Tuesday, September 26, 2023
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Assets Frozen in|Payday Lending Case

LAS VEGAS (CN) - Criminal proceedings won't stop the FTC's efforts to secure a financial judgment from payday lenders in a parallel civil case, a federal judge ruled after freezing the lenders' assets.

U.S. District Judge Gloria Navarro on Tuesday denied a request for a stay from Scott A. Tucker, who faces criminal charges in a payday lending operation that involved two tribally owned lenders.

The FTC accuses Tucker et al. of violating the Truth in Lending Act and the Electronic Transfer Act by charging "undisclosed and inflated fees ."

Tucker cited the Fifth Amendment in his motion for a stay , saying he certainly will face a parallel criminal action, as the U.S. Attorney's Office in February unsealed an indictment against him and third party Timothy Muir.

But Navarro said the Constitution does not require a stay of civil proceedings pending the outcome of a criminal action, and Tucker's rights are not substantially affected by a concurrent civil proceeding.

Nothing stops Tucker from pleading the Fifth Amendment during the civil case, and if he does, the judge can "'draw adverse inferences'" from it, Navarro wrote.

"Discovery is closed in this action" and "Tucker asserted his Fifth Amendment rights throughout discovery," Navarro wrote. "There are few, if any, remaining opportunities for Tucker to assert his Fifth Amendment rights."

The FTC prevailed in the first phase of the civil action, and all that remains is determining the damages. Navarro said a stay would prejudice the FTC by delaying its damage calculations in a case it has prosecuted since April 2012.

Navarro on March 31 granted the FTC's motion for a preliminary injunction and enjoined AMG Services et al. from transferring or removing any assets owned, controlled or held for defendants anywhere in the world.

Navarro said the FTC likely will prevail on its claims, and it is in the public interest to enjoin AMG et al, from transferring assets to third parties.

Navarro also ordered the defendants to leave safe deposit boxes unopened, not to take out loans against assets, or incur liens or charges against them assets owned or acquired by defendants on or after March 31.

Navarro allowed Scott Tucker and relief defendant Kim Tucker to retain access to $75,000 in combined funds for attorneys' fees and two months of living expenses, and let defendant Nereyda M. Tucker retain $25,000 for attorneys' fees and living expenses.

Navarro also ordered banks, credit card payment processors and other financial institutions with whom defendants have accounts and that receive copies of the order to hold and retain their assets.

Navarro ordered the defendants to prepare financial statements and submit them within five days of receiving their service orders.

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