Kansas City businessman Scott Tucker was found guilty on racketeering charges for interest rates of as much as 700 percent on short-term loans.
According to a report in The Wall Street Journal citing a Manhattan court ruling, a federal jury found Tucker guilty in a case that focused on his $2 billion payday lending business. Prosecutors had contended he created illegal partnerships and made predatory loans via the business. In addition to Tucker, the report noted the jury convicted Timothy Muir, who was a former lawyer for Tucker and also his co-defendant.
After the four-week trial, the jury found them guilty of money laundering, wire fraud, racketeering and violating lending laws, among other counts. Tucker was charged with running a company that illegally tacked on as high as 700 percent interest on short-term loans, issuing them to more than 4.5 million people. His company was accused of hiding the terms of the loans in paperwork in an effort to trick people. He was also accused of using fake partnerships with Native American tribes to skirt laws that require lenders to cap the amount of interest they charge on their loans. An attorney for Tucker had argued the agreements with the Native American tribes were legal and that the terms of the loans were described to the customers. A lawyer for Tucker told The Wall Street Journal that he plans to appeal.
“The jury saw through Tucker and Muir’s lies and saw their business for what it was: an illegal and predatory scheme to take callous advantage of vulnerable workers living from paycheck to paycheck,” said acting Manhattan U.S. Attorney Joon H. Kim in a statement.
According to one of the witnesses who testified in the court proceeding, the company instructed employees to tell people that the offices were in tribal lands to make it seem that it was a Native American business. Jurors also heard from people who borrowed money and claimed to have realized months later that fees from the loans were draining the money they had in their bank accounts.