Payday Loan Owner Charged with Texas Bankruptcy Fraud

: Reese Baker & Associates

  Filed under: News

Wouldn’t it be nice if you could create money out of thin air? This is exactly what a payday loan business owner is accused of attempting in a bankruptcy case that resulted in Federal bankruptcy fraud charges. The business owner of the failed payday loan scam has been order by a Houston bankruptcy judge in Texas to surrender himself by the end of July. Scott Tucker, and is accused of operating an illegal $ 2 billion payday loan businesses that netted the business owner a cool $7.3 million.

Pay Loan Defaults

Pay day loan companies typically pull together their defaulted payday loans and then sell them to debt collection firms for pennies on the dollar. The debt collectors then proceed to collect the full portion of the debt. The defendants company sold a large volume of these default loan packages to three debt collection firms were purchased, but they are believed to be fraudulent accounts.

Texas Bankruptcy Proceedings

Bankruptcy Judges in Houston discovered a common trend that the three collection agencies that bought the debt from Tucker turned up frequently as disputed claims in a number of Houston bankruptcy cases. In his Texas bankruptcy, Tucker was order to produce sales records for debts that he sold to debt collection firms, but failed to produce them. It is now believed these were fake accounts.

Bankruptcy Fraud

In what could be considered one of the more fraudulent bankruptcy cases of the year, the owner’s brother was recently sentenced to 16 years and 8 months in jail for his part in the pay day loan business. Additionally, the former lawyer and co-defendant in the criminal proceedings was ordered to 7 years in jail. The overall moral of the story is that you can’t hide misdealing’s from federal pay day loan regulations nor from the US bankruptcy courts. That, and don’t try to defraud people Furthermore, when filing for bankruptcy, it is absolutely imperative that all information provided is 100% accurate. If you’re worried about your bankruptcy case being confirmed, contact a Texas bankruptcy attorney to ensure you are filling out bankruptcy paperwork correctly.