Articles by deBanked Staff
Payday Lending King Scott Tucker Convicted
October 14, 2017
One year after a federal judge awarded a record-setting $1.3 billion judgment to the FTC against Scott Tucker for damages caused by his payday lending empire, a jury in the Southern District of New York found him guilty on criminal charges that include participating in a racketeering enterprise through the collection of unlawful debt, wire fraud, money laundering, and violations of the Truth In Lending Act.
Tucker and another defendant, who happened to be his attorney in the scheme, are set to be sentenced on January 5th. He will remain on house arrest until then. Tucker is facing more than 20 years in prison. He is 55.
Among the luxuries Tucker spent his ill-gotten gains on were his professional racing hobby. His auto racing team, Level 5 Motorsports, participated in international tournaments and won 4 championships. The feds auctioned off his race cars that included two Ferraris and a Porsche earlier this year.
According to the DOJ:
TUCKER devised a scheme to claim that his lending businesses were protected by sovereign immunity, a legal doctrine that, among other things, generally prevents states from enforcing their laws against Native American tribes. Beginning in 2003, TUCKER entered into agreements with several Native American tribes (the “Tribes”), including the Santee Sioux Tribe of Nebraska, the Miami Tribe of Oklahoma, and the Modoc Tribe of Oklahoma. The purpose of these agreements was to cause the Tribes to claim they owned and operated parts of TUCKER’s payday lending enterprise, so that when states sought to enforce laws prohibiting TUCKER’s loans, TUCKER’s lending businesses would claim to be protected by sovereign immunity.
At trial, the jury wasn’t fooled. Read the full DOJ report here.
The Sept/Oct 2017 Issue of deBanked Magazine Has Shipped
October 12, 2017The latest issue of deBanked Magazine has shipped. In this issue we explore a new rule implemented by credit bureaus surrounding the reporting of liens and judgments, the shifting landscape for lead generators, and once again, what merchants themselves are saying about their experiences with online loans and merchant cash advances. There’s a lot more of course!!!
If you’re already subscribed, you should receive a copy soon. If you haven’t subscribed, you can make sure to get all future issues FREE by SIGNING UP HERE
Online Lender Pave Returns As Decentralized Credit Bureau
October 11, 2017Online lender Pave, which stopped making loans in June, is coming back as a decentralized credit bureau, according to their website.
“One of the key benefits of Pave’s new product is the decentralized and encrypted storage of individuals’ financial data in the blockchain,” a Pave press release published on Tuesday said.
Pave also plans to have a token sale in mid-October.
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You should read this bulletin from the SEC about token sales
Updates On Several Industry Court Cases
October 4, 2017Curious to know the status of industry court cases we’ve reported on? Here’s an update on several:
| Case | When filed | Where pending | Status |
| Yellowstone Capital LLC and EBF Partners, LLC v. Corporate Bailout, LLC, Mark D. Guidubaldi & Associates, LLC dba Protection Legal Group, PLG Servicing, LLC, American Funding Group, Coast to Coast Funding, LLC, ROC Funding Group, LLC, ROC South LLC, and Mark Mancino. | 9/27/17 | New York State Supreme Court | Complaint filed. No anwswer filed yet |
| Sean Pullen, Christina Cane, Michael Cane, Michael Carrera, Matthew Taylor, and Yulia Zamaora v Social Finance, Inc. and Does 1-50 | 8/14/17 | Superior Court of California | SoFi filed an answer to the complaint on 9/15 |
| Craig Cunningham v. Mark D. Guidubaldi & Associates, LLC dba Protection Legal Group, and Corporate Bailout, LLC, Sanford J. Feder Esq, Mark D. Guidubaldi, Esq, Cashflow Care, LLC | 5/10/17 | Northern District of Texas | Motion for default judgment filed against Corporate Bailout on 9/12/17. Defendant never responded |
| Natures Market Corp v. Creditors Relief | 4/28/17 | New York State Supreme Court | Creditors Relief’s motion to dismiss and sanctions are still pending |
| Pearl Gamma Funding, LLC and Pearl Beta Funding, LLC v. Creditors Relief, LLC | 11/16/16 | New York State Supreme Court | Pearl has moved to dismiss Creditors Relief’s counterclaims |
| United States v. Sergiy Bezrukov | 10/26/16 | Western District of New York | The criminal indictment was amended on 8/3/17 to add more charges. Bezrukov is facing up to 30 years in prison |
| Ronald Bethune, on behalf of himself and all others similarly situated v. Lendingclub Corporation;WebBank, Steel Partners Holdings, L.P.; The Lending Club Members Trust; and does 1 through 10, inclusive | 4/6/16 | Southern District of New York | The judge granted the defendants motion to compel arbitration on Jan 30, 2017 |
| Kalamata Capital LLC v. Biz2Credit, Inc. and Itria Ventures, LLC | 12/8/14 | New York State Supreme Court | Kalamata plans to amend the complaint and the Court is scheduled to decide on the debate over whether certain documents should be sealed from public view |
| Federal Trade Commission v. AMG Services, Inc., et al. | 4/2/12 | District of Nevada | $1.3 billion judgment entered. Company owner Scott Tucker is also currently being tried criminally in the Southern District of New York for ill-gotten profits related to his payday lending empire. The jury is expected to decide the outcome this month |
Get Your Free Hard Copy of deBanked Magazine
October 2, 2017
If you haven’t already signed up to receive our magazine in the past, you should register today to make sure you receive our September/October issue! Subscribing is FREE and this issue is packed with stories, stats, and industry data you can’t find anywhere else.
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deBanked to Attend FundKite ISO Event at Met Life Stadium Nov. 2nd
September 29, 2017
It’s unlikely the New York Jets will be dreaming of the Super Bowl come November 2nd when they play the Buffalo Bills, but MCA company FundKite is hosting a VIP event for select ISOs/brokers at Met Life Stadium in East Rutherford, NJ that day.
According to FundKite, sales reps that hit certain funding targets will be invited to join the actual football players on the field for the pre-game warmup. The company is also offering attendees 50-yard line seats and complimentary food and beverages.
The catch is that reps have to fund more than $150,000 or $300,000 with FundKite before October 26th. Reps outside the Tri-State area will be flown in, courtesy of the company.
deBanked’s Sean Murray will be in attendance.
For more information, contact FundKite at isorelations@fundkite.com
Scott Cornelis Joins Enova International as Treasurer
September 28, 2017Scott Cornelis, the head of capital markets at BorrowersFirst, has become the Treasurer at Enova International, according to LinkedIn.
BorrowersFirst is an online consumer lender that raised a $100 million senior debt commitment from Waterfall Asset Management earlier this year.
Enova is a publicly traded online lending company that owns The Business Backer and Headway Capital.
Prior to BorrowersFirst, Cornelis was an executive director at JPMorgan’s investment bank.
Ranger Direct Lending Fund Cites Princeton Fund As Source of Woes
September 27, 2017Ranger Direct Lending (Ranger), A UK-listed fund that has invested with companies such as AmeriMerchant/Capify, Biz2Credit, and Blue Bridge Financial, cited problems with the Princeton Alternative Income fund in its latest midterm report. The problems stem from Princeton’s original investment in Argon Credit, an online consumer lender that went bankrupt last December. The judge in the bankruptcy proceeding found that several of Argon’s asset valuation claims were unrealistic when Princeton attempted to secure its collateral. After a settlement, Princeton gained control of Argon’s loans and is servicing them. Meanwhile, Ranger sought to determine the damage that Argon had caused Princeton and was not satisfied with the answers it got, according to reports.
Princeton’s alleged lack of transparency caused Ranger to initiate arbitration proceedings against Princeton this past June. A hearing on the matter is scheduled to take place in November.
Ranger’s Net Asset Value grew by more than 4% in the first six months of the year, yet its share price has fallen to a substantial discount.
“The lack of clarity surrounding this [Argon Credit] impairment and the unwillingness of Princeton to supply detailed information to the Company or Deloitte, the Company’s auditors, led to the qualification of Ranger’s 2016 year-end audit opinion and only served to add to investor uncertainty,” a Ranger report says.
As of June 30, 2017, Ranger reportedly had more than $50 million invested in merchant cash advances and business loans, about 18% of its portfolio.
