Law360, New York (October 13, 2017, 4:33 PM EDT) -- A Manhattan jury Friday found auto racer Scott Tucker and his attorney Timothy Muir guilty of operating a $2 billion criminal payday loan empire that preyed on millions of vulnerable borrowers and entered into sham deals with Native American tribes in a cynical effort to evade consumer lawsuits and law enforcement.
Scott Tucker — above in white and shown in 2010 — and Timothy Muir had each faced 14 criminal counts, including charges of fraud, money laundering, illegal debt-collection, conspiracy and racketeering. (Getty)
The guilty verdicts came after a trial before U.S. District Judge P. Kevin Castel that opened Sept. 12 and featured a parade of government witnesses and other powerful evidence, including emails that suggested
the defendants went so far as to concoct a fake lawsuit to protect themselves.
The jury of seven women and five men needed just five hours of deliberations before rejecting Tucker's contention
that he relied upon sound legal advice, and Muir's related argument
that he acted in good faith, as the pair aligned Tucker's Kansas-based loan operations with the Miami, Modoc and Santee Sioux tribes.
Tucker and Muir each were found guilty of 14 criminal counts, including charges of fraud, money laundering, unlawful debt-collection and lying to borrowers. An analysis shown at trial
said Tucker's businesses lent money to 4.65 million people across the U.S. between 2008 and 2012 and that Tucker paid his own interests a combined $388 million between 2008 and mid-2013.
Throughout the trial and as the verdict was read, the defendants showed little emotion. Even as he took the stand to testify on his own behalf and endured a tough cross-examination
, Muir spoke in largely measured tones.
Tucker's counsel Lee Ginsberg of Freeman Nooter & Ginsberg called the verdict “disappointing.”
“We intend to appeal,” Ginsberg said.
Muir's counsel, Thomas J. Bath of Bath & Edmonds PA
, declined to comment.
Judge Castel declined a government request to have the two convicted defendants jailed pending their scheduled Jan. 5 sentencing. But the judge ordered them to be confined to their Kansas homes and to be monitored electronically.
Prosecutor Niketh Velamoor of the U.S. Department of Justice
said it was possible that Tucker may have still-unfrozen assets and could attempt to flee. But Ginsberg said there was no evidence of stashed money and asserted that Tucker — who was charged well over a year ago — has long known of the possibility he could be convicted.
“He could have left the United States,” Ginsberg said.
Tucker, a noted auto racer, is likely to face a lengthy prison term as the unquestioned leader of the operation. He also has a mail fraud conviction on his record and conceded during trial that he once falsified information on a bankruptcy filing.
Muir, who was born in Australia and is a lawful permanent U.S. resident, is likely to face deportation after completing any sentence imposed by Judge Castel.
Acting Manhattan U.S. Attorney Joon H. Kim said in a late-day statement that the pair “exploited millions of struggling, everyday Americans,” charging them rates as high as 700 percent for payday loans.
“Tucker and Muir sought to get away with their crimes by claiming that this $2 billion business was actually owned and operated by Native American tribes. But that was a lie. The jury saw through Tucker and Muir’s lies and saw their business for what it was — an illegal and predatory scheme to take callous advantage of vulnerable workers living from paycheck to paycheck,” Kim said.
The Federal Trade Commission
has also won a massive judgment against Tucker and his related businesses.
Jurors exited the courthouse without comment upon delivering their verdict, which came after an afternoon during which they peppered Judge Castel with requests for Muir's testimony on cross-examination, a transcript of recordings played at trial
and a definition of the term “unlawful debt collection.”
The government is represented by Niketh Velamoor, Sagar Ravi and Hagan Scotten of the U.S. Department of Justice.
Tucker is represented by James M. Roth of Stampur & Roth and Lee Ginsberg and Nadjia Limani of Freeman Nooter & Ginsberg.
Muir is represented by Thomas J. Bath of Bath & Edmonds PA.
The case is U.S. v. Tucker et al., case number 1:16-cr-00091, in the U.S. District Court for the Southern District of New York.
--Editing by Rebecca Flanagan and Mark Lebetkin.Update: This story has been updated with additional detail.
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