The Federal Trade Commission took a victory lap Tuesday in its fight with race car driver Scott Tucker and his payday lending operation.
The agency touted in a press release and blog post on its website that the $1.3 billion it won late last week in its lawsuit against race car driver Scott Tucker and his companies for deceptive payday lending practices was the largest ever in a litigated FTC case.
"This significant court judgment demonstrates the FTC's determination to crack down on deceptive payday lenders and the people who run them," FTC Chairwoman Edith Ramirez said in the release.
Chief Judge Gloria Navarro of the U.S. District Court in Las Vegas handed down a decision on Friday that said Tucker knew that some customers failed to understand the terms of their loans and that his marketing of the loans was misleading.
Tucker, who races in the United States and Europe, was also barred from engaging in consumer lending. The judgment applies to several Tucker-owned companies including AMG Capital Management and Level 5 Motorsports LLC.
On Monday, the FTC asked the judge to direct the turnover of some formerly court-frozen assets held by third parties in partial settlement of the judgment amounts. The judge's decision on that request is pending.
In 2012 the FTC sued Tucker, seeking $1.3 billion from him and the estate of his deceased brother, Blaine. The agency accused the defendants of deceptively failing to disclose the actual costs of loans to borrowers and falsely threatening consumers with arrest or prosecution if they defaulted on payments.
The defendants claimed they were exempt from FTC enforcement due to their affiliation with Native-American tribes with sovereign status. AMG is chartered under the laws of the Miami Tribe of Oklahoma.
The defendants also claimed immunity from state legal proceedings, arguing that the FTC lacked authority to enforce Truth in Lending Act and Electronic Fund Transfer Act against tribes and tribal businesses.
But U.S Magistrate Judge V. Cam Ferenbach in 2013 concluded that the FTC Act empowers the agency "to bring suit against Indian tribes, arms of Indian Tribes and employees and contractors of arms of Indian Tribes."
The FTC said Tucker controlled AMG and its affiliated entities and that he and his brother transferred $40 million collected from borrowers to the racing team Level 5 Motorsports for sponsorship fees.
In January 2015, AMG, the servicer of the loans, and MNE Services, which lent to consumers under names including Ameriloan and US Fast Cash, agreed to a $21 million settlement.
In a separate federal case in Manhattan, prosecutors charge that Tucker ran a $2 billion enterprise that used phony relationships with Indian tribes to claim immunity from state enforcement actions. They claim that from 1997 to 2013, Tucker operated payday lending companies that gave 4.5 million Americans short-term, high-interest loans under deceitful circumstances, charging 700% or more for loans.
Tucker in February pleaded not guilty in the case that is set for trial in April 2017.