July 27, 2015 / 4:45 PM / 4 years ago

Racecar driver, U.S. agency in settlement talks over payday lending

NEW YORK, July 27 (Reuters) - A professional racecar driver is in talks to settle a U.S. regulator’s lawsuit accusing him of participating in a deceptive payday lending scheme, as federal prosecutors decide whether to bring criminal charges, according to court filings.

Lawyers for Scott Tucker, who competes on U.S. and European circuits, said in a filing on Friday in Las Vegas federal court that they were in discussions to resolve claims by the Federal Trade Commission involving online lending companies the agency says he controls.

Payday lenders provide short-term loans tied to borrowers’ paychecks that carry charges ranging from $10 to $30 for every $100 borrowed, according to the Consumer Financial Protection Bureau.

A settlement conference with the FTC, Tucker and related defendants is expected in September, the lawyers said. Any deal could include a monetary component as well as an injunction, according to a magistrate judge’s summary of a July 20 hearing.

The discussions are taking place during a related criminal investigation run by Manhattan U.S. Attorney Preet Bharara’s office. Tucker is “a - if not the - target of the investigation,” his lawyers wrote in the filing.

Representatives for the FTC and Bharara’s office declined to comment. Lawyers for Tucker did not respond to requests for comment.

The criminal probe, first revealed by Reuters in May 2014, came during a crackdown by U.S. authorities against perceived abuses among online payday lenders.

In 2012, the FTC sued Tuckers and several companies, including AMG Services Inc, for misrepresenting to consumers the cost of loans they were issued.

AMG said it was owned by the Miami Tribe of Oklahoma. Like other payday lenders, it had claimed in legal proceedings that its tribal affiliation gave it sovereign immunity.

But the FTC said the company and its related entities were in fact controlled by Tucker, an Overland Park, Kansas, resident. The agency said Tucker with his brother transferred more than $40 million collected from borrowers to racing team Level 5 Motorsports for sponsorship fees.

AMG, which serviced the loans, and MNE Services Inc, which lent to consumers under names including Ameriloan and US Fast Cash, agreed to a $21 million settlement in January, leaving Tucker and various related defendants to face off with the FTC.

The case is Federal Trade Commission v. AMG Services Inc, et al, U.S. District Court, District of Nevada, No. 12-00536. (Reporting by Nate Raymond in New York; Editing by Lisa Von Ahn)

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