The fallout from Scott Tucker’s illegal payday loan activity continued Tuesday with two Native American tribes that Tucker used as cover to circumvent state usury laws by reaching settlement agreements with federal prosecutors.
The United States Attorney for the Southern District of New York announced on Tuesday that the Modoc Tribe of Oklahoma and the Santee Sioux Tribe of Nebraska admitted that Tucker started his payday loan businesses on tribal land, but the tribes themselves – even had no significant role in business. .
Both tribes also acknowledged as part of the settlement that Tucker was using the tribes as a means to circumvent state usury laws – Native American tribes only respond to the federal government, which has no status of usury for payday loans – and that his businesses were operating out of Overland Park.
The confession contradicts Tucker’s claims that the tribes ran the payday loan companies and that he was just an employee.
Tucker was convicted of multiple criminal charges in 2017 stemming from a $ 2 billion payday loan program that charged illegal interest rates above 700%, deceived borrowers about repayment terms, and laundered the proceeds through bank accounts held by the tribes but controlled by Tucker.
Tucker, a 56-year-old Kansas citizen who graduated from Rockhurst High School and went on to fund a professional race car team with the proceeds of payday loans, is serving a sentence of 16 years and eight months in prison.
Tucker’s attorney, Timothy Muir, was also convicted of the same charges and is serving a seven-year prison sentence. Muir, an Australian citizen, faces deportation when his prison term expires.
The Modoc Tribe, where Tucker established a payday lender called Red Cedar Services, agreed to confiscate $ 2 million from the federal government. The Santee Sioux tribe, where Tucker established another payday lender called Santee Financial Services, lost $ 1 million.
Geoffrey Berman, United States Attorney for the Southern District of New York, said he plans to send more than $ 500 million recovered from Tucker’s payday loan companies to the Federal Trade Commission, which would then refer it to the victims of the scheme. by Tucker.
The Federal Trade Commission sued Tucker and his companies in 2012, resulting in a judge ruling that Tucker and others pay a fine of $ 1.3 billion, the highest number ever for the FTC in a litigation case.
“We are very pleased that the Department of Justice was able to recover this money in its criminal and civil cases, and that we can help by returning it to consumers,” said FTC Chairman Joseph Simons in a written press release.
Tucker’s illegal activities had consequences for many others connected with his business.
Oklahoma’s Miami Tribe, which was home to Tucker’s other payday loan businesses, lost $ 48 million to the federal government in 2016, the same year Tucker was indicted by a grand jury.
US Bancorp, the holding company of US Bank, agreed to pay the federal government $ 613 million because of his lax anti-money laundering protocols, which came to light in an investigation into Tucker’s affairs. Banks are supposed to monitor and report signs of suspicious and illegal banking practices, which investigators said the U.S. bank had failed to do regarding its accounts for Tucker.
Brett Chapin, a Shawnee tax lawyer, faces criminal charges for helping Tucker prepare tax returns who allegedly failed to report millions of income from Tucker’s payday lending business. Tucker is a co-accused in this case, which was brought by the Kansas state attorney. Both men have pleaded not guilty in this pending case.
“Today’s settlements with two of these tribes will add $ 3 million to the hundreds of millions already recovered – from Tucker, US Bancorp and a no-prosecution agreement with a third Native American tribe – to compensate the millions. of Tucker’s casualties, “Berman said in a statement.