Payday Loan Mogul Trades Ferrari-Racing Life for Prison Term

Scott Tucker says he’s a pioneering self-made man who, without a college degree, founded successful businesses in a variety of fields and contributed billions of dollars to the U.S. economy. Prosecutors say he’s a greedy fraud who preyed on the poor.

A payday loan mogul who is better-known as a racecar driver on U.S. and European circuits, Tucker enjoyed a luxurious lifestyle, including a private jet, a vacation home in Aspen, Colorado, and a fleet of Ferraris. It’s been a long time since the 55-year-old resident of Overland Park, Kansas, was short of cash.

The same couldn’t be said of his former customers. Millions of Americans across the U.S. who couldn’t get loans from regular banks flocked to Tucker’s businesses, where they were sometimes charged interest rates exceeding 600 percent for small loans they needed to make ends meet, according to the U.S.

U.S. District Judge Kevin Castel in Manhattan on Friday sentenced Tucker to 16 years and 9 months in prison.

“What I see here is a scheme to extract money from people in desperate circumstances,” Castel said before the sentence was handed down. He ordered Tucker jailed immediately.

Tucker was convicted in October with jurors finding him guilty of collecting unlawful debts, using misleading contracts and falsely stating that his businesses were owned and operated by Native American tribes. That bogus claim helped him get around state laws that prohibited his business practices, the U.S. said. From 2008 to 2012, he victimized 4.65 million people, according to prosecutors, collecting $1.3 billion in illegal interest payments as some people paid a total of almost $1,000 to settle $300 loans.

Race Car Driver Scott Tucker Convicted Over Payday Loans

Timothy Muir, a lawyer who worked for Tucker, was also found guilty. He was sentenced to seven years. Muir argued he was hired with no experience and said that Tucker’s business practices were already established when he came onboard.

Tucker, in a Dec. 20 letter to the judge, asked for leniency, saying he had merely failed to properly communicate loan terms to his customers. He said his prosecution had led to his brother’s suicide and that the government had wrongfully demonized his legitimate operations, including AMG Services Inc., as a racketeering scheme.

He blamed bad advice from lawyers and said his practices had allowed high-risk people and businesses who’d otherwise been shut out by banks to get the loans they desperately needed.

Kansas City

Born in Kansas City, Missouri, Tucker helped raise his brothers after their World War II vet father died, according to his letter. His mother, whom Tucker describes as his hero and his inspiration, started her own janitorial business that eventually employed about 300 people and counted AT&T Inc. among its customers, he said.

"Since childhood, I aspired to become an entrepreneurial American success story," Tucker wrote in his letter to the judge. "I wanted to build businesses, create jobs, pay taxes, live in accordance with principles that make our country the best in the world."

But according to prosecutors Tucker chose another route, using loopholes to take advantage of native American tribes’ unique legal status to get around the law. He and his team formed sham relationships with the tribes and laundered billions of dollars through their bank accounts to hide his ownership and control of the business. The tribes got 1 percent of the revenue, the government said.

"From my vantage point, I saw us as doing a good deed for society," Tucker said, by following a 2000 law intended to help Native Americans create jobs and improve infrastructure.

"I am very sorry that our leaders castigate me as a villain, or some type of predator," Tucker said in the letter to the judge. "I truly regret that I failed to communicate the business model and industry appropriately."

The case is U.S. v. Tucker, 16-cr-091, U.S. District Court, Southern District of New York (Manhattan).

Leave a Reply

Your email address will not be published.