Federal judge in Nevada drops the hammer on local payday-loan magnate Scott Tucker, orders his assets frozen
A federal judge has ordered Scott Tucker and his wife to stick to an allowance for the next two months. To cover their living expenses and legal fees, they can spend no more than $150,000.
Most people can get by a lot longer for a lot less than that, but it may represent quite a departure from the jet-setting lifestyle that the Tuckers have enjoyed from the profits of Scott Tucker’s wide-ranging payday-lending businesses.
Tucker, a Leawood resident and race-car driver, is under criminal indictment in New York in connection with a series of payday-loan businesses that federal prosecutors say amounted to a predatory-lending and racketeering operation.
Those businesses also amounted, the Federal Trade Commission says, to the kind of personal fortune that makes $150,000 look like the minimum wage.
Preceding Tucker’s indictment in February, a long-running FTC investigation found that, just three years ago, Tucker and his related business entities had a collective bank balance of $212.6 million across four different financial institutions (see below). To get that rich, the FTC says, Tucker ran an usurious payday lending enterprise. Starting in the late 1990s, Tucker formed payday-lending companies that charged interest rates exceeding those allowed by state regulations. Tucker, several different authorities have claimed, incorporated those companies on American Indian reservations, which allowed the businesses to sidestep state regulations on payday-loan interest rates and disclosure laws.
Since March 2013 came a rapid series of money transfers and bank-account closures — enough movement to convince a federal judge handling the FTC case that Tucker may have been concealing or dissipating his assets.
The order says Tucker’s assets currently are worth no more than $125 million, which is far less than the roughly $1.3 billion that the FTC has sought to recover from Tucker. The latter figure represents the amount of money that the FTC believes customers overpaid on loans extended by Tucker’s payday businesses.
Thus, Gloria Navarro, chief judge for the U.S. District of Nevada, last week ordered Tucker’s assets frozen as part of a stinging ruling against him and his associated payday-lending entities. That means that his bank accounts are frozen, his credit cards turned off, his access to safety-deposit boxes prohibited.
The March 31 order found that the FTC had sufficiently demonstrated over the past three years that Tucker and his brother Blaine Tucker ran a payday-lending enterprise in which they “acted with reckless indifference to the truth or falsity or an awareness of fraud and an intentional avoidance of the truth.”
Blaine Tucker committed suicide in 2014.
Navarro ruled that Scott Tucker is personally liable for violating the FTC Act because he directed the loan activities and policies of his various payday-lending companies and was aware of a glut of consumers complaining that they’d been misled about the high cost of the loans they had received.
She ruled that Tucker’s wife, Kim Tucker, has benefited from $19 million in non-salary payments from her husband’s businesses and from an $8 million home in Aspen, Colorado, that was paid for by those same companies.
Navarro has ordered that Tucker and his companies hand over to the FTC full financial and accounting statements to individuals and companies associated with his payday-lending businesses, including a list of assets.
Jeffery Morris, a Kansas City attorney representing Tucker in both the FTC case and his criminal case in New York, was not immediately available for comment.
Tucker remained free on bond in his criminal case, secured by his $1.8 million Leawood residence.