Scott Tucker Found Guilty in Rent-a-Tribe Payday Loan Scheme
It took a federal court jury only five hours to return a guilty verdict for Scott Tucker and attorney Timothy Muir in their trial for fraud, money laundering, conspiracy, and racketeering. Over the course of almost a month, federal prosecutors told the story of how Tucker, through the legal help of Muir, created the facade of tribal lending businesses with the Modoc Tribe of Oklahoma, Miami Nation, and Santee Sioux Nation all while retaining complete control of the lenders’ operations. In exchange for one percent of the profits from the payday lending operations, the tribes agreed to provide Tucker’s businesses with sovereign immunity. Tucker is currently appealing a $1.3 billion fine by the Federal Trade Commission for the same payday loan businesses.
Tucker’s conviction is likely to put to rest a business model that not only threatened the utilization of tribal sovereignty by legitimate tribally-owned businesses, but also perpetuated a immoral exploitation of impoverished Native communities. Charles Hallihan, a former business partner with Tucker that helped perfect the rent-a-tribe lending model, is also currently on trial in federal court in Pennsylvania under similar charges.
The Tucker trial included many startling revelations about the lengths Tucker and Muir would go to maintain the illusion that the tribes operated the lending entities. Muir reluctantly acceded that he fraudulently signed a legal document with “J.S. Ragman” (a Vietnam era slang term for a disheveled soldier, Joe Shit the Ragman) in a $30 settlement with Hallihan. In an email, Muir alluded to the true nature of Tucker’s business arrangement with the tribes via a reference to the Wizard of Oz by referring to Tucker as “the man behind the curtain.” Muir and Tucker argued their dealings with the tribes were in “good faith,” but prosecutors reminded jurors that the tribes retained no control over these operations- the tribes did not have access to the tribal business bank accounts, did not sign their own legal settlements, created fake lawsuits to give the illusion of tribal ownership, and did not provide any advice or input as to how the businesses were run. Employees at Tucker’s call centers even went so far as to pretend they were on tribal lands when speaking over the phone with customers, discussing the weather in an attempt to mislead consumers as to the true operators of the business.
Tucker and Muir now face steep fines and possible jail time. In stark contrast to Tucker and his former tribal business partners, NAFSA members abide by a strict set of industry best practices that include a number of provisions allowing NAFSA member tribal lending entities (TLEs) to retain control of their lending operations and use revenues to fund vital community programs, not help some executive play out fantasies of being a race car driver. Hopefully Tucker’s trial puts to rest a business model that is far from sustainable and helps tribes enter a new era of lending.
