Federal prosecutors have added four criminal charges to the indictment of Scott Tucker, a Leawood businessman accused of running a usurious payday loan operation.
The same counts were also added to the indictment of Tucker’s attorney, Tim Muir.
Both men appeared in federal court in Manhattan, N.Y., on Thursday and pleaded not guilty to new charges of money laundering and wire fraud. A conviction of money laundering can carry a punishment of up to 20 years in prison and as much as $500,000 in fines.
Those charges are in addition to previous and still standing accusations of unlawfully collecting debt and violating loan disclosure laws.
Never miss a local story.
A New York grand jury originally indicted Tucker and Muir in February, accusing them of operating an illegal payday loan operation that realized immense profits through deceptive loan practices.
Tom Bath, Muir’s attorney, said his client has broken no laws and that Muir plans to present his case at trial where he expects to be acquitted.
A trial is scheduled for April 17.
“We will not enter into any plea negotiations,” Bath said.
Tucker’s attorney could not be reached.
The indictment said Tucker’s businesses would withdraw interest-only payments from their bank accounts for as many as five pay periods before drawing down on the principal balance. The effect, the indictment says, was that a $500 loan that should have cost a customer $650 in finance charges could go as high as $1,925.
Tucker is accused of nominally setting up his businesses on American Indian tribes as a means to evade state usury laws. The indictment called Muir the architect of the scheme.
The defendants in court briefs have argued that tribal lending is legal and if Congress wanted to regulate it, it could. Congress has established no usury laws.
Tucker has been the target of several investigations going back years. The Federal Trade Commission sued him and his companies in 2012, resulting in a $1.266 billion judgment against him earlier this year.