JoCo lawyer says he can’t get fair trial if he’s tried with payday loan tycoon Tucker
Lawyers for a Shawnee man who was indicted in 2017 in a criminal tax fraud case say he can’t get a fair shake if he has to go to trial along with his co-defendant Scott Tucker, a notorious and previously convicted payday loan tycoon.
W. Brett Chapin, who practices tax and accounting law, filed a motion in U.S. District Court of Kansas this month asking for a separate trial. A federal grand jury in 2017 indicted Chapin and Tucker for failing to report millions worth of Tucker’s income taxes from 2008 to 2011.
Tucker, a former professional race car driver from Leawood, was convicted in 2017 by a federal jury in New York in a separate criminal case for running a $2 billion payday loan enterprise that prosecutors said bilked 4.5 million borrowers with deceptive and illegal short term consumer loans. A judge ordered Tucker to serve a prison sentence of more than 16 years.
Chapin was accused of preparing Tucker’s allegedly false tax returns. He has pleaded not guilty.
Chapin’s motion said the widespread public scrutiny of Tucker, particularly attention brought upon himself through his participation in a Netflix documentary called “Dirty Money” that chronicled Tucker’s misdeeds, would make it difficult for a jury to assess Chapin’s guilt or innocence independently if the two are tried together on the tax fraud charges. Chapin’s lawyers said their client has done nothing to bring public attention to himself.
“The smoke and fire made from the evidence of Tucker’s wrongdoing will rage on to an unjust conviction of Mr. Chapin simply because the jury could not see him clearly,” reads the motion by Chapin’s lawyers, Lance Sandage and Sarah Hess. “Even just sitting at the defense table with Tucker unnecessarily raises the risk of clouding the jury’s judgment.”
Chapin’s lawyers point out that Supreme Court Justice Amy Coney Barrett, during a hearing in January on Tucker’s appeal of a $1.3 billion judgment against him in a civil case brought by the Federal Trade Commission, appeared to have formed an unfavorable opinion about Tucker.
“I mean, he’s been convicted,” Barrett told a lawyer representing Tucker and his payday lending businesses during an oral argument on Jan. 13. “He has the dubious distinction of being the subject of an episode of ‘Dirty Money’ on Netflix.”
Chapin’s lawyers used Barrett’s observation to illustrate its wider point about a jury evaluating Tucker and Chapin together.
“Put simply, if even a Justice of the United States Supreme Court is biased against Mr. Tucker due to his conviction...and openly calls him a ‘dubious’ defendant with unclean hands who has ‘violated the law,’ how can one expect any member of the jury to remain unbiased against Tucker?” the motion says. “And if we can’t expect a juror to remain unbiased against Tucker, isn’t this the perfect case study of spillover prejudicing a codefendant, Mr. Chapin.”
Barrett and the Supreme Court heard arguments from Tucker’s lawyers, as well as those for the Federal Trade Commission, in an appeal of the $1.3 billion judgment that the consumer watchdog agency obtained against Tucker and his payday loan enterprise in 2016. It was the largest litigated penalty obtained by the FTC.
In appealing Tucker’s penalty, his lawyers argue that while the FTC can seek injunctions and restraining orders to prevent businesses from ripping off consumers, it can’t seek restitution — the return of ill-gotten gains — through litigation on behalf of victims.
A lower appellate court hearing Tucker’s appeal upheld the decision to demand restitution from Tucker. But another appeals court circuit in an unrelated case took the opposite position, that the FTC cannot seek restitution.
While the FTC sought $1.3 billion from Tucker and his businesses, it’s clear the agency will recover well short of that amount.
During January’s hearing before the Supreme Court, a lawyer for the FTC said much of the money Tucker and his companies got from borrowers through deceptive loans is spent and gone.
“We’re not going to get the 1.3 billion dollars,” Joel Marcus, counsel for the FTC, told the Supreme Court. “A lot of it was spent and doesn’t exist anymore and, you know, Tucker is now judgment-proof for the most part. But there were bank accounts, houses, race cars, whatever, assets that were seized and are being held basically in trust forever.”
