Leawood man sentenced to prison and ordered to pay $40 million for fraudulent tax return
A Leawood man has been sentenced to three years in prison and ordered to pay $40 million in restitution to the Internal Revenue Service for tax fraud.
Scott Tucker, 59, faced one count of filing a false or fraudulent tax return, federal prosecutors for the District of Kansas said. He pleaded guilty in November 2021.
In 2010, Tucker reported on a 1040-tax return that his professional auto racing business named Level 5 had accumulated about $18.2 million in gross receipts and $17.5 million in expenses, according to court documents.
But Tucker admitted in a plea agreement that the form was filled out with inaccurate information to hide the amount of taxes he owed, a news release said.
Past financial crimes
In the late 1990s, Tucker ventured into payday loan businesses, which were marked by the lending of small, short-term loans that borrowers expect to repay by the time they get their next paycheck.
The payday lending industry has been known to trap borrowers into cycles of debt, according to critics.
The Federal Trade Commission believed Tucker was tricking borrowers through confusing loan terms with his company AMG Capital and a federal judge agreed in 2016, ordering him to pay $1.3 billion in debt, to be returned to those impacted.
In 2017, Tucker was charged with one count of filing a false tax return for failing to report $42.5 million in income in 2008 and $75 million in income in 2011, both resulting from his payday lending businesses.
Tucker was convicted of a financial crime again in 2017. A federal court in New York sent him to prison in 2018 for running a payday loan business nominally established on tribal lands, which were beholden to different state laws and interest rates. According to a previous report by The Star, the business largely ran out of an office tower in Overland Park, Kansas.
He was known for setting up his payday loan businesses on tribal lands as a way to evade state regulations on interest rates.
Two of the indigenous tribes Tucker used to skirt federal laws settled with federal prosecutors in 2018.
While in prison in Leavenworth, the U.S. Supreme Court took up the 2016 case where he was ordered to pay restitution to borrowers affected by his payday loan business.
At the time, the fine issued against Tucker was the largest ever in a case litigated by the FTC, according to previous reporting.
By April 2021, the justices unanimously overturned the 2016 decision with Justice Stephen Breyer citing that the FTC does not have the power to seek restitution through federal courts in cases where consumers have been ripped off, The Star reported.
The decision curtailed the FTC’s power to seek restitution through the courts unless specifically granted the power by Congress.
Tucker is currently serving a sentence of 16 years in prison for racketeering, wire fraud, money laundering, and Truth-In-Lending Act offenses, according to a January news release from the Southern District of New York.
A federal judge ordered that the Kansas sentence be served concurrently with the New York sentence.
This story was originally published March 2, 2022 at 3:20 PM.
