Scott Tucker convicted of running illegal payday loan business


Scott Tucker (above), a professional racing car driver and payday lender, and his lawyer Tim Muir were convicted on Friday in New York on 14 felony charges relating to their illegal payday <a class=loan operation.” title=”Scott Tucker (above), a professional racing car driver and payday lender, and his lawyer Tim Muir were convicted on Friday in New York on 14 felony charges relating to their illegal payday loan operation.” loading=”lazy”/>

Scott Tucker (above), a professional racing car driver and payday lender, and his lawyer Tim Muir were convicted on Friday in New York on 14 felony charges relating to their illegal payday loan operation.

Photo file

Leawood businessman Scott Tucker was convicted on Friday of 14 criminal charges against him in connection with a $ 2 billion payday loan business that authorities said operated 4.5 million dollars. consumers with predatory interest rates and deceptive loan terms.

Timothy Muir, an Overland Park lawyer who had been legal counsel to Tucker’s payday loan companies, was also convicted.

The two men stood on trial for about a month in Manhattan, New York, where they were indicted in 2016. The case went to the jury after oral argument Thursday and a unanimous verdict on all counts, including the racketeering charges, was handed down on Friday evening.

Tucker and Muir both face lengthy prison terms when sentenced by U.S. District Court Judge Kevin Castel on January 5. Castel ordered the two men to stay at home with electronic surveillance until their conviction.

Joon Kim, the acting US attorney for the Southern District of New York, said Tucker and Muir had targeted “struggling ordinary Americans” with illegal loans that carried interest rates up to 700%.

Such interest rates are illegal in states that regulate payday lending, but Tucker and Muir have been accused of setting up their operations nominally on Native American tribal lands in Nebraska and Oklahoma in an attempt to circumvent them. interest rate limits. Native American tribes are generally unaffected by state regulations, and there are no federal usury laws on payday loan interest rates.

“Tucker and Muir sought to escape their crimes by claiming that this $ 2 billion business was in fact owned and operated by Native American tribes,” Kim said in a written statement. “But that was a lie. The jury pierced Tucker and Muir’s lies and saw their business for what it was: an illegal, predatory scheme to unduly profit from vulnerable workers living on paychecks to paychecks. the other.

Their online payday loan businesses operated under brands such as Ameriloan, Cash Advance, One Click Cash, United Cash Loans, and 500 FastCash. In addition to the high interest rates, authorities said consumers were fooled by loan terms through renewals and fees. Prosecutors said a loan of $ 500 could result in debt of $ 1,925 for a borrower.

James Roth, a New York attorney who represented Tucker, suggested his client could appeal.

“This was a new lawsuit and the trial record provides fertile ground for a successful appeal,” Roth said in an email to The Star.

Muir said he was disappointed with the jury’s verdict, but added he had to respect the jury’s verdict.

“Right now all I can think of is my wife and daughters and trying to figure out how to tell them about the verdict and what it means for their future,” Muir said in an email to Star. “It’s too early for me to think about a call. My only concern at the moment is the impact of this on my family. “

Tucker and Muir had claimed that the payday loan businesses were legitimate and that their Native American tribal partners were, in fact, the owners of the businesses. They also said that the outside lawyers they hired determined that their payday operation was legally sound and that they were running their business in good faith, based on that advice.

Federal prosecutors, however, had evidence that showed Native American tribes had little to do with the payday lending industry, and that it was largely run from an office tower in Overland Park that employed to at one time more than 600 workers.

As an example of the deception in Tucker’s cases, prosecutors showed the jury evidence that workers at Overland Park were receiving daily weather reports from tribal lands in Nebraska and Oklahoma, so employees could give the impression to borrowers that they were, in fact, doing business from tribal property.

They also presented evidence that the pair engaged in legal gymnastics in an attempt to keep regulators at bay. One such example is what prosecutors called a “mock lawsuit” that Tucker filed against one of his own businesses in Wyandotte County in 2010, previously reported by The Star, which put the deal in the name. of a tribe, at least on paper.

Tucker’s payday loan companies amassed him a great fortune. Prosecutors pointed to Tucker’s lavish lifestyle, which included a $ 1.3 million Ferrari he bought with money he earned from payday loans. He also bought an $ 8 million home in Aspen in addition to his 4,400 square foot and $ 1.8 million home in Leawood, backing onto the Hallbrook Country Club.

Prosecutors said Tucker made $ 380 million from his illegal ventures.

When Tucker was indicted, federal prosecutors announced they would seek confiscation of Tucker’s property, including the Aspen house, six Ferrari race cars, four Porsches and a private Learjet plane.

Friday’s conviction could mean at least 20 years in prison for Tucker, who is 55.

Tucker’s conviction somewhat marks the end of his long-standing business in payday lending, which for at least 12 years had been under scrutiny by federal and state authorities.

Tucker, who was born in Kansas City and attended both Rockhurst High School and later Kansas State University, spent a year in jail at Leavenworth after a fraud conviction in 1991.

He started a consumer credit business in 1997 and would go on to become one of the pioneers of online payday lending. For years, Tucker’s involvement in payday loans has been hidden behind shell companies and tribal entities.

Rather, Tucker would become known for his exploits in professional auto racing, which he financed with the fortune he earned in payday loans. Tucker has driven Ferraris and other premium sports cars in competitions in North America, Europe and the Middle East.

Tucker’s legal troubles began at least in 2005, when the Colorado attorney general sought to subpoena the files of one of his business entities. Tucker and Muir tried to delay the investigation, but Colorado authorities ultimately prevailed.

Still, Tucker’s name would not be publicly linked to payday loans until reports released in 2011 by the Center for Public Integrity, The Star, and others highlight his involvement in the business.

A Federal Trade Commission lawsuit would follow in 2012. This case was ultimately ruled in favor of the FTC in 2016 when a judge determined that Tucker and his related payday loan companies owed the government $ 1.3 billion. . It was the biggest penalty the FTC has ever won through litigation.

Tucker is appealing this decision to the United States Court of Appeals.

Tucker grew up with two brothers. One of them, Blaine Tucker, was involved in Tucker’s payday loan business. Blaine Tucker committed suicide in Leawood in 2014.

Tucker’s other brother, Joel Tucker, was recently fined $ 4 million following a case the Federal Trade Commission filed against him last year. The FTC claimed that Joel Tucker was selling fake payday loan portfolios to debt collectors. This has led to consumers receiving phone calls from debt collectors for debts they did not actually owe.

The FTC had accused Joel Tucker of using the brand names of his brother Scott Tucker’s payday loan business as a way to convince debt buyers that the wallets were legitimate.

Another accused in the Tucker and Muir case, Crystal Grote, had pleaded guilty in August to one count of lying to federal regulators during a separate investigation. Grote, previously an employee of the Tucker company, had admitted to giving misleading information during the FTC case.


About Author

Leave A Reply