A federal judge who already ruled that former race-car driver Scott Tucker violated U.S. lending laws must now decide whether to order him to pay $1.3 billion for operating an illegal payday-lending business.
The Federal Trade Commission this week asked U.S. District Judge Gloria M. Navarro of Nevada to award the large sum in damages, which it said was how much borrowers were overcharged for the company’s payday loans from 2008 to 2012.
Until court documents were recently unsealed, the size of Tucker’s enterprise was unknown. The Center for Public Integrity and CBS News exposed Tucker’s online business in a 2011 joint investigation. Tucker at that point was best known as a millionaire professional race-car driver in the American Le Mans series.
The investigation revealed that Tucker set up a series of shell corporations to hide his involvement in the payday lending company, AMG Services of Overland Park, Kansas. Once state law enforcement agencies tried to shut down those shell companies for violating payday lending laws, Tucker turned over ownership of the business to the Miami and Modoc tribes of Oklahoma and the Santee Sioux tribe of Nebraska. However, the deal allowed the tribes to keep only 1 percent of revenues.
In April 2012, the FTC sued Tucker and tribal entities for making loans with deceptive terms. Borrowers were told that a $300 loan would cost only $90 in interest, but in fact borrowers would have to repay as much as $1,000, the court found.
The tribal entities settled last year for $25 million. AMG Services shut down and Tucker dissolved his racing team.