  

Plaintiff’s motion for summary judgment (emphasis added)

  1. “Plaintiff loaned defendants money.” 

Plaintiff’s brief in support of summary judgment (emphasis added)

  1. “Defendants executed the agreement. Plaintiff loaned defendants money.” 

Plaintiff’s brief in support of summary judgment (emphasis added)

  1. “Plaintiff loan[s] defendants money. Defendants failed to pay as promised. A balance remains due. There remains no genuine issue as to any material fact, and plaintiff is entitled to a judgment as a matter of 1aw.”

Plaintiff’s brief in support of summary judgment (emphasis added)

The president of Flexibility Gina Monteforte and debt collectors Mary Cheadle et al describe the transaction in terms of lending money.

These admissions stewarded by Cheadle Law, and the persistent prosecution of the case against complainant, show that the activity of the Cheadles in breach of the rules are knowing and intentional. The above statements in the record are, effectively, statements against interest, and are peculiarly damning.

The contract disputed in this case admits itself into the world of loans for money by having a personal guaranty section of the agreement that makes the funds repayable absolutely.

c. Buyer is not willing to enter into the Agreement unless Guarantor irrevocably, absolutely and unconditionally guarantees prompt and complete performance to Buyer of all the obligations of Merchant under the Agreement (collectively, “the Obligations”). 

(Contract, p. 11)

As an inducement to take risk, Flexibility requires the merchants to make absolute guarantee of repayment of the full amount to Flexibility.

2. Guaranty of Obligations. Guarantor hereby irrevocably, absolutely and unconditionally guarantees to Buyer prompt, full, faithful and complete performance and observance of all Merchant’s Obligations; and Guarantor unconditionally covenants to Buyer that if default or breach shall at any time be made by Merchant in the Obligations, Guarantor shall well and truly pay or perform (or cause to be paid or performed) the Obligations and pay all damages and other amounts stipulated in the Agreement with respect to the nonperformance of the Obligations, or any of them. 

(Contract p. 11) (emphasis added)

The exchange for the purchased amount (of receivables) is “payment for an adequate consideration and is not intended to be treated as a loan or financial accommodation from Buyer to Merchant.” To cover its actions, plaintiff wins defendants’ “[acknowledgment]” that Flexibility is “not a lender, bank or credit card processor, and that Buyer has not offered any loans to Merchant, and Guarantor waives any claims or defenses of usury in any action arising out of this Guaranty” (p. 12, ¶ 5).

The “personal guaranty of performance” is on the face of the 14-page contract at pp. 11-13, its page numbers included on front-facing pages. This guarantee on the face of the contract — and not apart from it — makes the money absolutely repayable.

Accused remind the court that no one at Flexibility signed the contract, indicating a failure to have a meeting of the minds among the parties or a desire on the part of Flexibility staff to avoid personal responsibility for violating New York’s usury ban.


It has taken a good length of time for complainant to realize that the lawsuit against him to collect a debt is illegal. Usury is not presumed, but, on the contrary, there is a strong presumption against the finding of usury and in favor of legality of the transaction. Where usury is not determined by the court on the face of the instrument, it is determinable as a matter of law.

Complainant agreed to waive a future claim of usury. The parties agreeing to waive a future claim of usury in the contract in no way makes the contract enforceable in Tennessee or in New York, the laws of which latter state control, contract p. 9, ¶ 37; also personal guaranty, p. 11, ¶ 6. That is because usury is a misdemeanor in Tennessee, regardless of consent to an unconscionable contract.

Complainant raised the usury defense in court in a Nov. 17, 2022, filing, under affidavit. “Consent or cooperation of one paying usurious interest is immaterial; thus, fact that corporate borrower executed written waiver of defense of usury at time promissory note was signed did not preclude corporate borrower from raising defense of usury in action to recover on promissory note. T.C.A. §§ 47–14–104, 47–14–112, 48–402; Const. art. 11, § 7.” Aztec Properties, Inc. v. Union Planters Nat. Bank of Memphis, 530 S.W.2d 756 (Tenn. 1975).

The funds in the Flexibility contract are repayable absolutely under terms of the contract’s personal guaranty provisions, pp. 11-13. 

Complainant, a journalist in the radio business formerly at Hot News Talk Radio, received $16,320 in a loan. The agreement requires it to pay $164.22 every weekday. The balance due at the beginning of the arrangement is $24,140, or $7,820 more than the money extended. It takes 147 weekdays to pay off the loan, or 29.4 weeks, slightly more than half a year. 

The rate of interest is 208 percent per annum. 

In business, receivables vary widely day to day. The contract says the payments are an advance purchase of future receivables. But Flexibility’s payment schedule is the same number of dollars every weekday, as if there were no connection between receivables and repayment. Repayment is fixed daily upon a loan of money, as admitted in the finding of material fact.


Flexibility and attorneys John and Mary Cheadle are suing to enforce a contract they call a loan for money that puts the entire action under the shadow of Tennessee’s usury ban. They have acted deceitfully and fraudulently upon complainant and on many other people in state of Tennessee. They have failed to be candid with circuit court judge Kyle Hedrick as to their activities. At one recent email exchange regarding scheduling in my case, Mary Cheadle said she had a commitment of 55 cases in Knox County.

The Cheadle practice acts deceitfully and dishonestly upon the courtz as officers of the court, and induces the court to perform injustice against complainant/defendant, in violation of state law and Rule 8.

Their actions serving New York small business funders are not unintentional, accidental or coincidence. They knowingly and intentionally commit fraud on the court, harm against complainant and his person and business, and in breach of their covenant with Tennessee supreme court to pursue justice and the rule of law.

If the board has further questions, or needs further evidence from my record, complainant is happy to cooperate. 

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