Federal prosecutors are asking a judge in New York to sentence Leawood, Kan., businessman Scott Tucker to no less than 20 years in prison for his conviction of running a criminal payday lending enterprise.
In a sentencing memorandum filed Dec. 29, the U.S. Attorney’s Office for the Southern District of New York said Tucker’s years-long practice of charging illegal interest rates, laundering the proceeds and evading law enforcement warranted 20 years or more in prison.
In relation to his $2 billion enterprise that federal prosecutors said exploited 4.5 million consumers, Tucker was convicted in October of 14 criminal charges including racketeering. He is scheduled for sentencing on Friday.
In seeking a lengthy sentence, prosecutors wrote that Tucker had a “lack of insight” into the criminal conduct of his business.
“It is one thing for a defendant who chose to go to trial to maintain his innocence and refuse to accept responsibility for his conduct,” the government’s sentencing memorandum reads. “But a defendant who is so completely lacking in basic honesty, who is willing to brazenly contradict evidence seen by the Court at his trial, and who is apparently surrounded by people who his persistent efforts to divert responsibility and blame others, poses a particular threat to a public that needs to be protected from his schemes.”
Prosecutors are seeking at least 10 years for Tucker’s attorney and co-defendant, Tim Muir, who was also convicted at trial of the same charges as Tucker. Muir, an Australian citizen who moved to the United States as a seven-year=old, faces deportation when his prison sentence ends.
Attorneys representing Tucker asked for no more than 15 years in prison, a term that would be appropriate and allow the 55-year-old “to have a meaningful life beyond incarceration.”
Tucker initially made his name in Kansas City and elsewhere in the world as a professional race car driver, but in 2011 was revealed to be the businessman behind a host of online payday lending operations that were set up on American Indian reservations but operated in large part out of Overland Park.
Prosecutors said Tucker nominally established his businesses on American Indian lands as a way to charge interest rates beyond what state regulations would allow.
In a letter to Judge Kevin Castel, Tucker said he got into payday lending to provide “a worthwhile service” to borrowers. He wrote that he was following the advice of his attorneys who told him his business model was legal, echoing a defense he presented at trial.
“As a leader, I should have known that it was my responsibility to gather better advice,” Tucker wrote. “I wanted the world to see me as someone who served a needy community with a competitive service that is in great demand. I regret that I lacked the foresight to see how providing this service could result in the perception of making victims of innocent people.”
Tucker was among other payday lending moguls convicted last year of running illegal payday lending businesses. In November, a New York jury also found Kansas City businessman Richard Moseley, Sr., guilty for his role in a group of offshore entities known as the Hydra Lenders, which lent at illegal interest rates and even gave loans to people who hadn’t authorized them.
Charles Hallinan, a Philadelphia-area businessman often referred to as the “godfather of payday lending” and former business partner of Tucker’s, was also found guilty in November of operating illegally.
While Tucker’s sentencing on Friday is the most severe legal problem facing him, it’s not the last. Tucker and a Shawnee attorney, W. Brett Chapin, were arrested and indicted in December of filing false tax returns. The grand jury alleges that the two submitted tax returns that did not report more than $100 million in income.