Federal Judge Says Leawood Payday Loan Mogul Scott Tucker and Others Close to Pay $ 1.266 billion

0


title=

Scott Tucker, also a Leawood payday loan businessman.

Nevada federal judge ordered Leawood businessman Scott Tucker and others to pay Federal Trade Commission $ 1.266 billion after finding out they ran a payday loan business that routinely cheated its consumers.

The judgment of Judge Gloria Navarro of the United States District Court of Nevada, released Friday evening, also bars Tucker from any future involvement in the consumer lending industry.

Judgment found consumers at Tucker’s payday loan companies were harmed by deceptive loan terms that the FTC said forced recipients of a $ 300 loan to pay $ 975 due to disclosures poorly designed loans and automatic repayment schedules.

“Here, Scott Tucker was not involved in an isolated and low-key deceptive loan incident, but engaged in sustained and ongoing conduct that has perpetuated the deceptive loan since at least 2008,” Navarro wrote in his ruling.

Friday’s judgment is the biggest penalty to date among multiple payday loan numbers in the Kansas City area, which has become a hotspot for the industry. In another case, an administrative judge last week recommended Mission Hills businessman James Carnes pay $ 38.2 million in restitution, along with a civil penalty of $ 5.4 million. dollars, for his role in managing Integrity Advance, another payday loan transaction. accused by the Consumer Financial Protection Bureau to deceive its consumers.

Nevada’s ruling against Tucker isn’t its only legal issue. Tucker also faces criminal charges in New York after a grand jury in February accused the Kansas City native of running a $ 2 billion payday loan business that exploited 4.5 million consumers.

Tucker’s attorney was not immediately available for comment on Saturday. He had denied having committed any wrongdoing in the FTC case and pleaded not guilty to the criminal charges against him. This trial is scheduled for April 2017.

Tucker grew up in Kansas City and attended Rockhurst High School, then Kansas State University. He first rose to prominence locally as a professional racing driver who drove Ferraris in competitions in the United States, Europe and the Middle East. A Star Story in 2009 described how Tucker, 46 at the time, had watched a sports car race on TV a few years before and got interested in racing.

Tucker and his brother Blaine started a short-term loan business in 1998 called the National Money Service, according to court records. Over the following years, the lending activity developed into several different business entities. From 2003 through 2008, court records indicate that Tucker transferred the businesses to three Native American tribes in Nebraska and Oklahoma, offering the tribes reduced business income from loans if the tribes allowed Tucker to establish offices on tribal lands.

In 2012, the FTC laid charges against Tucker, his brother Blaine Tucker, and several business entities over allegations that payday loan transactions charged usurious interest rates. The federal consumer watchdog has also accused Tucker and others of establishing their businesses on Native American reservations as a means of offering consumer loans while circumventing state interest rate regulations.

There is no federal law setting interest rates on payday loans, and tribal lands are generally immune from state regulations.

But Tucker’s business, officials said, operated only nominally on tribal lands. Most of the operation took place in Overland Park, where its various companies and trade names employed 600 workers.

The FTC had said the payday lending business made Tucker rich, including the opportunity to fund a professional race car team and buy an $ 8 million home in Aspen, in the Colorado.

Tucker fought against the FTC’s allegations, arguing in court that his companies made loans on terms reflecting industry standards for short-term credit and that he did not know his companies were violating federal law and that he did not intend to deceive consumers.

But Navarro disagreed with Tucker’s position. His decision highlighted evidence, including emails from his subordinates, which showed consumers often complained to businesses about the confusing nature of their loans.

In one example, a manager at one of the loan companies sent Tucker an email proposing a new loan repayment model because “90% of the problems we have with clients are that they don’t understand. not our renewal and refund process ”.

Navarro’s $ 1.266 billion order affects Tucker, his brother Blaine’s estate, who committed suicide in 2014 and various business entities under their control, including AMG Capital Management, Black Creek Capital Partners, Level 5 Motorsports, LeadFlash Consulting and Broadmoor Capital Partners.

Navarro also ordered Tucker’s wife to pay the FTC $ 19 million, an amount that represents money she acquired from loan companies. And an entity Tucker controls called Park 269, which owns the couple’s Aspen residence, has also been ordered to pay the FTC $ 8 million.

The penalties against Tucker are the toughest to date against local payday loan tycoons.

Last year, the Federal Trade Commission settled claims against Tim Coppinger and Frampton Rowland III, two Kansas City men accused of running a fraudulent payday loan program. Both Coppinger and Rowland are subject to $ 32 million and $ 22 million in suspended judgments, respectively.

Richard Moseley Sr., another Kansas City-area payday loan figure, was indicted by a grand jury in New York City earlier this year.

Carnes, the Mission Hills businessman, faces heavy financial penalties.

Carnes was charged by the Consumer Financial Protection Bureau in late 2015 for deceiving clients through its payday loan business, Integrity Advance. Administrative law judge Parlen McKenna on Tuesday ruled that the CFPB had proven several of its allegations against Carnes and the company.

McKenna recommended that Integrity Advance and Carnes be jointly required to pay $ 38.1 million in restitution. Additionally, McKenna recommended Carnes pay a civil fine of $ 5.4 million while Integrity Advance pays a fine of $ 8.1 million.

Previous court documents in the Carnes case indicated that Integrity Advance had little left in its corporate bank accounts. Carnes sold some of the assets of his payday loan business to a Dallas company for $ 50 million in 2012.

Kansas City Star Related Stories



Source link

Share.

Leave A Reply