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face amounts of the notes often exceeded the loan proceeds the
borrower received. Two of the "new" notes, both dated July 11,
1990, are promises to pay unpaid interest on earlier loans.
Petitioner and Mr. Aloi had worked together on some real
estate deals in prior years. During the course of their
relationship, petitioner made between 50 and 80 loans to Mr.
Aloi. Because of their previous dealings, when he made the loans
at issue here, petitioner did not receive a loan application from
Mr. Aloi, request a financial statement, require collateral, or
check the credit references of Mr. Aloi.
In November of 1991 petitioner filed against Mr. Aloi, in
the Circuit Court for Frederick County, Maryland, a Complaint for
Confession of Judgment for the face amount on notes including the
30 described above. Among other allegations in response, Mr.
Aloi alleged that the interest rate on some of the notes was
usurious. The court agreed that interest on some of the notes
was usurious, assessed monetary penalties against petitioner, and
in February of 1995 entered judgment against Mr. Aloi to the
extent of $474,140.38.
Since February 27, 1995, petitioner has received nominal
payments on the judgment he obtained against Mr. Aloi. On August
7, 1996, Mr. Aloi, petitioner, and Dr. Douglas Tavenner (another
judgment creditor of Mr. Aloi) executed an agreed payment
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