A federal judge in Kansas City, Kan., has awarded the Federal Trade Commission a $4 million judgment against Joel Tucker, a Johnson County businessman, who had been accused of creating and selling fake consumer debt portfolios.
The FTC accused Tucker in December 2016 of selling lists of purportedly outstanding payday loan balances to debt collectors. The FTC alleged those lists contained names, addresses, Social Security numbers and phone numbers of people who did not actually owe the debts assigned to them.
The debt collectors who bought these allegedly phony portfolios then pressured people to pay up on debts they did not owe, according to the FTC. The FTC said some of the people listed in the fake debt portfolios ended up paying the debt collectors to make the phone calls stop.
Also named as defendants in the case were SQ Capital, JT Holdings and HPD LLC, all companies that the FTC said were controlled by Tucker.
Tucker did not provide a response to The Star when asked about the FTC’s allegations and the judgment entered against him.
The FTC said that Tucker, in order to burnish the credibility of the fake portfolios, told some debt collectors that the consumer debts came from an online payday lending brand 500FastCash.
500FastCash is a trademark belonging to Red Cedar Services Inc., an online consumer loan company affiliated with Leawood payday loan mogul Scott Tucker.
Scott Tucker, who was also a professional racecar driver, was ordered last year by a federal judge to pay a $1.3 billion penalty to the FTC for running an enterprise that extended illegal payday loans; Scott Tucker is appealing that fine.
Scott Tucker is also currently on trial in New York on criminal charges of racketeering stemming from his payday lending businesses. That trial, in which his attorney Timothy Muir is also named as a defendant, is in its third week.
After the FTC filed its case in December against Joel Tucker, a federal judge approved a temporary restraining order in January against continuing his debt sales. Tucker was ordered to appear in court and provide an accounting of his debt sales.
Tucker appeared before Kansas federal judge Julie Robinson three times without an attorney and subsequently found in contempt of court for not providing the information requested.
Tucker eventually handed over some of the materials that Robinson and the FTC sought, but never filed a formal response to the allegations against him. In civil court cases, defendants are required to file an initial response to allegations, often within a month or two.
Defendants that fail to answer to allegations run the risk of having a court enter a default judgment against them, which means the judge essentially takes the claims as true and awards a plaintiff the damages sought.
That’s what happened to Tucker on March 31. He eventually hired attorneys in an attempt to reverse the default judgment, but earlier this month Robinson found that Tucker’s late response wasn’t enough.
Tucker now owes $4 million to the FTC and is generally banned from buying and selling consumer information.