A federal judge has ordered Joel Tucker, a Prairie Village man with deep ties to the Kansas City payday loan industry, to serve 12.5 years in prison for dodging taxes and a scheme targeting consumers to pay debts that they often did not owe.
Tucker, who missed his first scheduled sentencing hearing last week and was issued a warrant for his arrest, was arraigned with his wrists and ankles bound in restraints. U.S. District Court Judge Roseann Ketchmark ordered that Tucker be taken away by U.S. Marshals to begin serving his prison sentence immediately.
Tucker was also ordered to pay more than $8 million in unpaid taxes he owes to the Internal Revenue Service. His total tax bill, with penalties and interest, is nearly $12 million.
Tucker’s prison sentence was longer than the 135 months in prison, or just over 11 years, that federal prosecutors had recommended in their sentencing memorandum. But it was less than the 15-year maximum sentence Ketchmark could have imposed under federal sentencing guidelines.
Ketchmark seemed 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, with the same federal government to which Tucker owes millions in taxes. he was under federal indictment. PPP loan applicants are asked if they have any criminal charges at the time they apply for the loans, to which Tucker replied that he was not when in fact he was. .
“I’m just flabbergasted,” Ketchmark said of Tucker getting a PPP loan. “This is outrageous conduct.”
Tucker’s attorney, JR Hobbs, said the PPP loan was paid off.
Hobbs said after sentencing that Tucker accepted responsibility for his crimes.
Tucker briefly addressed Ketchmark before delivering the sentence.
“I have no one else to blame but myself,” he said, adding that he had wanted to turn his life around and hoped his consulting business would help him.
Hobbs repeated the sentiment – “Mr. Tucker has no one to blame but himself” – and asked for a lighter sentence, one of 60 to 87 months. Hobbs added: “Any prison sentence is hard to carry out.”
Hobbs mentioned Tucker’s 84-year-old mother, who he says needs support, her two adult children and her stepdaughter. He said letters submitted by friends and family in 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 law, blatantly committing fraud again and again.”
“It wasn’t a lapse in judgment,” Mahoney said. “It was a way of life.”
Ketchmark expressed sympathy for Tucker’s family, calling them “secondary victims” and saying his children “didn’t deserve this”, but said he had “no respect for the law”.
“I don’t know what it takes for you to 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 was due in court to plead guilty to three counts against him last year, a sign that he had not accepted his responsibility.
“This last $20,000 from the federal government when people are in such dire need,” Ketchmark said.
Tucker’s Debt Sale Plan
Tucker is the brother of Scott Tucker, who is serving a more than 16-year prison sentence for running what authorities called an exploitative payday loan company that defrauded more than 4 million borrowers.
Joel Tucker pleaded guilty last year to his role in a scheme in which he sold consumer data to bill collectors purporting to reflect unpaid payday lender debts, but which was often inaccurate or did not belong to Tucker first. The result, authorities said, was that consumers were faced with calls and letters from debt collectors demanding payment of money they might 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 that year.
Federal prosecutors said he made $7.3 million from the debt-selling scheme, one that did not include any expenses on his part because he was selling debt that was fictitious or did not belong to him.
Tucker’s debt-selling scheme came to light in 2016 when a Texas federal bankruptcy judge investigated the origins of payday loan debts that appeared in consumer bankruptcy cases that could not be substantiated. The buyers of the debt said they bought the debts from a broker, who said they bought them from Tucker.
Tucker was ordered to testify as part of this investigation. Prosecutors said much of Tucker’s testimony in the case was false.
While Tucker had an unpaid tax bill, federal prosecutors said Tucker lived a lavish lifestyle, which included private jets, leases for luxury automobiles, fees for a private club in Vail, Colorado , and a credit card bill of over $682,000.
Tucker once owned a company called eData Solutions, which took applications for payday loans and sold them to lenders. Payday loans are small loans granted to borrowers, often in financial difficulty and with few alternatives for obtaining credit, who charge high interest rates. The industry has plenty of critics who say payday loans tend to trap the poor and desperate in endless cycles of debt.
Tucker and other owners of eData Solutions sold the company to the Wyandotte Tribe of Oklahoma in a purchase agreement where the tribe would pay former owners $277 million from future profits generated by eData Solutions.
Hobbs said on Tuesday that the Wyandotte tribe failed to honor the purchase agreement.
Prosecutors said Tucker used consumer data obtained from eData Solutions and sold it to debt collectors. Those 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 issued a ruling that Tucker and the IRS agreed that Tucker owed $8 million – an amount that included unpaid taxes as well as penalties and interest – from tax years 2007 and 2008 .
But by May, only $512 had been applied to that balance, which has since grown to nearly $12 million. This $512 payment did not come voluntarily from Tucker, but rather from a deduction from one of his bank accounts.
Tucker has told IRS agents since then that 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 wired $120,000 into his personal bank account.
While Tucker avoided paying taxes, he spent heavily on himself on indulgences like renting a Ferrari, visiting resorts in Colorado and Mexico, and taking private jets to get there.
This story was originally published July 13, 2021 2:10 p.m.