Who is Scott Tucker
Scott Tucker is another example of how life brought some from hero to zero. For years, he was hailed as hero and example for many people. Without a college degree, Tucker rose into a self made entrepreneur establishing several businesses ranging from online loan lending to software developer. He was also known as competitive racing driver and had been competing in prestigious race competitions. But all his success stories mean nothing as now he serves in prison for the next sixteen years after found guilty in payday loan scheme.
Payday Loan Business
Scott Tucker started his online payday loan business in 2001 under the name of AMG Services. Payday loan is a type of short term loan that will be repaid when the borrower received the next paycheck. This type of loan usually lends small amount of money but with high interest. It becomes very popular because payday loan doesn’t require long and complicated application process. Most people who need fast cash loan for certain reason can easily apply online and received the cash loan not longer than 24 hours after application submitted. The downside is its high interest rate can be really burdening. AMG Services did a lot more than that.
AMG Services rose as payday loan company by offering high interest loans to consumers even to those living in the states where high interest loans are restricted or illegal. When the state regulator started to investigate and tried to stop the payday loan company operation, Scott Tucker made sold the payday loan business to Miami Indian tribe of Oklahoma. This safe made the company became a tribal entity and this status gave sovereign immunity form state courts. The sale was later proofed as a sham as Tucker was still in full control of the company even after the sale and he failed to report tax for incomes from this business.
Once it become a tribal entity, AMG Services payday loan lending practices operated under several different names targeting low income inviduals. The practices violated loan lending regulations including charging high interests up to 700% with many extra fees to make the borrowers fall into a deep debt problem. After long controversial business practices, this company became an attention for Federal law enforcement agencies.
The Fall Down
Federal Trade Commission field civil suit against Scott Tucker and his company, AMG Services, and several other defendants for illegal business tactics including deceived costumers by charging undisclosed and inflated interest rates. The company was also investigated for wire fraud, money laundering, and racketeering.
Federal court found Tucker and other defendants guilty with record breaking judgment of $1.266 billion and banned Tucker and is partners from lending business practice. That’s not the end of the misery. Series of criminal charges and lawsuits against Scott Tucker and his companies were filed in following years including violations of financial regulations, consumers rights violations, to tax fraud. All litigations led his business imperium to crumble and got him sentenced for 16 years and 8 month. For many years to come, instead of looking out from his race car windows, the only view he will get is just the prison cell walls.
Tags: #scott tucker