Class Fights ‘Rent-a-Tribe’ Payday Loans

     KANSAS CITY, Kan. (CN) – A federal RICO class action claims the owner of a payday loan company, a felon, used a “rent-a-tribe” scheme to avoid civil and criminal liability for his illegal loan practices.
     Lead plaintiff Larry Robinson claims defendant Scott A. Tucker, of Leawood, Kan., is not licensed to issue payday loans in Kansas and cannot get a license for it because he is a felon.
     “Defendant Scott Tucker has been convicted of felony mail fraud and felony making a false statement to a bank. See United States v. Tucker, Case No. CR-90-00163-01 (W.D. Mo. Aug. 13, 1990) and United States v. Tucker, Case No. 4:91-CR-00001 (W.D. Mo. Jan. 4, 1991),” the complaint states in a footnote.
     But Tucker “organized, owns, operates, manages, and controls various payday loan trade names, including ‘United Cash Loans,’ which are in the business of providing illegal payday loans to consumers over the Internet,” from an office in Overland Park, Kansas, Robinson says in the complaint.
     He claims Tucker circumvented the system through a rental agreement with the Miami Tribe of Oklahoma in 2003, and with the Santee Sioux in 2005.
     The complaint states: “Defendant Scott Tucker and the Miami Tribe of Oklahoma entered into an agreement wherein defendant Scott Tucker and CLK Management, LLC agreed to provide the tribe with $5 million in capital, as well as all operational and managerial control, including staff, equipment, and advertising services, and the Miami Tribe of Oklahoma agreed, at its option, to furnish an office on tribal lands staffed by at least one employee in order to permit defendant Scott Tucker to use the tribe’s name to create a façade of immunity from state and federal lending laws.
     “Defendant Scott Tucker and CLK Management, LLC exclusively operated, managed, and controlled the payday lending operations, while paying the Miami Tribe of Oklahoma a monthly fee of 1 percent of gross revenue or $20,000 per month, whichever was greater, to use their name and purported immunity.”
     Robinson claims that in 2004 the Colorado attorney general sent a cease-and-desist letter to CLK Management’s “mail drop” in Carson City, Nev., “stating CLK Management LLC’s business practices violated Colorado law.”
     Undeterred, Robinson says, “In early 2005, defendant Scott Tucker approached the Santee Sioux Nation to discuss a proposal to create a structure to ‘rent’ the tribe’s legal immunity for his illicit payday loan businesses.
     “Defendant Scott Tucker and the Santee Sioux Nation entered into an agreement wherein defendant Scott Tucker and CLK Management, LLC agreed to provide the tribe with $3 million in capital, as well as all operational and managerial control, including staff, equipment, and advertising services, and the Santee Sioux Nation agreed, at its option, to furnish an office on tribal lands staffed by at least one employee in order to permit defendant Scott Tucker to use the tribe’s name to create a façade of immunity from state and federal lending laws.
     “Defendant Scott Tucker and CLK Management, LLC exclusively operated, managed, and controlled the payday lending operations, while paying the Santee Sioux
     Nation a monthly fee of 1 percent of gross revenue or $20,000 per month, whichever was greater to use their name and purported immunity.”
     Robinson claims that in June 2005 a Colorado court “issued contempt citations stemming from the failure of ‘Cash Advance’ and ‘Preferred Cash Loans’ to respond to investigative subpoenas.”
     In response, Robinson says, MNE Inc. and SFS Inc. appeared before the court and said they do business as Cash Advance and Preferred Cash Loans, respectively.
     “MNE Inc. and SFS Inc. claimed to be wholly owned subdivisions of the
     Miami Tribe of Oklahoma and the Santee Sioux Nation, respectively, which they claimed are federally recognized Indian Tribes immune from the State of Colorado’s subpoena authority,” the complaint states.
     “The State of Colorado, MNE Inc., and SFS Inc. continue to litigate whether MNE Inc. and SFS Inc. are immune from the authority of the Colorado Courts.”
     Robinson claims that in 2006 and 2007, CLK transferred several trademarks, including United Cash Loans, Ameriloan, USFastCash, and Changing the Way American Gets a Loan! to TFS Corp. He claims that TFS aka Tribal Financial Services Corp. “operates out of a post office box in Miami, Oklahoma.”
     He claims that Tucker operates “various payday loan trade names, including ‘United Cash Loans,’ and CLK Management LLC from an office building at 10895 Lowell Avenue, Suite 100, Overland Park, Kansas 66210,” which is not on tribal land.
     He adds: “Defendant Scott Tucker has obtained post office boxes on various tribal territories or reservations throughout the United States of America for use by his various payday loan trade names.
     “Defendant Scott Tucker and CLK Management, LLC have not and do not conduct business at or near these various post office boxes, and all mail addressed to such post office boxes is and was forwarded to defendant Scott Tucker’s Overland Park office where it is processed.
     “Defendant Scott Tucker has instructed his employees keep the location of the Overland Park office secret and not to provide its address to the general public.
     “Defendant Scott Tucker has informed his employees that he has associated with various Indian tribes in order to gain immunity from state and federal lending laws.
     “The Miami Tribe of Oklahoma and the Santee Sioux Nation did not and do not have a physical presence at the Overland Park office and did not and do not direct or control the operations of Defendant Scott Tucker or CLK Management, LLC.
     “Defendant Scott Tucker, not the Miami Tribe of Oklahoma or the Santee
     Sioux Nation, genuinely owned or owns, controlled or controls, and operated or operates the various payday loan trade names, including ‘United Cash Loans,’ from an office building at 10895 Lowell Avenue, Suite 100, Overland Park, Kansas 66210.”
     Robinson says he got a $300 loan from Tucker, with an annual interest rate of 608.33 percent, well above the maximum interest rate allowed by Kansas law.
     The class consists of anyone who got a payday loan from Tucker and the various trade names he owned, operated, or contracted with.
     Robinson seeks treble damages and punitive damages for usury, violations of the Missouri Merchandising Practices Act and/or the Kansas Consumer Protection Act and RICO violations.
     He is represented by Noah Wood of Kansas City, Mo.

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