CHARLESTON, W.Va. -- A Kanawha County judge has penalized a California debt collection agency more than $13 million, along with a slew of other penalties, after finding that it used predatory lending practices on its West Virginia clients.Kanawha Chief Circuit Judge Duke Bloom released two orders Monday, finding that CashCall Inc., owned by J. Paul Reddam, used a federally regulated bank in South Dakota to bypass West Virginia lending laws and dupe consumers into paying skyrocketing interest rates on their loans.The judge also found that after CashCall essentially depleted borrowers' bank accounts with automatic payment withdrawals, the company's collection agents would start harassing them with dozens of phone calls a 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.Reddam owned the thoroughbred colt that won this year's Kentucky Derby and Preakness Stakes. The horse, I'll Have Another, retired in June with a tendon injury, missing its chance to win the Belmont Stakes and become the first Triple Crown champion in 34 years. In July, Reddam sold I'll Have Another to a Japanese farm for $10 million.National media outlets reported that along with his troubles in West Virginia, Reddam has faced legal action in California and Maryland for similar lending-law violations in those states.Bloom, according to his order, levied a penalty of at least $13 million on CashCall on claims that the company violated provisions of West Virginia consumer-protection laws. The attorney general's office will be required to put a large portion of the award into a trust fund, which will then be distributed among those affected by the company's lending practices.The attorney general's office said it is still deciphering the details of the orders and could not provide a breakdown of the massive award as of Monday evening.Bloom also ordered that CashCall cancel all existing debts that its West Virginia consumers still owe and pay court costs to the attorney general's office.The attorney general's office began investigating CashCall in 2007, after several people came forward with complaints about the company.The company, in response to an investigative subpoena, claimed that they could not be held liable for allegedly predatory lending practices because they were a "marketing agent" for a South Dakota bank that issued the loans in the first place. The bank is regulated by the FDIC and is immune from state consumer protection laws, the company claimed.The attorney general's office, however, said CashCall bought the bank's loans almost immediately after they were issued and that the lending program was "essentially a sham intended to make improper use of federal lending laws in order to unlawfully evade West Virginia laws," according to Bloom's order.After purchasing the loans from the bank, CashCall would then charge the consumer interest rates upwards of 96 percent, far above the maximum 18 percent under West Virginia consumer-protection laws.During a bench trial Bloom held last October, a Randolph County woman said that she borrowed $2,600 from CashCall and said she learned that her interest rate was 99 percent only after her loan was approved.The company automatically withdrew monthly interest payments from her bank account, which was quickly drained and saddled with hundreds of dollars in overdraft fees. Collection agents called her at all hours of the day when the account ran dry, seeking additional payments, she said.Bruce M. Jacobs, one of Reddam's lawyers, said Monday that the CashCall legal team was still reviewing Bloom's orders but added that the decision likely will be appealed."With all due respect to Judge Bloom, we believe the order is wrong and we believe we will prevail" on appeal, he said.Jacobs said he could not comment at this time on the specific arguments he intends to raise in the challenge.Reach Zac Taylor at Zachary.Taylor@wvgazette.com or 304-348-5189.