A judge in West Virginia levied a $13 million penalty against CashCall Inc., a California-based collection agency, owned by J. Paul Reddam, after finding it used predatory lending practices against its clients in the state.

Reddam owned the horse, I'll Have Another, that won this year's Kentucky Derby and Preakness Stakes.

Kanawha County Chief Circuit Judge Duke Bloom, in orders released Monday, found that CashCall used a federally regulated bank in South Dakota to bypass West Virginia lending laws and dupe consumers into paying soaring interest rates on loans.

Bloom also found that after CashCall depleted borrowers' bank accounts with automatic payment withdrawals, its collectors would begin calling them dozens of times per day. Investigators in the West Virginia attorney general's office said that some consumers received as many as 1,000 phone calls during one collection campaign.

Bloom ordered that CashCall cancel all existing debts that its West Virginia consumers still owe and pay court costs to the West Virginia attorney general's office. The attorney general's office will be required to put a large portion of the $13 million penalty into a trust fund, which will then be distributed among those affected by the company's lending practices.

The attorney general's office began investigating CashCall in 2007, after several individuals came forward with complaints about the company. The attorney general's office said it is still reviewing the details of the judge's orders and could not offer a breakdown of the penalty as of Tuesday morning.

Reddam, meanwhile, retired I'll Have Another after a tendon injury prevented the horse from entering the Belmont Stakes and a chance to become the first Triple Crown champion in 34 years. Reddam then sold the horse to a Japanese farm for $10 million.

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