Illegal 700% Interest Payday Loans Paid For Scott Tucker To Go Racing

The criminal indictment alleges Scott Tucker evaded state laws in running a $2 billion nationwide payday lending operation that charged illegal interest of as much as 700 percent and collected hundreds of millions of dollars in undisclosed fees.

Paul Shechtman, a lawyer for Tucker, Thomas Bath, a lawyer for Muir, and Marilyn Brady Keller, a lawyer for Moseley, didn’t immediately return voicemail messages seeking comment on the charges.

Authorities said Tucker was arrested Wednesday in Kansas City, Kansas, and would initially appear in court in Kansas.

In a statement the Maimi Tribe and two companies controlled by the tribe, AMG Services Inc. and MNE Services Inc., said they have cooperated with authorities in the investigation and stopped their involvement in the payday lending business in 2013. It said they were deceived by misleading communications and contracts.

Tucker opened bank accounts to operate and receive the profits of the payday lending enterprise, which were nominally held by tribal-owned corporations, but which were, in fact, owned and controlled by Tucker, according to the indictment.

After several states sued beginning in 2003, the indictment said Tucker entered into sham relationships with Native American tribes to claim sovereign immunity, despite his continued control.

Tucker and his attorney, Timothy Muir, were arrested in Kansas City, Kansas. While the industry says the loans provide low-income workers with a necessary financial service, government regulators and consumer advocates say some lenders deceptively charge exorbitantly high interest rates. At the time, Tucker was best known as a late-blooming and successful driver in the American Le Mans Series.

The two men have been indicted by federal prosecutors in NY on charges related to allegedly deceitful payday lending, according to a person familiar with the matter. To offset the risk of lending to these consumers, payday lenders often charge higher-than-prime interest rates.

Tucker, who has raced in the Rolex Grand-Am Sports Car Series and other competitions, allegedly spent more than $100 million on a professional team whose web site said its drivers race Ferraris in “marquee” events around the world, the indictment charged.

The FTC already obtained $25.5 million in settlements with several entities, including AMG Services.

Preet Bharara, the U.S. Attorney for the Southern District of NY, seeks a $2 billion forfeiture from Tucker and Muir, a sum that equals what his office believes are their ill-gotten gains.

The indictment says Tucker and a lawyer also arrested Wednesday exploited over 4 million people in the US who were struggling to pay basic living expenses in what is said to be a “massive scheme”, according to news reports and court officials.