Two Native American Tribes to Pay $3 Million in Payday Loan Scam

(Bloomberg) -- Two Native American tribes agreed to forfeit $3 million in money they took in for acting as fronts for a scam run by Scott Tucker, the former race-car driver convicted of operating an illegal payday loan empire.

The Modoc Tribe of Oklahoma and the Santee Sioux Tribe of Nebraska admitted that Tucker used tribal corporations to evade state usury laws and that representatives of the tribes filed false statements in state enforcement actions against Tucker’s payday loan business, Manhattan U.S. Attorney Geoffrey Berman said in a statement Tuesday.

Tucker was convicted of racketeering charges in October and sentenced to more than 16 years in prison. He ran a nationwide Internet-based payday loan business that charged interest rates as high as 700 percent. He was ordered to pay $3.5 billion and turn over six Ferraris, four Porsches and a Learjet.

The money from the tribes will be turned over to the Federal Trade Commission for distribution to Tucker’s victims, according to the statement.

Representatives of the tribes didn’t immediately respond to requests for comment.

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