Fraudulent transfer

The FTC has been going after fraudulent payday lending operations centered in Missouri and Kansas, with settlements as high as $1.266 billion.

In a press release dated January 9, 2017, the FTC announced charges against businessman, Joel Jerome Tucker, and his companies, SQ Capital LLC, JT Holding Inc., and HPD LLC, for selling portfolios made up of fake payday loans. According to the FTC, the loans listed in the portfolios were named phony lenders and debtors, including their social security and bank account numbers, and led to collection activities against consumers who had not taken out loans. The FTC previously brought actions against two debt collectors who used the fake portfolios.

In October 2016, the Kansas City Star reported that Joel Tucker’s brother, Missouri businessman and sometime racecar driver, Scott Tucker, was ordered to pay $1.266 billion to the FTC after Nevada federal judge, Gloria Navarro, determined that he and others ran a payday loan enterprise that engaged in deceit against its customers by failing to disclose terms and conditions of the loans and for charging usurious interest rates. Judge Navarro called the fraud “sustained and continuous.” Mr. Tucker attempted to evade state lending regulations by locating portions of his businesses on tribal lands, though the bulk of his operations were located in Overland Park, Kansas. Scott Tucker also has a pending criminal case against him in which he is accused of running a $2 billion payday loan enterprise that defrauded 4.5 million consumers. That case is scheduled for trial in April 2017.

In another case, a settlement was reached last summer between the FTC and payday lenders, Tim Coppinger and Ted Rowland, and their companies. Under the terms of that agreement the lenders paid almost $1 million with the threat of substantially greater judgments (up to $32 million) should they fail to honor the terms of the settlement agreement. The fraudulent activity included debiting money from the accounts of people who never requested loans but for whom the payday lender had obtained personal information. They would then charge interest and fees on those unauthorized loans. Joel Tucker had a hand in this operation through his company, eData Solutions, a “one-stop-shop” for assisting payday lenders in their start-ups and operations. eData’s involvement consisted of providing “customer/borrower leads, qualifying the leads, providing a loan management software system, and buying defaulted consumer loans to sell to third-party collectors.” Court-appointed Receiver, Larry Cook, is seeking to recover the entire $29.9 million that Coppinger and Rowland’s companies paid to eData Solutions for its services.