In what has been held up as one of the biggest criminal cases to be brought against a payday lender, The Wall Street Journal reported Wednesday (Feb. 10) that federal prosecutors have brought charges against two men, a “businessman-turned-race-car-driver” and his attorney, alleging that they overcharged customers by hundreds of millions of dollars.
The charges stated that Scott Tucker used as much as $100 million garnered from fraudulent loans to finance both his own professional racing team and purchases of luxury goods. The charges from the Manhattan U.S. attorney’s office fall under the Truth in Lending Act and the Racketeer Influenced and Corrupt Organizations Act. The loan business overseen by Tucker and his attorney, Timothy Muir, gathered as much as $2 billion in top line from 2003 to 2012. The pair were arrested Wednesday in Kansas City and may be extradited to New York.
Tucker was behind several payday lending operations and used Native American tribes as a cover for his business ventures. The lending operations also have been part of a $48 million settlement with the Miami Tribe of Oklahoma — that sum was part of ill-gotten gains from Tucker’s alleged scheme. The Federal Trade Commission said Tucker’s lenders misled borrowers, stating that a $300 loan would cost $390, ultimately, but actually cost $975. The lenders operated with names such as Ameriloan, United Cash Loans and Advantage Cash Services, among others.
Tucker has raced in both American and European competitions and founded his team 10 years ago, christening it Level 5 Motorsports. The team itself was backed by proceeds from predatory loans, said prosecutors. Races of note in which he participated included Le Mans, an endurance race.
WSJ said Tucker has been investigated over several years by the Federal Trade Commission. A lawsuit is still outstanding in which the FTC asked a Nevada federal judge to levy $1.3 billion in damages that are owed to those overcharged by Tucker’s operations. The racing team has also been named as a defendant.