Joel Tucker’s part of the family payday-lending business comes under deeper scrutiny in Texas

Joel Tucker had to be in two places at once on April 28. Specifically, he was due to appear in front of two different judges in two different courthouses, more than 700 miles apart.

In Olathe, the Kansas City native had been summoned to Johnson County District Court in a case involving an Arizona businessman trying to collect on a $16 million judgment against Tucker.

In Houston, a federal bankruptcy judge and attorneys for several debt-collection agencies wanted Tucker to explain the provenance of debt portfolios he had sold, the validity of which was in doubt.

Tucker chose to go to Texas, where everything is bigger — including his legal problems.

It’s in a federal court there where a judge believes he has uncovered a “massive national breach” of the bankruptcy proof-of-claim process, and that Tucker is “at the heart of that concern.” Marvin Isgur, a federal bankruptcy judge for the Southern District of Texas, has told Tucker that he’s preparing a report for the FBI and the Justice Department about what he suspects is criminal filing of false claims in bankruptcy courts across the nation, tied to debts that Tucker sold.

“It’s up to them as to what to do about that,” Isgur said during a court hearing in April. The judge then delivered a stern warning to Tucker: “If I were you, I would start taking this seriously.”

Tucker is the brother of Leawood payday-lending magnate Scott Tucker, who has fetched headlines both for his wide-ranging payday-related operations (which federal authorities believe flouted a variety of laws) and for using his wealth from those businesses to run an auto-racing team that competes behind the wheels of Ferraris and other high-end automobiles. Scott Tucker is under criminal indictment in New York, where a trial is tentatively scheduled for later this year.

Consumer loans became something of a family business for the Tuckers. Another brother in the family, Blaine Tucker, had a career in hospitality (he once ran the now-shuttered Overland Park restaurant Mother Tuckers) before he got involved in Scott Tucker’s payday-lending enterprises. Often described as the most outgoing and gregarious member of the Tucker clan, Blaine Tucker committed suicide in 2014 as a Federal Trade Commission investigation into the brothers’ businesses took shape.

Joel Tucker took a different tack in the business. Tucker founded eData Solutions, a Kansas City company that generated leads: names of consumers who might be likely to take out payday loans. The company would sell those leads to payday lenders, which made the job of trying to track down clientele a bit easier. In 2012, Tucker sold eData Solutions to the Wyandotte Nation Tribe in Oklahoma for $277 million, according to Tucker’s testimony last month. (Tucker maintains two residences in Colorado — one in Boulder and another in a little mountain village called Wolcott, near Vail. He also has a residence in Prairie Village.)

More recently, Tucker appears to have plied his trade in buying and selling debt portfolios amassed from consumers who took out payday loans and did not pay them back promptly.

The trading of consumer debt is tremendous business. In 2013, the FTC analyzed the industry and determined that the 90 million consumer accounts it studied over a three-year period had an aggregate face value of $143 billion — and that debt buyers had spent $6.5 billion to acquire them.
In a perfect world, these portfolios come with a chain of title and underlying data that explain where the debts originated. That way, a debt buyer trying to collect from a consumer can explain the nature of the debt, fulfilling the right of the supposed debtor answering the phone. Similarly, it gives a debt collector the proof needed to justify a claim in bankruptcy court if a consumer files for bankruptcy.

Often, however, the record-keeping associated with these debt portfolios is sloppy and incomplete. Hence the difficulties for three Texas debt collectors.

The Pitch reported this spring that bankruptcy judges there opened something of an investigation to discover why several bankruptcy cases there had $390 payday loan claims for which the debt collectors had trouble explaining where they came from. It appears that these three companies bought debts that may have come from Tucker, who was twice called to testify.

According to transcripts of those hearings in April, Tucker seemed to have trouble explaining where the debts came from. He gave conflicting explanations that flummoxed attorneys for the debt collectors and the judge handling the case.

Attorneys for the debt collection agencies say their clients bought portfolios full of $390 payday-loan debts from a Florida company called First Choice, which says it bought the portfolio from Tucker.

Tucker wasn’t eager to concede that history during his April 4 testimony.

“You sold the claims to First Source,” said Tom Kirkendall, an attorney representing debt collector Porania LLC, to Tucker during cross examination. “You knew First Source was selling to my client. You received $40,000 of the purchase price. Your testimony that you weren’t involved was just false.”

Tucker took a break to confer with his lawyer about halfway through his April 4 testimony. When he returned, he pleaded his Fifth Amendment right against self-incrimination. He was briefly taken into custody by U.S. Marshals under an arrest warrant, but was released later that day, under instructions to produce evidence that might clear up where his loans had come from.

Tucker returned to Houston on April 28 for another hearing, which turned into an afternoon of confusing and conflicting testimony that brought the debt collectors no closer to knowing the origins of the purchased portfolios. Judge Isgur was not impressed.

“I think this is just one of the strangest hearings I’ve ever been in where the witness gleefully testifies he invents things,” he said to Tucker’s attorney. “It’s just the strangest hearing.”

Kirkendall also voiced his frustration.

“His client [Tucker] has not been forthright with the court,” Kirkendall said. “He has lied continually on the stand, sometimes even from minutes to minutes.”

Jim Wetwiska, Tucker’s Houston attorney, managed to get the cross examination stopped for the day, pleading that Tucker had flown in from Kansas City that morning and testified for more than four hours.

Meanwhile, the Houston judge has ordered the hiring of a forensic examiner to take a look at Tucker’s computers and e-mails. He ordered Tucker to stay off his computers.

A request by The Pitch to discuss the matter with Tucker elicited only a blank e-mail response.

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