1 00:00:00,000 --> 00:00:06,980 In this episode of American Greed, he's a race car driver on a fast and 2 00:00:06,980 --> 00:00:10,380 furious rise to the top of the payday loan industry. 3 00:00:11,160 --> 00:00:13,700 We started building an online lending platform. 4 00:00:13,920 --> 00:00:18,580 We built it into a multi -billion dollar brand. But Scott Tucker is selling high 5 00:00:18,580 --> 00:00:22,560 interest predatory loans designed to bleed consumers dry. 6 00:00:23,100 --> 00:00:27,040 They just kind of turned into piranha and just attacked my account. 7 00:00:27,880 --> 00:00:31,060 He was targeting people who could at least afford it at the worst times in 8 00:00:31,060 --> 00:00:35,220 lives. The customer dictated that they didn't have any other place to go. 9 00:00:36,240 --> 00:00:41,520 He's making a killing as he fleeces more than $1 billion out of millions of 10 00:00:41,520 --> 00:00:45,160 customers. All the fuel is high -octane lifestyle. 11 00:00:46,000 --> 00:00:48,420 There's a lot of snakes out there, and Mr. 12 00:00:48,720 --> 00:00:50,600 Tucker is damn sure one of them. 13 00:01:13,610 --> 00:01:17,010 It's the American Le Mans Series in Laguna Seca, California. 14 00:01:18,150 --> 00:01:23,210 And 49 -year -old payday loan entrepreneur Scott Tucker is behind the 15 00:01:23,430 --> 00:01:25,670 facing a double -barrel challenge. 16 00:01:26,850 --> 00:01:31,930 First, the racetrack itself, which is known as one of the world's toughest. 17 00:01:34,690 --> 00:01:38,890 Laguna Seca is challenging because of the turns. The hairpins and the S's are 18 00:01:38,890 --> 00:01:41,750 very, very tight, and they're difficult to navigate in traffic. 19 00:01:42,140 --> 00:01:45,760 To get that car around that corner that fast with that speed and maintain that, 20 00:01:45,880 --> 00:01:49,340 it's difficult to do. And it's a quick, easy way to spin out. 21 00:01:53,500 --> 00:01:56,260 He's also got the law hot on his trail. 22 00:01:56,880 --> 00:02:00,320 The feds are after him for allegedly ripping off consumers. 23 00:02:01,000 --> 00:02:02,960 And they want to shut his business down. 24 00:02:04,460 --> 00:02:06,760 But Tucker can't take his mind off the road. 25 00:02:07,140 --> 00:02:11,020 Not as he heads toward a corkscrew at 100 -plus miles per hour. 26 00:02:11,880 --> 00:02:15,540 Any race car driver will tell you if you're focused on anything else, that's 27 00:02:15,540 --> 00:02:18,940 when you go off the track. If you're not in that moment in that car, that could 28 00:02:18,940 --> 00:02:19,940 be death. 29 00:02:24,600 --> 00:02:30,060 It's 21 years before this race when Scott Tucker first learns what a real 30 00:02:30,060 --> 00:02:35,800 tailspin feels like. A failed criminal enterprise lands him here at Leavenworth 31 00:02:35,800 --> 00:02:38,840 Federal Penitentiary in Kansas in 1991. 32 00:02:39,960 --> 00:02:44,720 Only 29 at the time, he's convicted of mail fraud after running a scam under a 33 00:02:44,720 --> 00:02:48,640 made -up company called Chase Morgan Stearns and Lloyd. 34 00:02:49,200 --> 00:02:52,040 Tucker started this business where he's essentially telling people he can get 35 00:02:52,040 --> 00:02:56,280 them loans, and that the reason why he could get them loans is because his 36 00:02:56,280 --> 00:03:00,200 business is owned by J .P. Morgan and Chase Manhattan and Lloyds of London, 37 00:03:00,200 --> 00:03:02,200 that as a result, he had access to capital. 38 00:03:02,600 --> 00:03:06,760 In fact, he had no connection to those banks, and he had no ability to get 39 00:03:06,760 --> 00:03:07,760 people financing. 40 00:03:07,840 --> 00:03:09,380 He just charged them advance fees. 41 00:03:09,870 --> 00:03:10,870 and pocketed their money. 42 00:03:13,310 --> 00:03:17,950 After serving a year in prison, the native Kansan seeks a fresh start. 43 00:03:18,570 --> 00:03:23,310 According to Tucker himself, he bounces from one business to the next, managing 44 00:03:23,310 --> 00:03:26,090 a bar and grill, and then selling cars. 45 00:03:27,010 --> 00:03:32,250 But it's in the rapidly growing payday loan industry where he smells real 46 00:03:32,250 --> 00:03:33,250 opportunity. 47 00:03:34,350 --> 00:03:40,150 Payday loans are short -term loans for an amount usually between $100 and $1 48 00:03:40,150 --> 00:03:44,390 ,000. And we call them payday loans because they're usually due at the 49 00:03:44,390 --> 00:03:48,150 borrower's next payday, which could be two weeks after the loan is issued. 50 00:03:48,590 --> 00:03:54,510 Most banks stopped making small cash loans to consumers by the late 1990s. So 51 00:03:54,510 --> 00:03:56,710 payday lenders are filling that void. 52 00:03:57,150 --> 00:04:01,510 For people with no place else to turn, many are willing to pay the costly 53 00:04:01,510 --> 00:04:02,510 interest fees. 54 00:04:03,000 --> 00:04:04,620 that payday lenders charge. 55 00:04:05,140 --> 00:04:07,820 They're usually geared at financially distressed consumers. 56 00:04:08,100 --> 00:04:12,420 A lot of these folks are living paycheck to paycheck, and some of them might 57 00:04:12,420 --> 00:04:17,200 also have a special emergency, like a car breakdown or a medical bill, 58 00:04:17,200 --> 00:04:18,200 else like that. 59 00:04:20,120 --> 00:04:25,780 Tucker gets in on the action and rents a storefront outside Kansas City in 1997. 60 00:04:26,940 --> 00:04:30,220 There, he begins operating a payday loan service. 61 00:04:31,790 --> 00:04:38,170 In this podcast, recorded in 2017, Scott Tucker explains how he took a leap of 62 00:04:38,170 --> 00:04:40,310 faith into an emerging industry. 63 00:04:40,890 --> 00:04:47,630 The business model is, are you smart enough to be able to make the decision 64 00:04:47,630 --> 00:04:54,630 on who you will or will not advance money to, and how do you price it? And 65 00:04:54,630 --> 00:04:57,550 was no answers. You had to do it and figure it out. 66 00:04:58,830 --> 00:05:00,110 At first... 67 00:05:00,410 --> 00:05:03,690 Tucker follows the same playbook as many other payday lenders. 68 00:05:04,630 --> 00:05:09,830 Besides charging high interest rates, he makes the most money from customers who 69 00:05:09,830 --> 00:05:15,090 can't pay him back on time and who get roped into taking out a second or even 70 00:05:15,090 --> 00:05:17,990 third loan known as a rollover. 71 00:05:18,570 --> 00:05:20,970 Some people would say, you know, $350. 72 00:05:22,000 --> 00:05:27,100 for borrowing $300, that's not that crazy of a deal, especially for a 73 00:05:27,100 --> 00:05:31,220 person. The problem is the rollover fees, which is that they kind of nudge 74 00:05:31,260 --> 00:05:36,180 they encourage you to extend the loan, then it kind of traps you into the cycle 75 00:05:36,180 --> 00:05:37,180 of debt. 76 00:05:38,820 --> 00:05:44,460 But then Tucker meets Charles Hallinan, a wealthy entrepreneur from 77 00:05:44,460 --> 00:05:45,460 Pennsylvania. 78 00:05:46,380 --> 00:05:52,120 Hallinan, who authorities would dub the godfather of payday loans, makes plans 79 00:05:52,120 --> 00:05:57,580 to tap into markets that no one else touches, the ones where payday lending 80 00:05:57,580 --> 00:06:00,120 tightly regulated or even outlawed. 81 00:06:00,520 --> 00:06:04,800 Many states have state usury laws which limit the amount of interest you can 82 00:06:04,800 --> 00:06:08,380 charge. So the game becomes how do you evade some of these state laws? 83 00:06:08,900 --> 00:06:13,840 He finds an eager protege in Tucker, and together they launch a payday lending 84 00:06:13,840 --> 00:06:18,480 company named National Money Service, or NMS, in 1998. 85 00:06:19,660 --> 00:06:24,020 Tucker agrees to run the business in a Kansas City suburb, while Hallinan 86 00:06:24,020 --> 00:06:25,780 provides the startup fund. 87 00:06:26,400 --> 00:06:30,800 Hallinan invested about half a million dollars with Tucker, a 50 -50 joint 88 00:06:30,800 --> 00:06:35,660 venture, which essentially entitled Charles Hallinan to half the proceeds of 89 00:06:35,660 --> 00:06:36,700 Tucker's payday lending business. 90 00:06:39,240 --> 00:06:43,820 It's at this point that they hatch their scheme to sell loans all across the U 91 00:06:43,820 --> 00:06:49,840 .S., using a bank as their front. This scheme, called Rent -A -Bank, helps them 92 00:06:49,840 --> 00:06:50,940 dodge state laws. 93 00:06:51,440 --> 00:06:57,560 National banks don't have to obey the state's interest rate limitations, 94 00:06:57,780 --> 00:07:03,020 and therefore the payday lender would say that it's the bank that's the 95 00:07:03,120 --> 00:07:08,980 and therefore we can ignore your state's regulations on payday loans. 96 00:07:09,200 --> 00:07:13,560 They forge a partnership with the obscure county bank of Delaware. 97 00:07:14,160 --> 00:07:17,740 Its spokesy name and website belie the fact... 98 00:07:17,950 --> 00:07:19,490 that it has a federal charter. 99 00:07:20,150 --> 00:07:25,130 In exchange for 5 % of their profits, County Bank is willing to lend them its 100 00:07:25,130 --> 00:07:26,770 name and charter. 101 00:07:27,170 --> 00:07:31,110 The bank didn't actually lend any money. The bank didn't put any money at risk. 102 00:07:31,250 --> 00:07:34,950 But what they did do is they allowed these payday lenders to say that they 103 00:07:34,950 --> 00:07:36,430 extending their loans through County Bank. 104 00:07:37,270 --> 00:07:41,450 Around the same time, Tucker begins taking his lending services online. 105 00:07:42,210 --> 00:07:46,530 His new internet platform gives him unfettered access to consumers. 106 00:07:47,070 --> 00:07:48,070 Nathan White. 107 00:07:48,390 --> 00:07:52,770 This was really a pure entrepreneur move. 108 00:07:53,050 --> 00:07:55,910 It was kind of like the Wild Wild West back then on the Internet. 109 00:07:56,190 --> 00:08:00,090 He was on the vanguard of it. I think he came in at the right time in the early 110 00:08:00,090 --> 00:08:05,290 2000s, figured out that you can leverage the Internet to market these loans to a 111 00:08:05,290 --> 00:08:09,170 whole new group of people. That could be an explosively lucrative market. 112 00:08:09,870 --> 00:08:14,790 As part of his operation, Tucker sets up five different companies with names 113 00:08:14,790 --> 00:08:21,790 like 500 Fast Cash, Cash Advance, and United Cash Loans. They 114 00:08:21,790 --> 00:08:24,350 serve as the public face of his lending enterprise. 115 00:08:25,230 --> 00:08:31,790 By 2003, Tucker's making millions of loans each year and generating tens of 116 00:08:31,790 --> 00:08:32,789 millions of dollars. 117 00:08:33,130 --> 00:08:37,610 But when federal regulators begin taking a closer look at County Bank of 118 00:08:37,610 --> 00:08:42,830 Delaware, he decides that the banks become too risky and too costly. 119 00:08:43,340 --> 00:08:47,920 Tucker got tired of paying 5 % of the county bank for nothing, particularly 120 00:08:47,920 --> 00:08:50,020 he started to realize that he may have another option. 121 00:08:50,580 --> 00:08:55,900 Tucker is convinced that he's found the perfect alternative, Native American 122 00:08:55,900 --> 00:08:56,900 tribe. 123 00:08:57,860 --> 00:09:02,020 States and Indian tribes have the same status under federal law. 124 00:09:02,240 --> 00:09:06,940 So a state cannot sue an Indian tribe. A state cannot enforce state law against 125 00:09:06,940 --> 00:09:07,940 an Indian tribe. 126 00:09:08,180 --> 00:09:09,980 They have tribal sovereign immunity. 127 00:09:11,500 --> 00:09:16,740 By partnering with one or more tribes, he can use tribal law to shield himself 128 00:09:16,740 --> 00:09:20,300 from regulators and keep more of the profits for himself. 129 00:09:21,100 --> 00:09:26,340 He would pay them a very small percentage of his revenues in exchange 130 00:09:26,340 --> 00:09:29,140 acting as the figureheads for his lending business. 131 00:09:29,740 --> 00:09:35,140 As Tucker begins to lure one tribe after another into his racket, it seems he'll 132 00:09:35,140 --> 00:09:38,060 exploit whomever he needs to for money. 133 00:09:39,340 --> 00:09:44,980 When you have hopelessness to the level I've seen in Indian country, and then 134 00:09:44,980 --> 00:09:50,460 you have people come in with ideas, kind of like the snake oil salesman, it 135 00:09:50,460 --> 00:09:51,460 makes it worse. 136 00:09:54,120 --> 00:09:59,480 Next on American Greed, Tucker pours a fortune into the race car team of his 137 00:09:59,480 --> 00:10:03,980 dreams. But will life in the public eye be more than he can handle? 138 00:10:04,520 --> 00:10:08,740 There was this interesting dichotomy of like him wanting to hide his business, 139 00:10:08,840 --> 00:10:11,220 but wanting to be famous for racing. 140 00:10:11,460 --> 00:10:13,100 Those two things can't coexist. 141 00:10:26,940 --> 00:10:30,680 Welcome to Miami, Miami, Oklahoma. 142 00:10:33,770 --> 00:10:35,450 It's November 2003. 143 00:10:36,430 --> 00:10:40,610 Payday lending entrepreneur Scott Tucker is on the hunt for a new business 144 00:10:40,610 --> 00:10:41,610 front. 145 00:10:41,950 --> 00:10:47,130 So he strikes a deal with the Miami Indian tribe, making them partners in 146 00:10:47,130 --> 00:10:48,950 multi -million dollar lending enterprise. 147 00:10:49,590 --> 00:10:54,090 He does the same with the neighboring Modoc tribe the following month. 148 00:10:54,490 --> 00:11:00,350 Scott Tucker pitched them the idea that in exchange for using their names, he 149 00:11:00,350 --> 00:11:02,010 would give them 1 % of the revenues. 150 00:11:02,510 --> 00:11:07,570 coming in from the payday loans. And Scott Tucker believed that by doing so, 151 00:11:07,570 --> 00:11:12,350 could create the appearance that the tribes, and not Scott Tucker, was 152 00:11:12,350 --> 00:11:13,350 this operation. 153 00:11:13,570 --> 00:11:18,450 Because the tribes have sovereign immunity to set their own regulations on 154 00:11:18,450 --> 00:11:23,290 reservation lands, Tucker believes that he can use them to evade state laws. 155 00:11:24,010 --> 00:11:28,230 His lending operation, now called CLK Management, 156 00:11:28,960 --> 00:11:34,200 is already doing business illegally in many states across the U .S. For one 157 00:11:34,200 --> 00:11:38,300 thing, Tucker's selling payday loans in places where it's outlawed. 158 00:11:38,640 --> 00:11:45,140 For another, he's charging exorbitant interest rates of 700 to 1 ,000 percent, 159 00:11:45,460 --> 00:11:48,680 well above the legal limits where payday lending is allowed. 160 00:11:49,860 --> 00:11:54,800 At the outset, Tucker offers the Miami and Modoc tribes major roles in his 161 00:11:54,800 --> 00:11:55,800 organization. 162 00:11:57,390 --> 00:12:02,510 But as their partnership moved forward, it becomes clear that the tribes have no 163 00:12:02,510 --> 00:12:05,730 real voice or decision -making power at all. 164 00:12:06,050 --> 00:12:11,730 They were not agreements by which the tribes actually acquired any payday 165 00:12:11,730 --> 00:12:15,030 lending business or put up any money to acquire a payday lending business. 166 00:12:15,530 --> 00:12:18,490 They didn't have to do anything, and he didn't want them to do anything. 167 00:12:18,770 --> 00:12:23,170 All of the actual work is being done at Tucker's headquarters in Overland Park, 168 00:12:23,330 --> 00:12:24,330 Kansas. 169 00:12:24,750 --> 00:12:29,090 He's moved into a bigger building now, where he employs several hundred call 170 00:12:29,090 --> 00:12:31,290 center agents and debt collectors. 171 00:12:31,550 --> 00:12:36,830 To maintain the rules that CLK is tribally owned, his call center reps are 172 00:12:36,830 --> 00:12:39,590 required to lie about the firm's location. 173 00:12:40,250 --> 00:12:44,210 If anybody asked where they were, they were told, say, Miami, Oklahoma, and 174 00:12:44,210 --> 00:12:48,290 were each day given a weather report of what the weather was in Miami, Oklahoma. 175 00:12:48,390 --> 00:12:50,470 So if somebody challenged them... 176 00:12:50,940 --> 00:12:53,560 It's like, are you telling me the truth? Is it really Miami, Oklahoma? They 177 00:12:53,560 --> 00:12:56,080 could say, yeah, well, it's 72 degrees and sunny right now. 178 00:12:57,800 --> 00:13:02,540 Tucker wants an insurance policy in case the Oklahoma tribes back out. 179 00:13:02,900 --> 00:13:07,740 So his lawyers contact a third tribe, the Yuroks in Northern California. 180 00:13:08,780 --> 00:13:14,040 It's the spring of 2004 when Lisa Adams, senior attorney for the Yurok tribe, 181 00:13:14,220 --> 00:13:15,340 receives their call. 182 00:13:16,600 --> 00:13:19,560 She's been vetting business opportunities for the Yuroks. 183 00:13:19,900 --> 00:13:21,240 who are desperate for revenue. 184 00:13:21,620 --> 00:13:26,380 Their main industry, a commercial fishery, collapsed less than two years 185 00:13:26,380 --> 00:13:29,120 after a catastrophic salmon die -off. 186 00:13:29,660 --> 00:13:36,200 You have the perfect storm, really, of collapse of the food chain, then you 187 00:13:36,200 --> 00:13:39,900 the lack of any meaningful development of any kind on the reservation. 188 00:13:40,260 --> 00:13:45,540 Scott Tucker came across initially, we want to help the people. 189 00:13:46,160 --> 00:13:52,110 As Adams recalls, The business that Tucker proposes at first sounds like a 190 00:13:52,570 --> 00:13:57,050 He invites her and the tribe's leaders to his office in Kansas, where he makes 191 00:13:57,050 --> 00:13:58,970 an apparent effort to wow them. 192 00:14:00,410 --> 00:14:06,190 Mr. Tucker flew us out in his Learjet. We landed at the airport, and a car 193 00:14:06,190 --> 00:14:10,050 picked us up and took us to this beautiful building. 194 00:14:10,270 --> 00:14:13,410 All of a sudden, this is real. Look at the successful... 195 00:14:13,840 --> 00:14:19,440 Look at this number of people that he's employed. So this is a big operation. 196 00:14:20,000 --> 00:14:25,560 But Adams says once they get past the razzle -dazzle, including a flashy video 197 00:14:25,560 --> 00:14:29,600 presentation and a barbecue lunch, there's a catch. 198 00:14:30,140 --> 00:14:35,140 What Tucker and his team are pitching them now isn't a bank, but a so -called 199 00:14:35,140 --> 00:14:37,220 lending office on Yurok soil. 200 00:14:37,660 --> 00:14:40,800 Its main function would be to receive incoming mail. 201 00:14:41,200 --> 00:14:43,660 and forward it to Tucker's headquarters in Kansas. 202 00:14:44,120 --> 00:14:48,680 Now all of a sudden, we've got a building with a couple tribal members 203 00:14:48,680 --> 00:14:51,720 envelopes. I'm like, what's up with this? 204 00:14:52,200 --> 00:14:56,920 One of Tucker's lawyers allegedly describes the tribe's role as something 205 00:14:56,920 --> 00:14:58,900 an offshore bank account. 206 00:14:59,340 --> 00:15:03,040 You're using the term offshore bank account. You're talking about a mere 207 00:15:03,040 --> 00:15:06,900 presence and not an actual real functioning business. 208 00:15:07,540 --> 00:15:09,040 Smacks of money laundering. 209 00:15:10,410 --> 00:15:16,890 Tucker promises the Yuroks monthly payments of $12 ,500 if they sign the 210 00:15:17,490 --> 00:15:19,130 The Yuroks fly home. 211 00:15:19,630 --> 00:15:22,590 But the proposal ultimately goes nowhere. 212 00:15:23,430 --> 00:15:28,970 As hard -pressed as the Yuroks are, the tribal council never finalizes the deal, 213 00:15:29,170 --> 00:15:30,910 much to Tucker's dismay. 214 00:15:31,150 --> 00:15:32,530 He was not happy. 215 00:15:32,910 --> 00:15:34,670 Well, I'm offering you all this money. 216 00:15:35,070 --> 00:15:37,950 Why aren't you going to just instantly approve it? 217 00:15:38,600 --> 00:15:43,680 The following year, Scott Tucker finally lands his third tribal partner, the 218 00:15:43,680 --> 00:15:45,020 Santee Sioux of Nebraska. 219 00:15:45,760 --> 00:15:50,020 He's confident that the Native American tribes will provide the cover his 220 00:15:50,020 --> 00:15:51,020 business needs. 221 00:15:51,340 --> 00:15:55,300 And with the tens of millions of dollars that he's making, he can afford an 222 00:15:55,300 --> 00:15:59,000 expensive new hobby, professional sports car racing. 223 00:15:59,960 --> 00:16:04,620 At that point in my life, I actually had the time and I had the resources just 224 00:16:04,620 --> 00:16:05,620 to give it a try. 225 00:16:06,400 --> 00:16:11,080 Money can buy you a lot, and when it comes to sports, sure, you can own an 226 00:16:11,080 --> 00:16:14,000 team, but you're not going to be the one throwing the ball on Sunday. 227 00:16:14,980 --> 00:16:15,980 Racing is different. 228 00:16:16,040 --> 00:16:20,140 It gives you the opportunity to spend your money and be a part of the team. 229 00:16:21,320 --> 00:16:25,840 Tucker launches his very own team and calls it Level 5 Motorsports. 230 00:16:26,540 --> 00:16:31,160 At age 44, he joins the ranks of so -called Gentleman Drivers. 231 00:16:31,720 --> 00:16:35,920 wealthy amateurs that bankroll teams and trains to race competitively. 232 00:16:36,700 --> 00:16:40,300 Endurance car racing is so much more interesting to watch when you know that 233 00:16:40,300 --> 00:16:43,960 any given point, one of those four drivers during a driver change is going 234 00:16:43,960 --> 00:16:48,600 someone that has been on the track for X amount of time as opposed to a pro. 235 00:16:48,940 --> 00:16:51,040 It really brings a human element to the sport. 236 00:16:52,079 --> 00:16:57,240 Like other gentlemen drivers, Tucker's goal is to qualify to race at the most 237 00:16:57,240 --> 00:17:02,440 prestigious events, from 24 hours of Daytona to Le Mans in France. 238 00:17:02,820 --> 00:17:08,280 As owner of Level 5 Motorsports, he spares no expense assembling the best 239 00:17:08,700 --> 00:17:11,900 pit crews, and professional drivers that money can buy. 240 00:17:12,400 --> 00:17:16,359 These cars aren't cheap. You know, a Ferrari could be $240 ,000, half a 241 00:17:16,380 --> 00:17:17,339 a million dollars. 242 00:17:17,339 --> 00:17:21,660 I mean, a set of tires in one season could be $2 ,500 for a set, and then you 243 00:17:21,660 --> 00:17:24,780 times that by 30, and that's $75 ,000 just on tires. 244 00:17:25,000 --> 00:17:29,440 You're constantly spending money for something that you might win the race, 245 00:17:29,440 --> 00:17:33,780 that's all you get. These guys want to be the best, and Scott was one of them. 246 00:17:34,520 --> 00:17:40,260 Next on American Green, Scott Tucker flaunts his turbocharged fortune at the 247 00:17:40,260 --> 00:17:43,620 expense of consumers who are struggling to get by. 248 00:17:44,200 --> 00:17:47,840 They took the entire paycheck and left me down to zero. I think I was so 249 00:17:47,840 --> 00:17:49,420 overwhelmed, I just was giving up. 250 00:18:03,500 --> 00:18:08,820 By the mid -2000s, Scott Tucker leads one of the most profitable outfits in 251 00:18:08,820 --> 00:18:10,520 online consumer loan industry. 252 00:18:11,220 --> 00:18:12,540 The problem is... 253 00:18:12,890 --> 00:18:16,230 He's dodging regulators and ripping off millions of consumers. 254 00:18:17,050 --> 00:18:22,210 Yes, he is giving payday loans, but he was doing something much more 255 00:18:23,270 --> 00:18:26,530 Tucker's thing was just more of a straight -up scam. 256 00:18:26,770 --> 00:18:30,010 They're truly trying to trick the people who are borrowing. 257 00:18:31,030 --> 00:18:33,310 Thank you for calling 500 -5 cash. 258 00:18:33,590 --> 00:18:38,070 Customer service calls recorded by Tucker's company reveal a disturbing 259 00:18:38,650 --> 00:18:44,190 Time after time, consumers fail to understand how the loans work until it's 260 00:18:44,190 --> 00:18:50,050 late. It looks like you have an amount due of $80 since November the 7th. I 261 00:18:50,050 --> 00:18:53,870 borrowed, no, this is the thing, I only borrowed $200 and you guys have already 262 00:18:53,870 --> 00:18:56,490 taken $445 out of my account. 263 00:18:56,870 --> 00:19:01,430 The manner in which Scott Tucker marketed and delivered these loans to 264 00:19:01,430 --> 00:19:04,990 was deliberately designed to confuse consumers. 265 00:19:06,120 --> 00:19:10,020 You're not notifying me? You're just taking all this money out? And when you 266 00:19:10,020 --> 00:19:12,580 could have easily have paid off my loan a long time ago? 267 00:19:12,900 --> 00:19:17,380 You agreed to us debiting the service charge fee. You did not notify us that 268 00:19:17,380 --> 00:19:18,400 wanted to pay in full. 269 00:19:18,900 --> 00:19:19,900 Yes, I did. 270 00:19:22,280 --> 00:19:28,340 The Federal Trade Commission says the online contract that Tucker uses 271 00:19:28,340 --> 00:19:29,980 federal law in several ways. 272 00:19:30,400 --> 00:19:34,280 First, the TILA box, or Truth in Lending Act box. 273 00:19:34,830 --> 00:19:39,110 which requires lenders to disclose exactly how much the loan will cost, is 274 00:19:39,110 --> 00:19:43,010 misleading, according to lead attorney Nikhil Singhvi. 275 00:19:43,250 --> 00:19:48,530 For a $300 loan, which is the most common one, the loan was supposed to 276 00:19:48,530 --> 00:19:55,050 $390. So you would have an APR, you would have a $300 amount financed, 277 00:19:55,090 --> 00:20:00,050 you'd have a $90 finance charge, and you have $390 in total payments. 278 00:20:00,490 --> 00:20:02,970 That's the takeaway that consumers would get. 279 00:20:04,899 --> 00:20:09,000 However, buried in the fine print below is a whole different story. 280 00:20:09,260 --> 00:20:14,680 It says that the loan will be automatically renewed unless the 281 00:20:14,680 --> 00:20:17,560 the company not to do so by the first due date. 282 00:20:18,100 --> 00:20:23,180 In fact, the loan will be automatically renewed for the first four pay dates, 283 00:20:23,380 --> 00:20:27,460 costing an additional $90 in finance charges each time. 284 00:20:27,920 --> 00:20:32,740 At which point you will have paid $360 in finance charges only. 285 00:20:33,310 --> 00:20:37,290 And it comes as a big shock to consumers when they find out that all that money 286 00:20:37,290 --> 00:20:40,690 has gone to finance charges and none of it's gone to repay their loans. 287 00:20:40,910 --> 00:20:46,150 From there, the principal gets repaid in $50 increments while incurring even 288 00:20:46,150 --> 00:20:49,430 more finance charges until the debt is clear. 289 00:20:49,790 --> 00:20:55,310 As far as I knew, frickin' Thursday, the damn loan was going to be paid off. So 290 00:20:55,310 --> 00:20:59,950 I ain't even paid nothing towards them. I've paid you almost $400 and ain't not 291 00:20:59,950 --> 00:21:01,230 a dime gone towards the loan? 292 00:21:01,570 --> 00:21:02,570 Correct, sir. 293 00:21:02,670 --> 00:21:05,190 These are people that are really stuck on hard times. 294 00:21:05,490 --> 00:21:11,270 And to experience alone what they thought was going to cost them $90, but 295 00:21:11,270 --> 00:21:16,410 fact cost them hundreds and hundreds of dollars, it's just devastating for them. 296 00:21:21,710 --> 00:21:26,710 Angela Vanderhoof, a state employee living on a tight budget, is among those 297 00:21:26,710 --> 00:21:27,710 get blindsided. 298 00:21:28,400 --> 00:21:34,120 She takes out a $400 loan from One Click Cash, one of the online lenders under 299 00:21:34,120 --> 00:21:35,120 Tucker's umbrella. 300 00:21:35,780 --> 00:21:40,280 I'd gotten behind on bills. A car payment needed to be made, and so I 301 00:21:40,280 --> 00:21:41,820 something right now. 302 00:21:42,020 --> 00:21:48,240 The contract, it appears, obligates her to pay back a total of $520, which she 303 00:21:48,240 --> 00:21:49,139 agrees to. 304 00:21:49,140 --> 00:21:53,180 She says that One Click Cash withdraws close to that amount from her bank 305 00:21:53,180 --> 00:21:55,260 account over the next two months. 306 00:21:55,930 --> 00:21:59,890 I thought I was getting to the point of being able to pay that off. 307 00:22:00,550 --> 00:22:04,770 But then she experiences a traumatic event that upends her life. 308 00:22:05,530 --> 00:22:09,870 I was assaulted and 309 00:22:09,870 --> 00:22:16,750 severely battered for the most part. The assault was 310 00:22:16,750 --> 00:22:19,630 fairly violent and using of a stun gun. 311 00:22:20,170 --> 00:22:25,850 So I had shattered fingertips and 14 stitches to kind of put me back 312 00:22:25,990 --> 00:22:28,810 and I had to take a leave of absence from work. 313 00:22:29,070 --> 00:22:34,010 Faced with no income for the next month, she calls One Click Cash and asks for 314 00:22:34,010 --> 00:22:35,850 an extension on her next payment. 315 00:22:36,230 --> 00:22:41,810 When I spoke to them, they were very considerate. They were understanding. I 316 00:22:41,810 --> 00:22:45,310 felt pretty confident when I got off the phone that they were going to help me 317 00:22:45,310 --> 00:22:46,310 out. 318 00:22:46,600 --> 00:22:50,760 Four days later, however, one -click cash withdraws everything that's left in 319 00:22:50,760 --> 00:22:55,420 her account, and it also costs her an overdraft fee. She contacts them 320 00:22:55,420 --> 00:22:59,800 immediately. Basically, it was, but you owe the money, so we're going to keep 321 00:22:59,800 --> 00:23:04,660 trying until we get it. I even went so far as to request a supervisor and was 322 00:23:04,660 --> 00:23:07,020 refused and then hung up on. 323 00:23:07,920 --> 00:23:12,940 They make eight more attempts to withdraw money, jacking up her overdraft 324 00:23:13,500 --> 00:23:17,300 By the time she goes back to work and receives her next paycheck, they strike 325 00:23:17,300 --> 00:23:22,200 again. They took the entire paycheck and left me down to zero. I think I was so 326 00:23:22,200 --> 00:23:23,780 overwhelmed, I just was giving up. 327 00:23:24,380 --> 00:23:30,920 Once I was mentally in a better space to kind of assess the damage and came to 328 00:23:30,920 --> 00:23:36,540 realize just how much it had cost me, it was like astronomical by the end 329 00:23:36,540 --> 00:23:37,540 result. 330 00:23:37,900 --> 00:23:41,100 Angela discovers that she's paid them $1 ,300. 331 00:23:42,350 --> 00:23:45,670 More than three times the amount of her original $400 loan. 332 00:23:45,990 --> 00:23:50,790 They've also cost her an additional $200 in bank overdraft fees. 333 00:23:51,370 --> 00:23:55,470 They just kind of turned into piranha and just attacked my account. 334 00:23:56,670 --> 00:24:03,090 Like Angela, approximately 60 % of Tucker's customers fall into the same 335 00:24:03,090 --> 00:24:04,770 automatic loan renewals. 336 00:24:05,590 --> 00:24:10,570 When I started going back to my bank statements, 337 00:24:11,690 --> 00:24:16,530 And started adding up the money. I said, they've been paid more than enough 338 00:24:16,530 --> 00:24:18,290 money by now. 339 00:24:19,170 --> 00:24:21,930 Then you get frustrated. Then you get angry. 340 00:24:22,570 --> 00:24:29,570 And it's very disturbing. Out of a $250 loan, they stole approximately 341 00:24:29,570 --> 00:24:31,450 $1 ,000 from me. 342 00:24:32,250 --> 00:24:37,110 There's no question that caused a lot of consumer harm and put a lot of money in 343 00:24:37,110 --> 00:24:38,150 Scott Tucker's pockets. 344 00:24:38,430 --> 00:24:39,530 This was... 345 00:24:39,850 --> 00:24:44,190 the way they intended the business to run, and it was an important profit 346 00:24:44,190 --> 00:24:45,190 for them. 347 00:24:45,330 --> 00:24:49,370 He robbed from the poor to have a rich lifestyle. 348 00:24:50,030 --> 00:24:52,110 He didn't give a damn about anybody. 349 00:24:53,890 --> 00:25:00,170 Next on American Greed, a relentless prosecutor wages a seven -year battle to 350 00:25:00,170 --> 00:25:01,590 stop Scott Tucker. 351 00:25:01,790 --> 00:25:06,370 If he was a legitimate businessman, why would he have gone to such great pains 352 00:25:06,370 --> 00:25:08,310 to conceal himself? 353 00:25:22,030 --> 00:25:26,810 In Denver, the Colorado Attorney General's office begins investigating 354 00:25:26,810 --> 00:25:30,910 online lending companies operating illegally in the state. 355 00:25:31,270 --> 00:25:37,370 Neither lender, cash advance nor preferred cash loans, is licensed to do 356 00:25:37,370 --> 00:25:38,370 business in Colorado. 357 00:25:38,650 --> 00:25:44,910 In November 2004, Assistant Attorney General Paul Chesson writes cease and 358 00:25:44,910 --> 00:25:46,550 desist letters to the companies. 359 00:25:46,870 --> 00:25:51,940 His only tangible lead... is that both have mailing addresses in Carson City, 360 00:25:52,060 --> 00:25:53,060 Nevada. 361 00:25:53,200 --> 00:25:55,920 Cash Advance did not respond to that letter. 362 00:25:56,720 --> 00:26:01,480 Preferred Cash did. Basically, it was a blow -off. I needed to get some more 363 00:26:01,480 --> 00:26:03,740 information as to who these lenders were. 364 00:26:03,940 --> 00:26:07,740 I needed some flesh and blood behind these names. 365 00:26:08,640 --> 00:26:12,780 Chesson subpoenas both lenders for their corporate records, but neither 366 00:26:12,780 --> 00:26:17,120 complies. So he contacts the Nevada Attorney General's office for help. 367 00:26:18,170 --> 00:26:21,410 What are these addresses, and what can we learn? 368 00:26:21,850 --> 00:26:25,930 Turns out these addresses were mail drops. 369 00:26:26,590 --> 00:26:32,770 The mail drops belonged to two different Nevada firms, CB Service Corp. and 370 00:26:32,770 --> 00:26:34,470 Executive Global Management. 371 00:26:34,930 --> 00:26:38,530 Both share the same officer, James Fontano. 372 00:26:38,790 --> 00:26:44,330 I had thought that Mr. Fontano was the man behind the curtain. 373 00:26:44,550 --> 00:26:47,390 So with that information, I went. 374 00:26:47,720 --> 00:26:49,860 into court and got the contempt citation. 375 00:26:50,240 --> 00:26:56,280 And these companies had to be in court at a date certain, July of 2005. 376 00:26:58,100 --> 00:27:02,600 Two days before the court date, however, Chesson gets thrown for the loop. 377 00:27:02,860 --> 00:27:07,260 He received a call from an attorney claiming that two Native American 378 00:27:07,680 --> 00:27:12,800 the Miami tribe of Oklahoma and the Santee Sioux of Nebraska, are the actual 379 00:27:12,800 --> 00:27:16,000 owners of cash advance and preferred cash loans. 380 00:27:16,750 --> 00:27:20,030 And he said, so we're going to move to dismiss your contempt citation. 381 00:27:20,330 --> 00:27:23,890 You can't touch us. You can't touch the Indian tribes due to something called 382 00:27:23,890 --> 00:27:24,910 tribal sovereign immunity. 383 00:27:25,230 --> 00:27:30,330 It just didn't sound right. How would these tribes have found out about this 384 00:27:30,330 --> 00:27:32,730 proceeding? It just smells. 385 00:27:33,690 --> 00:27:39,550 At the same time, both Nevada firms tied to James Fontanone, CB Service Corp., 386 00:27:39,550 --> 00:27:44,650 and Executive Global Management deny having anything to do with payday 387 00:27:46,250 --> 00:27:50,690 Chesson demands that the tribes and the Nevada companies produce proof to 388 00:27:50,690 --> 00:27:51,710 support their claims. 389 00:27:52,130 --> 00:27:53,130 But they refuse. 390 00:27:54,130 --> 00:27:58,130 The tribes, not only would they not give us any information, but they said that 391 00:27:58,130 --> 00:28:02,290 we don't have to give you information because we're immune from soup. 392 00:28:03,270 --> 00:28:07,390 Chesson spends the next two years locked in legal battle with them. 393 00:28:08,030 --> 00:28:14,010 Until March 2007, when the elusive James Fontano finally agrees to talk. 394 00:28:17,220 --> 00:28:22,400 Fontano, just released from federal prison for tax fraud, reveals the truth 395 00:28:22,400 --> 00:28:25,120 about cash advance and preferred cash loans. 396 00:28:25,900 --> 00:28:32,340 Mr. Fontano basically said, hey, I am really not the president. I don't have 397 00:28:32,340 --> 00:28:33,940 day -to -day business operations. 398 00:28:34,300 --> 00:28:39,360 I just do what Mr. Tucker tells me to do. Mr. Tucker is actually the one who's 399 00:28:39,360 --> 00:28:40,740 running these lenders. 400 00:28:41,660 --> 00:28:45,320 It's the first that Chesson's ever heard of Scott Tucker. 401 00:28:45,960 --> 00:28:50,380 As Fontana would later testify at trial, Tucker paid him to set up shell 402 00:28:50,380 --> 00:28:52,500 companies with mail drops in Nevada. 403 00:28:52,760 --> 00:28:57,400 It's a service that Fontana provides to hundreds of clients, and it's perfectly 404 00:28:57,400 --> 00:28:58,540 legal in Nevada. 405 00:28:59,460 --> 00:29:03,940 He would testify that all of the mail that went to cash advance and preferred 406 00:29:03,940 --> 00:29:07,980 cash loans was then forwarded to Tucker's office in Kansas. 407 00:29:08,940 --> 00:29:13,500 Fontana is never convicted of any crime in connection with Tucker's scam. 408 00:29:14,160 --> 00:29:18,520 The structure that Tucker set up was really elaborate. He had a front 409 00:29:18,580 --> 00:29:20,480 and then he had a fake CEO for that. 410 00:29:20,680 --> 00:29:25,060 And then he had these payday lending brands on top of that. 411 00:29:25,320 --> 00:29:30,480 The more companies he would set up, the harder it would be for a consumer or for 412 00:29:30,480 --> 00:29:32,540 a regulator to find him. 413 00:29:33,680 --> 00:29:39,020 Armed with this new information, Chesson subpoenas Scott Tucker, who fails to 414 00:29:39,020 --> 00:29:40,620 appear in court for a summons. 415 00:29:41,400 --> 00:29:45,720 So a Denver judge issues a warrant for Tucker's arrest in May 2008. 416 00:29:46,940 --> 00:29:52,660 The warrant is enforceable only in Colorado, giving Tucker ample reason to 417 00:29:52,660 --> 00:29:57,780 away. But he's brazen enough to practically dare authorities to catch 418 00:29:58,000 --> 00:30:02,360 During that time that the state was going after him, he actually bought... 419 00:30:02,600 --> 00:30:06,840 an $8 million house in Aspen, Colorado, and would fly his private jet into 420 00:30:06,840 --> 00:30:10,920 Colorado. And he was racing in Colorado, so he clearly was not concerned. 421 00:30:13,260 --> 00:30:18,920 Instead, Tucker appears more worried about another threat, a lawsuit filed by 422 00:30:18,920 --> 00:30:22,760 the so -called godfather of payday loans, Charles Hallinan. 423 00:30:23,740 --> 00:30:28,740 Hallinan, who launched a 50 -50 joint venture with Tucker 11 years earlier, 424 00:30:29,360 --> 00:30:33,400 claims that his former protege has been cheating him out of his share of the 425 00:30:33,400 --> 00:30:34,400 profits. 426 00:30:34,660 --> 00:30:39,600 Charles Hallinan got wind of the fact that the checks he was getting didn't 427 00:30:39,600 --> 00:30:43,680 actually reflect half of Tucker's entire business. That was obviously a very 428 00:30:43,680 --> 00:30:49,200 problematic lawsuit for Tucker, a lawsuit about who really owned his 429 00:30:49,200 --> 00:30:51,000 with possibilities of discovery. 430 00:30:51,360 --> 00:30:54,660 That's the last thing he wanted when he was in the middle of pretending that 431 00:30:54,660 --> 00:30:57,880 tribes actually owned his business. 432 00:30:59,050 --> 00:31:05,550 So in 2010, Tucker settled out of court with Hallinan for $30 million, but does 433 00:31:05,550 --> 00:31:07,070 not admit any wrongdoing. 434 00:31:07,570 --> 00:31:11,830 While he's ended a lawsuit, he's written emails to Hallinan that will come back 435 00:31:11,830 --> 00:31:12,870 to haunt him in court. 436 00:31:13,410 --> 00:31:18,610 Emails that expose his tribal partnerships as being a total fraud. 437 00:31:19,250 --> 00:31:24,690 Even Tucker, in an unguarded, honest moment, admitted that nothing changed 438 00:31:24,690 --> 00:31:25,690 the business has remained his. 439 00:31:27,120 --> 00:31:32,360 Next on American Greed, a whistleblower makes secret recordings that conceal 440 00:31:32,360 --> 00:31:34,460 Scott Tucker's fate at trial. 441 00:31:34,980 --> 00:31:36,980 But we're laundering money. 442 00:31:37,400 --> 00:31:42,360 It is illegal. That may be true. There is a laundering aspect to it. 443 00:31:47,240 --> 00:31:53,640 Scott Tucker is on a tear. 444 00:31:54,400 --> 00:31:59,440 While the rest of the U .S. economy is struggling in 2010, his payday lending 445 00:31:59,440 --> 00:32:01,120 empire is booming. 446 00:32:01,580 --> 00:32:06,840 Post -2008 was a great time to be in the payday loan business because you had 447 00:32:06,840 --> 00:32:10,560 all these people out of work and desperate for money. That is actually 448 00:32:10,560 --> 00:32:12,540 the golden era for Tucker. 449 00:32:13,600 --> 00:32:18,920 During just the five years from around 2008 to 2012, his businesses pulled in 450 00:32:18,920 --> 00:32:19,920 about $3 .5 billion. 451 00:32:22,320 --> 00:32:27,880 He pulls another fast one on state regulators when he sells his company, 452 00:32:27,880 --> 00:32:32,440 Management, to a tribal entity named AMG Services. 453 00:32:33,180 --> 00:32:37,820 Now, he says, the Native American tribes are the full owners of the operation, 454 00:32:38,040 --> 00:32:41,760 and he's just an employee, but it's all a big charade. 455 00:32:42,220 --> 00:32:47,800 Tucker's Payday Loan Enterprise was pulling in what we estimate about $20 456 00:32:47,800 --> 00:32:50,500 million a month, and yet... 457 00:32:50,810 --> 00:32:55,370 Tucker sold his business to the tribes for $120 ,000. 458 00:32:56,410 --> 00:32:57,630 It was a sham merger. 459 00:32:57,850 --> 00:33:02,450 In fact, no money exchanged hands at the time or for even years later. 460 00:33:03,790 --> 00:33:08,230 Tucker's out flagging his competition on the racetrack as well, as he and his 461 00:33:08,230 --> 00:33:11,010 team, Level 5, continue beefing up their fleet. 462 00:33:11,250 --> 00:33:15,830 They clinch one trophy after the next at races around the world. 463 00:33:16,950 --> 00:33:20,150 People were aware that, you know, he was spending a little more money than... 464 00:33:20,410 --> 00:33:24,290 Your average team, that's kind of what kind of kicked teams out of the series. 465 00:33:24,290 --> 00:33:26,790 mean, you run out of money. You run out of money quickly. 466 00:33:27,070 --> 00:33:29,630 And Scott's team didn't have that problem. 467 00:33:32,770 --> 00:33:38,090 But above everything else that year, Tucker scores his biggest coup of all in 468 00:33:38,090 --> 00:33:39,090 the courtroom. 469 00:33:39,530 --> 00:33:44,090 Paul Chesson and the Colorado Attorney General's office are fighting for access 470 00:33:44,090 --> 00:33:47,310 to the Miami and Santee Sioux Tribe's business records. 471 00:33:48,720 --> 00:33:52,080 The tribes argue that they're shielded by sovereign immunity. 472 00:33:52,740 --> 00:33:57,800 The battle goes all the way to the Colorado Supreme Court in November 2010, 473 00:33:58,200 --> 00:34:01,780 where the court decides in favor of the tribes. 474 00:34:02,360 --> 00:34:09,100 That basically stopped our investigation until our case came to an ignominious 475 00:34:09,100 --> 00:34:14,040 end. As the tribes would later admit to federal authorities, they submitted 476 00:34:14,040 --> 00:34:16,360 false information to the courts. 477 00:34:16,739 --> 00:34:17,739 They won. 478 00:34:18,320 --> 00:34:20,560 By lying to the court about who they were. 479 00:34:20,780 --> 00:34:24,360 They said it's us, we're the ones making the payday loans, we're in charge of 480 00:34:24,360 --> 00:34:27,000 it. You know, it was working. The whole thing was working. 481 00:34:27,719 --> 00:34:30,639 Nevertheless, Tucker's victory proves fleeting. 482 00:34:31,760 --> 00:34:35,000 Because the feds are getting ready to drop a hammer on him. 483 00:34:35,860 --> 00:34:42,600 What Colorado did, it laid the groundwork for the federal agencies to 484 00:34:42,600 --> 00:34:43,920 ball and run with it. 485 00:34:46,730 --> 00:34:51,929 In April 2012, the Federal Trade Commission launches a civil suit against 486 00:34:51,929 --> 00:34:57,930 and his enterprise and requests a court -ordered freeze on his lending services. 487 00:34:58,990 --> 00:35:03,310 Our main concern here was that the loans were deceptive. The loan document was 488 00:35:03,310 --> 00:35:06,370 deceptive. It was harming consumers in astronomical numbers. 489 00:35:08,490 --> 00:35:11,570 Undaunted, Tucker vows to fight the FTC. 490 00:35:12,370 --> 00:35:15,750 But other people tangled up in his web are alarmed. 491 00:35:16,620 --> 00:35:20,220 One of them is a paralegal that works for the Miami tribe. 492 00:35:20,840 --> 00:35:26,520 She believes that Tucker's using the tribe to launder money and putting them 493 00:35:26,520 --> 00:35:27,520 legal jeopardy. 494 00:35:28,180 --> 00:35:33,020 Her name is Carolyn Williams, and she begins secretly recording her 495 00:35:33,020 --> 00:35:38,280 conversations with her boss, Don Brady, who runs the tribe's business arm. 496 00:35:38,860 --> 00:35:42,400 He's also been implicated in the FTC suit. 497 00:35:43,370 --> 00:35:48,370 We open those accounts in our name and then we hold his money to keep him from 498 00:35:48,370 --> 00:35:52,490 paying taxes on it. But that money is owed to him. It's his money. 499 00:35:52,970 --> 00:35:54,730 But we're laundering money. 500 00:35:55,330 --> 00:36:00,130 Well, that may be true. That may be true. There is a laundering aspect to 501 00:36:00,330 --> 00:36:05,770 Okay. But the business model is what it is. What these recordings did was they 502 00:36:05,770 --> 00:36:10,950 showed that it wasn't just Tucker who knew that this tribal relationship was 503 00:36:10,950 --> 00:36:11,950 sham. 504 00:36:12,570 --> 00:36:13,570 Everybody knew. 505 00:36:13,750 --> 00:36:15,890 100 % ownership, wholly owned. 506 00:36:16,110 --> 00:36:19,750 None of that's true. Every declaration that you signed, that the chief signed, 507 00:36:19,890 --> 00:36:20,890 none of it's true. 508 00:36:22,210 --> 00:36:26,930 Well, I'm telling you, how do you sleep at night knowing this stuff? 509 00:36:27,510 --> 00:36:29,130 I sleep just fine, honey. 510 00:36:30,390 --> 00:36:35,870 Williams' protests go unheeded. But her recordings will be introduced at trial. 511 00:36:36,810 --> 00:36:38,530 Because by 2014... 512 00:36:39,370 --> 00:36:44,250 Federal investigators are mounting a criminal case and tribal sovereignty 513 00:36:44,250 --> 00:36:46,010 protect anyone this time. 514 00:36:46,570 --> 00:36:48,790 There was kind of nowhere to hide at that point. 515 00:36:49,210 --> 00:36:55,890 When American Green returns, Scott Tucker is losing control and bracing for 516 00:36:55,890 --> 00:37:02,370 impact. When the government has the eye on you and they snare you, you're not 517 00:37:02,370 --> 00:37:03,370 getting out. 518 00:37:15,080 --> 00:37:20,080 After amassing a payday lending empire worth billions, by February 2016, 519 00:37:20,820 --> 00:37:23,880 Scott Tucker is facing the end of his reign. 520 00:37:24,680 --> 00:37:29,680 Federal agents arrest him at his home outside Kansas City and charge him with 521 00:37:29,680 --> 00:37:33,100 counts of racketeering, fraud, and money laundering. 522 00:37:33,640 --> 00:37:38,000 The U .S. Attorney's Office in the Southern District of New York is 523 00:37:38,000 --> 00:37:39,000 the case. 524 00:37:44,410 --> 00:37:46,350 to prosecute mafia loan sharks. 525 00:37:47,030 --> 00:37:52,350 There is a part of the racketeering laws which prohibits anyone from operating a 526 00:37:52,350 --> 00:37:57,310 business that extends loans at more than twice the rates allowed under state 527 00:37:57,310 --> 00:38:01,090 law. The fact that there was a federal statute gave us an opportunity to 528 00:38:01,090 --> 00:38:02,090 investigate what he was doing. 529 00:38:04,850 --> 00:38:09,690 He's also able to subpoena the Native American tribes tied to Tucker because 530 00:38:09,690 --> 00:38:12,870 federal law takes precedence over tribal sovereign immunity. 531 00:38:14,320 --> 00:38:18,400 Tucker, who's been hiding behind one business front after another for more 532 00:38:18,400 --> 00:38:21,940 15 years, is completely exposed now. 533 00:38:22,580 --> 00:38:27,800 If you look at his career in the 90s through 2012, it's obviously at the 534 00:38:27,800 --> 00:38:31,380 level just the willingness to lie to get people's money. 535 00:38:33,880 --> 00:38:38,440 Besides being under criminal indictment, he's fighting a civil lawsuit filed by 536 00:38:38,440 --> 00:38:39,440 the Federal Trade Commission. 537 00:38:40,880 --> 00:38:45,880 The FTC's goal is to recover the money that Tucker allegedly swindled from 538 00:38:45,880 --> 00:38:46,880 consumers. 539 00:38:47,580 --> 00:38:54,560 The government claims that from 2008 to 2012, he built more than $1 billion out 540 00:38:54,560 --> 00:38:56,980 of 4 .5 million customers. 541 00:38:57,720 --> 00:39:03,480 We had every transaction, and we were able to calculate with absolute 542 00:39:03,480 --> 00:39:07,940 how many consumers paid more than they were told they were going to pay and 543 00:39:07,940 --> 00:39:10,080 exactly how much they paid. 544 00:39:10,520 --> 00:39:12,280 And that was the $1 .3 billion number. 545 00:39:16,040 --> 00:39:17,920 In September 2016, 546 00:39:18,800 --> 00:39:20,980 Tucker suffers a massive defeat. 547 00:39:21,400 --> 00:39:25,280 A federal judge ordering race car driver Scott Tucker and several consumer 548 00:39:25,280 --> 00:39:29,780 lending companies he manages to pay nearly $1 .3 billion to the FTC. 549 00:39:30,240 --> 00:39:35,740 The $1 .3 billion was the highest litigated recovery in FTC history. 550 00:39:37,320 --> 00:39:42,240 One year later, his criminal case goes to trial, and a federal jury finds him 551 00:39:42,240 --> 00:39:47,020 guilty on all 14 counts of racketeering, fraud, and money laundering. 552 00:39:47,300 --> 00:39:51,660 I would have never, ever imagined anything like this. 553 00:39:52,000 --> 00:39:57,360 Tucker seems unrepentant to the very end. He records this interview for a 554 00:39:57,360 --> 00:40:03,960 podcast series called Prison Professors in December 2017 while he's under house 555 00:40:03,960 --> 00:40:05,660 arrest and awaiting sentencing. 556 00:40:06,510 --> 00:40:11,350 If you're super successful and there's a lot of money involved, there's a good 557 00:40:11,350 --> 00:40:14,350 chance you're going to turn off some of the jurors. No doubt about it. 558 00:40:15,690 --> 00:40:22,530 I'm not a psychologist, but my guess is that many criminals and sociopaths 559 00:40:22,530 --> 00:40:24,330 rationalize their behavior. 560 00:40:24,970 --> 00:40:25,990 Tucker's no different. 561 00:40:27,970 --> 00:40:32,170 He's sentenced to 16 years and eight months in federal prison. 562 00:40:33,000 --> 00:40:37,640 Tucker declined repeated requests to be interviewed by American Greed. He is 563 00:40:37,640 --> 00:40:39,580 currently appealing his case. 564 00:40:40,500 --> 00:40:46,260 The Miami tribe, the Murdoch tribe, and the Santee Sioux are not charged and 565 00:40:46,260 --> 00:40:48,520 enter non -prosecution agreements with the government. 566 00:40:49,260 --> 00:40:53,940 They admit their part in Tucker's scheme and forfeit the money he stashed in 567 00:40:53,940 --> 00:40:54,940 their accounts. 568 00:40:55,000 --> 00:40:58,320 They also declined to be interviewed by American Greed. 569 00:40:59,840 --> 00:41:05,820 Tucker's mentor, Charles Hallinan, is serving 14 years in federal prison for a 570 00:41:05,820 --> 00:41:07,440 separate payday lending scheme. 571 00:41:10,320 --> 00:41:16,940 In September 2018, the FTC begins sending refund checks to more than one 572 00:41:16,940 --> 00:41:20,240 consumers harmed by Tucker's predatory loans. 573 00:41:20,660 --> 00:41:26,520 The government's recovered and repaid a total of $505 million so far. 574 00:41:26,880 --> 00:41:31,040 What this guy was doing was he was going after people who had to... 575 00:41:31,690 --> 00:41:35,490 turned to the internet to borrow $300 to get through the week. 576 00:41:35,730 --> 00:41:37,270 And he was stealing their money. 577 00:41:38,350 --> 00:41:43,570 It must be nice, you know, to be able to live that lavish life and be able to go 578 00:41:43,570 --> 00:41:47,450 through those things when realistically I was struggling from day to day. 579 00:41:47,730 --> 00:41:53,510 And what they took from me was just supplying him even more to do these 580 00:41:53,510 --> 00:41:55,950 things that anyone else would ever dream of doing. 581 00:41:58,410 --> 00:42:03,030 Right is right and wrong is wrong. And how dare he? 582 00:42:03,510 --> 00:42:05,630 But I will say this. 583 00:42:06,170 --> 00:42:09,470 What goes around comes around. 584 00:42:10,530 --> 00:42:14,710 And karma is what it is.