DOJ Arrests Race Car Driver Scott Tucker and Lawyer for Payday Loan Scam

MoneyA race car driver and his lawyer have been indicted on charges related to a payday loan scam that evaded state laws in order to drastically increase interest rates.

Payday loans are generally a small monetary loan given to a consumer who is strapped for cash. The agreement between the lender and the recipient guarantees that the loan will be paid back in full after the recipient receives their next paycheck.

While the cost of living has risen consistently over the past 12 years, income growth has plateaued. This has left many families with less money and more living costs. Taking out cash loans seems a viable option for many of them, and while there are a variety of legal methods for obtaining fast cash loans, there are also strict rules forbidding predatory lending as well.

According to Forbes, Scott Tucker and his attorney Timothy Muir are facing charges of violating the Racketeer Influenced and Corrupt Organizations Act (“RICO”) and the Truth in Lending Act (“TILA”) after they allegedly charged illegal interest rates of up to 700%.

The duo were running a nationwide payday loan scheme, dubbed AMG Services. According to The Consumerist, Tucker and Muir claimed the business (worth $2 billion) was owned and operated by Native American tribes, meaning it didn’t fall under federal jurisdiction. However, according to U.S. Attorney Preet Bharara, the FBI and IRS found, “this deceptive and predatory scheme to take advantage of the most financially vulnerable in our communities has been exposed for what it is — a criminal scheme.”

In a statement released by the Department of Justice, Bharara said the two “targeted and exploited millions of struggling, everyday people by charging illegally high interest rates – as much as 700 percent.”

The business went by a slew of aliases, including: Ameriloan, Cash Advance, One Click Cash, Preferred Cash Loans, United Cash Loans, US FastCash, 500 FastCash, Advantage Cash Services, and Star Cash Processing.

According to the indictment, Tucker issued loans to 4.5 million people and many of those loans came with interest rates ranging from 400%-500%, though consumers weren’t openly alerted to these rates beforehand.

The Department of Justice concluded that the businessmen forged superficial connections with multiple Native American tribes in an attempt to shield their practices from state laws that prohibit such interest rates.

The company allegedly went as far as providing fake loan applications in an attempt to prove they had supplied loans to borrowers. In fact, these loans weren’t authorized by the alleged borrowers and resulted in harassment and the selling of the loans to collection agencies who would then go after the borrower.

Citizens who believe they have been the victim of this scheme are urged to get in touch with the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900.

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