In House - The FindLaw Corporate Counsel Blog

GC Convicted in Payday Lending Scheme

One Learjet; an Aspen vacation home; a Ferrari race car and other sports cars. All will be available soon, with one caveat:

They are subject to forfeiture in the convictions of the general counsel and the chief executive officer in a payday loan scam. That's right, payback is a Beemer.

Payday Loans

Timothy Muir, former general counsel of AMG Services, Inc., and ex-CEO Scott Tucker were convicted of 14 counts, including money laundering, wire fraud and violations of racketeering, and lending laws.

According to reports, Muir and Tucker ran payday loan companies and charged borrowers as high as 700 percent interest for short-term loans. U.S. Attorney Joon Kim said they hid their activities behind Native American tribes.

"Tucker and Muir sought to get away with their crimes by claiming that this $3.5 billion business was actually owned and operated by Native American tribes," he said. "But that was a lie. "

The Wall Street Journal reported that the racketeering charges alone carry sentences up to 20 years in prison. Prosecutors are seeking forfeiture of personal property as well.

Generally Corrupt

Muir, who was the company's general counsel for seven years, was convicted on all counts against him. A jury convicted him in less than a day of deliberations.

According to the indictment, he and the CEO "systematically exploited over four and half million working people throughout the United States who were struggling to pay basic living expenses, including for food and housing."

After customer complaints grew into lawsuits against them, the defendants tried to avoid liability by entering "sham business relationships with certain Native American tribes." They claimed "tribal sovereign immunity," even though the tribes played no part in their scheme.

Tucker spent over $100 million on personal expenses, including luxury homes, automobiles, jewelry, a private jet. and an auto racing team, the court record said. His lawyer said he will appeal.

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