"I think it just comes down to fast money, fast cars, fast women, and all the trappings you'd expect to see someone get caught up with." — Former Level 5 Motorsports employee.
News of race-car driver and payday-lending maven was far from a surprise for those inside the sport. The Level 5 Motorsports team owner is the latest in an intriguing line of characters to parachute into the world of sports-car racing, burn obscene amounts of cash for a few years, and leave in handcuffs.
Drug harvesting, dealing, and transportation, bilking churches and charities out of millions, and Ponzi schemes are among the most popular actions that have seen sports-car team owners and drivers placed in shackles. Tucker's recent fall is only the latest chapter among sports-car racing's jailhouse gems.
Tucker, his late brother Blaine, and others within his inner circle had been the target of the Federal Trade Commission for years, and with Tucker's apprehension by the FBI last week, the 53-year-old's journey has followed an all too familiar path among endurance racers. Along with Tucker, one of his attorneys, Timothy Muir, was also arrested, , as part of a "criminal indictment charging (Tucker and Muir) with violations of the Racketeer Influenced and Corrupt Organizations Act ('RICO') and the Truth in Lending Act ('TILA') for operating a nationwide internet payday lending enterprise that systematically evaded state laws in order to charge illegal interest rates as high as 700% on loans."
Tucker, Muir, and another associate, Richard Moseley, were released on bail after their arrest.
The in a Nevada federal court seeking $1.32 billion in damages from Tucker and citing the FTC's belief he was "," according to Reuters.
The Reuter's report also says the FTC's complaint stated Tucker allegedly used proceeds from his lending businesses to "receive at least $419.8 million and pay for luxury vehicles, private charter and jet flights, and for an $8 million residence in Aspen, Colorado." And on the racing front "another $67.6 million was transferred to his racing team, Level 5 Motorsports, for 'sponsorship' fees."
Despite the FTC's concerted efforts to take down Tucker prior to his arrest, significant questions remained as to whether he was the actual owner of the payday institutions committing the alleged predatory lending. Tucker's lawyers maintained Ameriloan—a company whose branding was carried on some cars he raced, the eight loan companies that fell under the Ameriloan blanket, and any other lending businesses the FTC claimed Tucker owned—was actually owned and controlled by multiple Native American tribes.
According to court documents, the , but in the statements made by Preet Bharara, the United States Attorney for the Southern District of New York, the government appears to have found information contrary to these ownership claims. The arrest of Tucker and the others followed.
As alleged, Scott Tucker and Timothy Muir targeted and exploited millions of struggling, everyday people by charging illegally high interest rates–as much as 700 percent. Tucker and Muir allegedly sought to evade liability by claiming that this $2 billion business was actually owned and operated by Native American tribes. But thanks to the investigative work of the FBI and IRS, this deceptive and predatory scheme to take advantage of the most financially vulnerable in our communities has been exposed for what it is–a criminal scheme.
The USDOJ alleges Tucker's side retained 99 percent of the profits while the tribes were given one percent for posing as the business owners: "In return, the Tribes received payments from Tucker, typically one percent of the revenues from the portion of Tucker's payday lending business that the Tribes purported to own."
[Tucker and Muir are] charged with conspiring to collect unlawful debts in violation of RICO, which carries a maximum term of 20 years in prison, three counts of violating RICO's prohibition on collecting unlawful debts, each of which carries a maximum term of 20 years in prison, and five counts of violating the Truth in Lending Act, each of which carries a maximum term of one year in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentences the defendants receive will be determined by the Court. The indictment also seeks to forfeit from TUCKER and MUIR the proceeds and property derived from their alleged crimes, including, among other things, numerous bank accounts, a vacation home in Aspen, Colorado, six Ferrari race cars, four Porsche automobiles, and a Learjet airplane.
Within sports-car racing, Tucker's exploits with Level 5 Motorsports were filled with excess from the start, and as his presence grew in the sport, his eccentricities began to spill out in curious ways.
Painting a billionaire racing driver as a recluse might sound odd, but other than the time he spent behind the wheel, Tucker channeled his inner Howard Hughes and was rarely seen outside the confines of his mobile racing fortress. He gave the impression he either felt unwelcome in the paddock or that he'd be the source of derision from those who questioned the morality of how his fortune was earned. Rumors of payday loan improprieties followed Tucker throughout his time as a sports-car driver, which he likely knew and contributed to his bunker-like approach.
He competed in the American Le Mans Series and Grand-Am against teams owned by fellow billionaire Roger Penske, famed entrant Chip Ganassi, and others whose businesses were incredibly successful. Yet Tucker was the only one who went out of his way to distance himself from being part of the sport's communal framework. Where the Penskes and Ganassis made themselves available to fans and the media, Tucker walled himself off from the paddock.
And where other professional sports-car teams purchased transporters and equipment to create a mobile garage—ones with custom flooring, large awnings, and all the necessary tools for mechanics to service and prepare cutting-edge race cars—Level 5 had a compound that was genuinely foreboding, a stronghold of sorts. If the exterior wasn't a clear sign fans weren't welcome to walk up and get a closer look inside Level 5, the team made sure its paddock space was off limits by hiring one or more personal security guards to police ingress and egress.
The absurdity of the situation was highlighted at the 2013 mash-up between the ALMS and the FIA World Endurance Championship at Circuit of the Americas. The presence of massive WEC factory LMP1 programs from automotive giants Audi and Toyota brought priceless cars and equipment to the Austin, Texas, circuit where they shared the same paddock with Level 5 and the rest of the ALMS contingent.
LMP1 programs, built from annual budgets well over the $100 million mark, went unguarded while the Level 5 team, whose racing assets would amount to a rounding error on an LMP1 balance sheet, was protected around the clock. Whether it was an outward projection of strength, or a strange form of insecurity, Tucker made it clear that Level 5 was on an island of its own and the waters bordering that island would be under constant patrol.
Ignoring Tucker's bizarre need for privacy at a racetrack, where fans and TV cameras are ever present, the quality of the operation he and the late Level 5 team manager David Stone assembled was simply staggering. His spending habits—even in a paddock filled with million-dollar machines—were breathtaking.
Using the profits alleged by the FTC, Tucker spent wildly as Level 5 acquired a fleet of cars that competed in multiple racing series. He also hired purebred drivers—champions and stars alike—to serve as coaches and/or co-drivers. IndyCar champions, sports-car champions, Le Mans winners, and other high-profile racers were paid handsomely to be associated with Level 5. And with a dedicated crew of talented mechanics and engineers fielding the cars, Tucker's team amassed multiple championships and race wins.
"He paid very well, had great crew members, no expense was spared, no details overlooked," said one former Level 5 driver. The feeling that the government would eventually indict Tucker, according to that driver, was an accepted part of competing on behalf of Level 5. "That was the big joke—enjoy it while it lasts," he added.
Level 5's entry into the high-tech ALMS series in 2010 came in its Le Mans Prototype Challenge (LMPC) category where the team . The graduation to LMP2 in 2011 was another demonstration in wealth dispersal. carrying price tags exceeding a half-million dollars each to start the 2011 season. The team replaced the Lolas later in the year with HPD ARX-01 P2s to close the season, and then, for 2012, specifications after purchasing new carbon-fiber monocoques.
Discounting any spare cars, that's five primary P2s two costly upgrades in a little more than a year. Tack on all of the extra bodywork and backup pieces needed for each model in the event of an accident, the costs to secure engine leases, technical support staff for those engines, and a number close to $1 million per chassis is easily reached. Sticking with prototypes, Level 5's first appearance came in 2009 in Grand-Am with , which it raced for a few seasons before (and while) racing in the ALMS.
In 2013, , but according to one team member, the two DPs and three Lola P2s were still there. The team was also considering a return to PC, so two ORECA FLM09s were purchased to replace the two it sold when it moved to P2. There's nothing wrong with owning a lot of prototypes, but it is rare to have a team, as Level 5 did late in 2013, with nine total P2s/DPs/PCs under one roof.
Tucker had enough prototypes to form a rival series if he wanted to take on the ALMS. From an informal tally of the cars he purchased, apparently something in the neighborhood of 24 to 25 vehicles were owned by Level 5 from 2007 to 2014.
Tucker also ran the world's most expensive amateur racing machine, as told by former Level 5 technical director Jeff Braun, in the must-be-heard-to-be-believed Dinner With Racers "Level 5 Special" podcast. Although the source of Tucker's income has led to an unpleasant outcome, his use of that income for racing largesse, as Braun reveals, was better suited for Formula 1 than pounding amateur racers into the ground.
Dinner With Racers "Level 5 Special" podcast
Financing scandals aren't new
Prior to Tucker's arrival in the ALMS, Greg Loles, co-owner of the Farnbacher Loles team, was the standard bearer for scandalous headlines. His Connecticut-based team raced and won in 2008 with its Porsche in the GT2 class, continued through the 2009 season, and quickly disappeared after the season finale.
Why did Farnbacher Loles go belly-up? . He duped the church and members of its congregation to fund his Ponzi scheme, and got caught. Arrested in late 2009, . One prominent Greek family is said to have been taken for $14 million alone by Loles. He also took the St. Barbara church for $2.1 million.
According to the FBI, Loles also used his ill-gotten millions to fuel the Farnbacher Loles team's heavy appetite for cash.
"Instead of investing funds as promised, Loles used the money to fund his Farnbacher Loles operation, to pay personal expenses, and to purchase a large home with a pool, tennis court, and multi-car garage for his sports cars," . "In order to keep his scheme from being detected, Loles provided investors with fraudulent account statements and also made periodic "lulling" payments to certain investors using a portion of other victim-investors' funds."
Assistant U.S. Attorney Michael S. McGarry was unflinching in his assessment of Loles' character while addressing the court during sentencing in 2014. "What he did wound up ruining lives like a cancer eats away from someone's insides," "This is a man who earned people's trust, and they could not see the trouble coming. A true wolf in sheep's clothing."
Provided he serves the full term, Loles will be 80 when he's released from prison.
Other American racers-turned-jailbirds include former IMSA champion Randy Lanier who recently completed his sentence for drug smuggling. With the explosion of marijuana and cocaine throughout the U.S. in the 1980s, several sports-car racers——gained notoriety for involvement in the drug trade along with their efforts to evade the FBI. The skullduggery, however, hasn't been limited to the U.S.
European team owners and drivers have also authored some infamous stories. Former British Touring Car Championship entrant Vic Lee definitely deserves a place in the pantheon of law-breaking racers.
after he was caught using his team's transporter to smuggle almost $10 million in cocaine. An exceeding number of trips from the U.K. to Holland drew the authorities to Lee's activities, and after a thorough inspection of his truck and trailer, police found Lee was using nitrogen gas cylinders (the large, steel tanks used for inflating tires and powering wheel guns to change tires during pit stops) to hide the narcotics.
After arriving in Holland, Lee's smuggling operation emptied the gas from the cylinders, cut them open, filled the tanks with cocaine bundles, then welded the cylinders shut and returned home. Set among other normal racing equipment, the altered nitrogen cylinders went unnoticed until authorities received a tip.
Sent to prison in 1993, Lee was paroled in 1998 and when he was caught smuggling cocaine, this time, in the trunk of his car.
I asked my friend Graham Goodwin, editor of and English language co-host of the FIA WEC broadcasts, to conjure up a few lesser-known cases of European sports-car improprieties, and he didn't disappoint.
"James Munroe launched his British GT effort for 1998 with a long-tail McLaren F1 and a glitzy event featuring supermodels and pop stars," he said. "All too soon, though, it unraveled. Particularly so when a senior executive of his employers, publishers McGraw-Hill, spotted Munroe, one of their accountants, racing the McLaren on TV."
This curious incident triggered an investigation that discovered Munroe to be guilty of ainvolving McGraw-Hill and led to him doing jail time.
"The story should end here, but doesn't," Goodwin continued. "Upon release, , this time defrauding his new employer—a charity no less—to buy himself a luxury lifestyle before attempting to sell his sordid story as some kind of rags-to-riches tale—less Walter Mitty than Totally Shitty."
"And then there was Rohan Skea," Goodwin said. "Skea, an Australian lawyer, was the name behind a high profile two-car ALMS Porsche team in the series' early days which looked slick and well-funded until he was charged with multiple instances of fraud. Rohan had gathered multi-million dollar loans secured against non-existent assets, and with all the transactions supported by forged company letters and invoices.
", of course, and a six-year prison sentence followed, with nearly four served before he emerged to receive further allegations of financial wrongdoings."
And finally—at least until another sports-car team owner winds up in handcuffs—here's Goodwin's painfully of Daniel Uckermann, who makes Greg Loles look like an amateur.
"Uckermann is a 2015 GT4 Euroseries class champion who secured the title back in August after racing a Lotus Evora and KTM XBow Coupe, but he didn't show up at the end-of-season party to collect his trophy," he said. "The reason the 32-year-old German skipped the ceremony that left creditors out of pocket to the tune of an estimated 100 million Euros!"
And where might we find Uckermann today? Apprehended and awaiting trial, perhaps?
"Unfortunately, no," Goodwin said. "German authorities believe that Uckermann has fled to Africa, possibly to the Democratic Republic of Congo."
This is the first installment on crime behind-the-scenes in motorsports. Check back for more characters and unbelievable tales soon.