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.

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