After a five-week trial, it took less than a full day for a jury to return guilty verdicts on all counts against two former executives of a payday loan transaction. Timothy Muir, former general counsel, and Scott Tucker, former CEO of AMG Services Inc. were convicted of 14 counts, including money laundering, wire fraud and violations of federal racketeering laws and the loans.
According to the government, the couple operated a series of payday loan affiliates that charged 4.5 million people up to 700% interest on short-term loans and used bogus arrangements with Native American tribes to circumvent claims. state laws limiting interest owed. In a press release, Manhattan Acting U.S. Attorney Joon H. Kim said:
As a unanimous jury found today, Scott Tucker and Timothy Muir have targeted and exploited millions of struggling ordinary Americans by charging them illegally high interest rates on payday loans, up to 700% . Tucker and Muir sought to escape their crimes by claiming that this $ 3.5 billion business was actually owned and operated by Native American tribes. But it was a lie. The jury pierced Tucker and Muir’s lies and saw their business for what it was: an illegal, predatory scheme to unduly profit from vulnerable workers living on paycheck to paycheck.
Witnesses at the trial included former employees who had been asked to lie to clients about the location of the operation, in order to maintain the illusion of being a Native American business. Clients who were victims of their practices also testified, detailing loans that automatically renew except in the event of an affirmative opt-out, and automatic deductions that only applied to interest and not to the principle of the loan, details being hidden in loan documents.
According to a Wall Street Journal report, the penalties could be severe:
Charges of racketeering conspiracy to collect illegal debts each carry up to 20 years in prison, while violations of the Truth in Lending Act each carry one year in prison. Mr Tucker, who has a successful parallel career as a racing car driver, may also have to give up assets that the government says derive from schemes, including Ferrari and Porsches racing cars, a Learjet aircraft and a vacation home in Aspen, according to court documents.
Muir’s attorneys have not commented on the verdict, while Tucker’s attorney told the Journal that they “have every intention of appealing.”
Former “payday loan” GC sentenced at trial [Corporate Counsel]
Kathryn Rubino is a writer at Above the Law. AtL tipsters are the best, so please tune in with her. Feel free to email her with any tips, questions or comments and follow her on Twitter (@ Kathryn1).