Any offer of money or anything else you find on-line, assume is fraudulent until proven otherwise.
Whether or not it is legal, I don't know, since I don't know that law - which is presumably a US law. However, if you want to know if it IS legal...talk to a lawyer (most will give free consults). However, $21 interest on a $1000 loan does seem pretty decent. But, since you have to send him the $21 before he cuts you a cheque for $1000, he would likely be scamming you. There is a reason why the banking industry in most countries are so strongly regulated.
In any case...if he is legit, make sure you have some iron clad paper in your favour in case he tries to screw you over.