A federal judge has ordered Joel Tucker, a Prairie Village man with close ties to the Kansas City payday loan industry, to serve 12.5 years in prison for dodging taxes and for a scheme that targeted them. consumers to pay debts that they often do not owe.
Tucker, who missed his first sentencing hearing which was scheduled for last week and obtained an arrest warrant for him, was brought to justice with restraints tied in his wrists and ankles. United States District Court Judge Roseann Ketchmark ordered that Tucker be taken away by the US Marshals to immediately begin serving his prison sentence.
Tucker was also ordered to pay more than $ 8 million in unpaid taxes he owes to the Internal Revenue Service. Its total tax bill, with penalties and interest, is almost $ 12 million.
Tucker’s jail term exceeded the 135 months in jail, or just over 11 years, that federal prosecutors recommended in their sentencing memorandum. But it was below the 15-year maximum sentence Ketchmark could have issued under federal sentencing guidelines.
Ketchmark appeared particularly troubled that Tucker took out a loan of about $ 20,000 under the Paycheck Protection Program, an initiative to help keep businesses afloat and employees paid during the pandemic of coronavirus, from the same federal government to which Tucker owes millions in taxes and during he was under federal indictment. PPP loan applicants are asked if they are subject to a criminal charge at the time they apply for the loans, to which Tucker replied that he was not when he in fact was. .
“I’m just stunned,” Ketchmark said of Tucker’s getting a PPP loan. “This is outrageous conduct.”
Tucker’s attorney, JR Hobbs, said the PPP loan has been repaid.
Hobbs said after conviction that Tucker accepts responsibility for his crimes.
Tucker spoke briefly to Ketchmark before handing down the sentence.
“I have no one to blame but me,” he said, adding that he wanted to change his life and hoped his consulting business would help.
Hobbs repeated the sentiment – “Mr. Tucker has no one to blame but himself” – and asked for a lower sentence, one in the range of 60 to 87 months. Hobbs added: “Any sentence of prison is difficult to execute. ”
Hobbs mentioned Tucker’s 84-year-old mother who he says needs support, his two grown children and his stepdaughter. He said the letters submitted by friends and family to the court were evidence of acts of kindness and charitable contributions made by Tucker.
The prosecution, led by US attorneys Kate Mahoney and Patrick Daly, argued that Tucker “flouted the laws, blatantly committing fraud over and over again.”
“It was not an error in judgment,” said Mahoney. “It was a way of life.”
Ketchmark expressed sympathy for Tucker’s family, calling them “secondary victims” and saying his children “don’t deserve this”, but said he had “no respect for the law”.
“I don’t know what it takes to make you follow the law and not take money that doesn’t belong to you,” Ketchmark said.
Tucker’s legal team had said, and prosecutors agreed, that he should be given some credit for accepting responsibility. Hobbs said that by pleading guilty he saved the government the expense of what would likely have been a lengthy trial involving witnesses from across the country.
“This is separate from that,” Ketchmark said.
She also pointed out that Tucker received a PPP loan just days before he appeared in court to plead guilty to three counts against him last year, a sign that he had not accepted his responsibility.
“That one lasted $ 20,000 from the federal government when people needed it so badly,” Ketchmark said.
Tucker’s Debt Selling Plan
Tucker is the brother of Scott Tucker, who is serving more than 16 years in prison for running what authorities have called an exploitative payday loan company that has scammed more than 4 million borrowers.
Joel Tucker pleaded guilty last year for his role in a scheme in which he sold consumer data to bill collectors that supposedly reflected unpaid payday lenders’ debts, but was often inaccurate or not. didn’t belong to Tucker in the first place. The result, authorities said, was that consumers faced calls and letters from debt collectors demanding payment of amounts they may not have owed.
Tucker had previously been sued by the Federal Trade Commission in 2017 for the same scheme, which resulted in the FTC obtaining a $ 4 million judgment against him later in the year.
Federal prosecutors said he made $ 7.3 million from the Debt Selling Program, which did not include any expenses on his part because he was selling fictitious or non-his debt.
Tucker’s debt selling program came to light in 2016 when a federal Texas bankruptcy judge investigated the origins of payday loan debts that arose in consumer bankruptcy cases that could not be substantiated. The debt buyers said they bought the debts from a broker, who said they bought them from Tucker.
Tucker was ordered to testify in connection with this investigation. Prosecutors said much of Tucker’s testimony in this case was false.
While Tucker had an unpaid tax bill, federal prosecutors said Tucker led a lavish lifestyle, including private jets, leases for luxury automobiles, fees for a private club in Vail, Colorado, and a credit card bill over $ 682,000.
Tucker once owned a company called eData Solutions, which accepted payday loan applications and sold them to lenders. Payday loans are small loans made to borrowers, often in financial difficulty and with few alternatives for obtaining credit, who charge high interest rates. The industry has a lot of reviews that say payday loans tend to trap the poor and desperate in endless debt cycles.
Tucker and other owners of eData Solutions sold the business to the Wyandotte Tribe of Oklahoma under a purchase agreement whereby the tribe would pay former owners $ 277 million from future profits. generated by eData Solutions.
Hobbs said on Tuesday that the Wyandotte Tribe had broken the purchase contract.
Prosecutors said Tucker used consumer data obtained through eData Solutions and sold it to debt collectors. These debts, prosecutors said, did not belong to Tucker, were not actual debts owed by anyone, or contained false information.
The U.S. Tax Court in 2014 ruled that Tucker and the IRS agreed that Tucker owed $ 8 million – an amount that included unpaid taxes as well as penalties and interest – for the 2007 tax years and 2008.
But as of May, only $ 512 had been applied to that balance, which has since grown to nearly $ 12 million. This payment of $ 512 did not come voluntarily from Tucker, but rather a withdrawal from one of his bank accounts.
Tucker has since told IRS agents he has no income. According to court records, Tucker told an IRS agent on July 28, 2017 that he was borrowing money and trying to start his business. The next day, a friend transferred $ 120,000 to his personal bank account.
While Tucker avoided paying taxes, he spent his own time on indulgences like renting a Ferrari, touring resorts in Colorado and Mexico, and using private jets to get there.