Joel Tucker shows up for sentencing this time, ordered to spend 12.5 years behind bars

A federal judge ordered Joel Tucker, a Prairie Village man with deep ties to Kansas City’s payday lending industry, to serve 12.5 years in prison for dodging taxes and for a scheme that targeted consumers to pay debts they often did not owe.

Tucker, who missed his first sentencing hearing that was scheduled for last week and had a warrant issued for his arrest, was brought to court with his wrists and ankles bound by restraints. U.S. District Court Judge Roseann Ketchmark ordered that Tucker be taken by U.S. Marshals to begin serving his prison sentence immediately.

Tucker was also ordered to pay more than $8 million in unpaid taxes that he owes to the Internal Revenue Service. His total tax bill, with penalties and interest, amounts to nearly $12 million.

Tucker’s prison sentence was more than the 135 months in prison, or just more than 11 years, that federal prosecutors had recommended in their sentencing memorandum. But it was lower than the 15-year maximum term that Ketchmark could have issued under federal sentencing guidelines.

Ketchmark appeared to be particularly disturbed by the fact that Tucker took out an approximately $20,000 Paycheck Protection Program loan, an initiative to help keep businesses afloat and employees paid during the coronavirus pandemic, from the same federal government that Tucker owes millions in taxes to and while he was under federal indictment. PPP loan applicants are asked if they are subject to a criminal indictment at the time they seek the loans, to which Tucker said he wasn’t when, in fact, he was.

“I am just flabbergasted,” Ketchmark said of Tucker getting a PPP loan. “That’s outrageous conduct.”

Tucker’s attorney, J.R. Hobbs, said the PPP loan was paid back.

Hobbs said after sentencing that Tucker accepts responsibility for his crimes.

Tucker addressed Ketchmark briefly before she handed down the sentence.

“I have no one to blame but me,” he said, adding that he had wanted to turn his life around and was hoping his consulting business would help with that.

Hobbs repeated the sentiment — “Mr. Tucker has no one to blame but himself” — and asked for a lower sentence, one in the 60- to 87-month range. Hobbs added, “Any prison sentence is difficult to perform.”

Hobbs mentioned Tucker’s 84-year-old mother, who he said needs support, his two adult children and his step-daughter. He said letters submitted by friends and family to the court were evidence of acts of kindness and charitable contributions done by Tucker.

The prosecution, led by U.S. attorneys Kate Mahoney and Patrick Daly, argued Tucker “flouted laws, egregiously committing fraud over and over again.”

“This was not a lapse of judgment,” Mahoney said. “This was a way of life.”

Ketchmark expressed sympathy for Tucker’s family, calling them “secondary victims” and saying his children “don’t deserve this,” but said he had “no respect for the law.”

“I don’t know what it takes to get you to respect 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 receive some credit for accepting responsibility. Hobbs said that by pleading guilty, he spared the government the expense of what likely would have been a lengthy trial involving witnesses from around the country.

“This is separate from that,” Ketchmark said.

She also pointed to Tucker’s receipt of a PPP loan just days before he showed up in her court to plead guilty to three charges against him last year as a sign that he hadn’t accepted responsibility.

“That one last $20,000 from the federal government when folks are in such dire need,” Ketchmark said.

Tucker’s debt sale scheme

Tucker is the brother of Scott Tucker, who is serving a prison sentence of more than 16 years for running what authorities called an exploitative payday loan business that ripped off more than 4 million borrowers.

Joel Tucker pleaded guilty last year to his role in a scheme where he sold to bill collectors consumer data that supposedly reflected unpaid debts from payday lenders but was often inaccurate or didn’t belong to Tucker in the first place. The result, according to authorities, was consumers facing calls and letters from debt collectors demanding payment for amounts they may not have owed.

Tucker was previously sued by the Federal Trade Commission in 2017 for the same scheme, resulting 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 which included no expenses on his part because he was selling debt that was fictional or didn’t belong to him.

Tucker’s debt selling scheme came to light in 2016 when a federal bankruptcy judge in Texas investigated the origins of payday loan debts that were showing up in consumer bankruptcy cases that couldn’t be substantiated. Debt buyers said they bought the claims from a broker, who said he bought them from Tucker.

Tucker was ordered to testify as part of that investigation. Prosecutors said much of Tucker’s testimony in that case was false.

While Tucker had an unpaid tax bill, federal prosecutors said Tucker lived a lavish lifestyle, one that included private jets, leases for luxury automobiles, fees for a private club in Vail, Colorado, and a credit card bill in excess of $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-dollar loans made to borrowers, often in financial distress and with few alternatives to obtain credit, that charge large interest rates. The industry has plenty of critics who say payday loans tend to trap the poor and the desperate into 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 the erstwhile owners $277 million from future profits generated by eData Solutions.

Hobbs said Tuesday the Wyandotte tribe defaulted on the purchase agreement.

Prosecutors said that Tucker used consumer data gained from eData Solutions and sold it to debt collectors. Those debts, prosecutors said, didn’t belong to Tucker, were not actual debts owed by anyone or contained false information.

Tax case

The U.S. Tax Court in 2014 entered a decision that said both Tucker and the IRS agreed that Tucker owed $8 million — an amount that included unpaid taxes along with penalties and interest — from tax years 2007 and 2008.

But as of May, only $512 had been applied to that balance, which has since grown to nearly $12 million. That $512 payment didn’t come voluntarily from Tucker, but rather a levy on one of his bank accounts.

Tucker told IRS agents since then that he didn’t have income. According to court records, Tucker told an IRS agent on July 28, 2017, that he was borrowing money and trying to get his business up and running. The following day he had a friend wire $120,000 to his personal bank account.

While Tucker avoided paying taxes, he spent lustily on himself on indulgences like leasing a Ferrari, visiting resorts in Colorado and Mexico and taking private jets to get there.