Ferrari-racing payday loan mogul Scott Tucker is one of three men facing racketeering charges in a federal crackdown on the short-term loan industry that charges millions of poor people annual interest rates that sometimes exceeded 700 percent.

The U.S. is attempting to seize at least $2 billion from Tucker, including a property in Aspen, Colorado, a Learjet, six Ferraris and four Porsches, claiming they were bought with proceeds of crime.

Federal Bureau of Investigation agents arrested Tucker and Timothy Muir, a lawyer who worked with him, in Kansas City, Kansas, on Wednesday. Separately, Richard Moseley Sr., owner and operator of a group of payday-lending businesses based in Kansas City, Missouri, is also accused of being a part of a criminal organization whose members engaged in crimes including the collection of unlawful debts.

“Innocent people throughout the country were deprived of the opportunity to regain their financial well-being as a result of this conspiracy,” Diego Rodriguez, assistant director-in- charge of the FBI’s New York office, said in a statement announcing the charges against Moseley. “Today, we issue a stop payment on Moseley’s fraudulent scheme.”


20-Year Maximums


Paul Shechtman, a lawyer for Tucker, Thomas Bath, a lawyer for Muir, and Marilyn Brady Keller, a lawyer for Moseley, didn’t respond to voicemail messages seeking comment on the allegations. All three defendants face charges that include racketeering-conspiracy and violations of collecting unlawful debts, which carry terms of as long as 20 years in prison.

They’re also accused of using misleading contracts and lying about their operations’ locations.

Moseley appeared before a federal magistrate in Kansas and was released on bail. He’s scheduled to appear next before a judge in Manhattan. Tucker and Muir were also released on bail.

Tucker’s operation generated more than $2 billion in revenue and he pocketed hundreds of millions of dollars, according to prosecutors who plan to ask a federal judge to freeze assets and order all that money to be forfeited. In a separate case last year, lenders affiliated with Tucker that operated under Native American tribal sovereignty paid $21 million and waived $285 million in charges to settle federal claims.


Organized Crime


Online lenders have proven difficult for states to shut down because they often operate outside their jurisdictions with different or non-existent regulations. The Racketeer Influenced and Corrupt Organizations Act, or RICO, was enacted in 1970 to target the Mafia and other organized crime groups and gives prosecutors more time to go after wrongdoers and sets stiffer penalties.

Moseley, for example, moved his operations overseas, first to the Caribbean island of Nevis and later to New Zealand, and claimed the company couldn’t be sued or prosecuted because they were outside U.S. jurisdiction, according to the indictment. His whole business, including bank accounts, were at his offices in Missouri, prosecutors said.


Tribal Immunity


Tucker pioneered the use of Native American sovereign tribal immunity to avoid state regulation with one of his affiliates, AMG Services Inc. Tucker worked with a number of tribes, especially the Miami Tribe of Oklahoma.

In a protracted court battle with the state of Colorado, the Miami nation claimed that it owned AMG Services, that Tucker was its employee, and that under the principle of sovereign immunity, states couldn’t regulate the venture.

Muir, acting as Tucker’s lawyer, helped the scheme by filing false declarations from tribal representatives claiming ownership of Tucker’s business, according to Manhattan U.S. Attorney Preet Bharara, who filed the charges against all three men.

AMG Services and another Tucker affiliate, MNE Services Inc.’s $21 million settlement was the largest recovery in a payday-lending case brought by the Federal Trade Commission.

Tucker, a resident of Overland Park, Kansas, helped transform payday lending from local, storefront businesses that gave small-dollar, high-interest loans secured with postdated checks into operations with national reach. Tucker’s lenders worked over the Internet and made borrowers sign agreements to deduct loan payments directly from their bank accounts.

He used profits from the payday-lending operation to finance his entry into sports car racing and, according to the FTC, bought luxury cars, private jets and maintained the Colorado home.