U.S. payday lending crackdown brings race car driver's arrest

By Nate Raymond

NEW YORK (Reuters) - U.S. authorities on Wednesday launched a broad offensive against abusive online pay lenders, arresting three people tied to the industry, including a race car driver, for exploiting more than 5 million cash-strapped consumers.

Prosecutors said Scott Tucker, who competes on U.S. and European racing circuits, ran a $2 billion enterprise that used sham tribal relationships to claim immunity from state enforcement actions over its abusive lending practices.

An indictment filed in Manhattan federal court said Tucker earned hundreds of millions of dollars in profits through payday loans, spending on luxury homes, cars, jewelry, a private plane and his professional racing team, Level 5 Motorsports.

The indictment also charged Timothy Muir, who prosecutors said was general counsel to Tucker's Overland Park, Kansas-based company AMG Services Inc, which claimed to be owned by the Miami Tribe of Oklahoma.

Two tribal corporations controlled by the tribe have agreed to forfeit $48 million in a non-prosecution deal, Manhattan U.S. Attorney Preet Bharara said.

A separate indictment charged Richard Moseley, who authorities said from Kansas City, Missouri ran a fraudulent $161 million online payday lending enterprise through offshore companies.

All three men face charges including Racketeer Influenced and Corrupt Organizations Act violations over schemes to collect unlawful debts through loans with interest rates of 700 percent or more.