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UNITED STATES DISTRICT COURT

DISTRICT OF KANSAS

FEDERAL TRADE COMMISSION,

Plaintiff,

v. 

JOEL JEROME TUCKER, individually and as an 

officer of SQ Capital, LLC, JT Holdings, Inc., and 

HPD LLC, 

SQ CAPITAL, LLC, a limited liability company, 

JT HOLDINGS, INC., a corporation, 

and

HPD LLC, a limited liability company,

Defendants. 

Case No. 16-02816

COMPLAINT FOR PERMANENT INJUNCTION AND OTHER EQUITABLE RELIEF

Plaintiff, the Federal Trade Commission, for its Complaint alleges: 

1. The FTC brings this action under Section 13(b) of the Federal Trade Commission

Act (“FTC Act”), 15 U.S.C. § 53(b), to obtain temporary, preliminary, and permanent injunctive 

relief, disgorgement of ill-gotten monies, and other equitable relief for Defendants’ acts or 

practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), in connection with 

Defendants’ marketing, distribution and sale of counterfeit payday loans. 

JURISDICTION AND VENUE

2. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C.

§§ 1331, 1337(a), and 1345, and 15 U.S.C. §§ 45(a) and 53(b).

3. Venue is proper in this district under 28 U.S.C. §§ 1391(b) and (c), and 15 U.S.C.

§ 53(b).

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PLAINTIFF

4. The FTC is an independent agency of the United States Government created by 

statute. 15 U.S.C. §§ 41-58. The FTC enforces Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), 

which prohibits unfair or deceptive acts or practices in or affecting commerce. 

5. The FTC is authorized to initiate federal district court proceedings, by its own 

attorneys, to enjoin violations of the FTC Act and to secure such equitable relief as may be 

appropriate in each case, including the disgorgement of ill-gotten monies. 15 U.S.C. §§ 53(b), 

56(a)(2)(A). 

DEFENDANTS

6. Defendant Joel Jerome Tucker is a resident of Kansas and the principal officer 

and owner of SQ Capital, LLC, JT Holdings, Inc., and HPD LLC. Joel Jerome Tucker 

formulated, directed, controlled, had the authority to control, or participated in the deceptive and 

unfair acts and practices set forth in this Complaint. In connection with the matters alleged 

herein, Joel Jerome Tucker transacts or has transacted business in this district and throughout the 

United States.

7. Defendant SQ Capital, LLC (“SQ Capital”), is a limited liability company 

organized in Missouri that lists 6299 Nall Avenue, Suite 100, Mission, Kansas 66202, as its 

registered business address. SQ Capital transacts or has transacted business in this district and 

throughout the United States. 

8. Defendant JT Holdings, Inc. (“JT Holdings”), a corporation organized in Kansas, 

is the sole member of SQ Capital. Defendant JT Holdings listed 6299 Nall Avenue, Suite 100, 

Mission, Kansas 66202, as its business address in its most recent corporate filing. Before JT 

Holdings adopted its current name in 2010, it was named Bahamas Marketing Group Ltd., BMG 

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Solutions Ltd., and Edata Solutions, Inc. JT Holdings transacts or has transacted business in this 

district and throughout the United States. 

9. Defendant HPD LLC (“HPD”) is a Wyoming limited liability company that lists 

its principal address as 2120 Carey Ave, Cheyenne, Wyoming 82001. 

10. Defendants SQ Capital, JT Holdings, and HPD have operated as a common 

enterprise while engaging in the unlawful acts and practices alleged below. Defendants have 

conducted the business practices described below through an interrelated network of companies 

that have a common owner, officer, manager, business functions, and commingled funds. 

Because these corporations have operated as a common enterprise, each of them is jointly and 

severally liable for the acts and practices alleged below. Defendant Joel Tucker has formulated, 

directed, controlled, had the authority to control, or participated in the acts and practices of the 

corporate defendants that constitute the common enterprise. 

COMMERCE

11. At all times material to this Complaint, Defendants have maintained a substantial 

course of trade in or affecting commerce, as “commerce” is defined in Section 4 of the FTC Act, 

15 U.S.C. § 44. 

DEFENDANTS’ BUSINESS PRACTICES

12. When consumer debts that have been charged-off by the original creditors are 

marketed for sale to third parties, they are typically bundled into debt portfolios. Debt sellers 

purchase and sell these debt portfolios for eventual collection by third-party debt collectors. The 

documentation for the portfolios often includes one or more spreadsheets with tables that list 

details about individual debts in a portfolio, such as the identity of original creditors; consumers’ 

names, addresses, phone numbers, and social security numbers; original account numbers; 

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original balances; interest rates; charge-off balances; charge-off dates; date the account was 

opened; and last payment date. Debt collectors use the information in such spreadsheets to 

identify debtors and demand repayment of the debts identified. 

13. Beginning in or about July 2014, Defendants marketed, distributed, and sold 

counterfeit debt portfolios that purport to identify consumers who have defaulted on payday 

loans. 

14. The counterfeit debt portfolios list consumer names and contact information along 

with social security and financial account numbers. For each consumer identified, the portfolios 

list detailed information about purported payday loans, such as alleged original loan amounts, 

loan dates, repayment histories, and unpaid balances. 

15. The counterfeit debt portfolios also list the purported originators of the payday 

loans. Some of the counterfeit debt portfolios list as originator a brand associated with 

recognized payday loan services, such as “500FastCash,” a registered trademark of Red Cedar 

Services, Inc., used in advertising high-fee, short-term “payday” loans offered at various web 

sites, including 500fastcash.com. Some counterfeit debt portfolios list a fictitious entity, such as 

“Castle Peak,” as the purported lender. 

16. These debt portfolios are counterfeit because in numerous instances, they list 

loans that the identified lenders have not, in fact, made to the identified consumers. 

Furthermore, Defendants have not purchased, or otherwise obtained, any rights to collect loan 

debts originated by the lenders listed in the counterfeit portfolios, nor have they engaged in any 

transaction that authorizes them to collect, sell, distribute, or transfer any valid loans originated 

by those lenders.

17. Defendants knew or should have known that the debt portfolios listed debts that 

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consumers did not owe. 

18. Defendants knew or should have known that the lenders identified in the debt 

portfolios were fictitious or, if the lenders were genuine entities, that Defendants were not 

authorized to act as the lenders’ agents and did not have authority to market debt originated by 

these lenders. 

19. Defendants knew or should have known that it was likely that the counterfeit 

portfolios would be given to debt collectors who would contact the listed consumers to demand 

payment on the purported debts. Defendants knew or should have known that it was likely that 

some counterfeit portfolios would be used to submit claims demanding payment of the purported 

debts in estate and bankruptcy proceedings.

20. Numerous consumers, directly or through bankruptcy proceedings, have been 

contacted by various debt collectors demanding repayment of purported debts listed in 

counterfeit portfolios distributed by Defendants. These demands for repayment were made by 

debt collectors that received counterfeit portfolios marketed, transferred, or sold by Defendants. 

21. In numerous instances, debt collectors who received counterfeit portfolios 

marketed, transferred, or sold by Defendants have successfully induced consumers to pay the 

purported debts. 

22. Consumers cannot reasonably avoid this harm. From the counterfeit portfolios, 

debt collectors obtain consumers’ private personal information and sensitive financial 

information, including social security numbers, bank account numbers, and names of references. 

Debt collectors recite such information as proof that the purported loan is legitimate. Given this 

detailed information, some consumers have made payments on the purported debt. 

23. Other consumers have paid the purported debts to stop the debt collection calls, or 

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because they were afraid of the repercussions of debt collectors reporting that they were 

delinquent in repaying a loan. 

24. Defendants have profited from the sale of counterfeit debt portfolios. 

VIOLATIONS OF SECTION 5 OF THE FTC ACT

25. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or deceptive acts 

or practices in or affecting commerce.” 

26. Misrepresentations or deceptive omissions of material fact constitute deceptive 

acts or practices prohibited by Section 5(a) of the FTC Act. 15 U.S.C. § 45(a). 

27. Acts or practices are unfair under Section 5 of the FTC Act if they cause, or are 

likely to cause, substantial injury to consumers that consumers cannot reasonably avoid and that 

is not outweighed by countervailing benefits to consumers or competition. 15 U.S.C. § 45(n). 

COUNT I

Means and Instrumentalities to Mislead 

28. In numerous instances, in connection with their marketing, distribution, and sale 

of purported payday loan debt portfolios, Defendants have represented, directly or indirectly, 

expressly or by implication, that consumers listed in those portfolios owe unpaid payday loan 

debts, and that those who obtain the portfolios through Defendants have the right to collect debts 

listed in the portfolios.

29. In fact, the consumers listed in those portfolios that Defendants have marketed, 

distributed, and sold did not owe the purported debts, and collectors that obtained those 

portfolios did not have the right to collect those purported debts. 

30. By making the representations in Paragraph 28, Defendants placed in the hands of 

debt collectors the means and instrumentalities by and through which they may mislead 

consumers regarding their debt obligations. 

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31. Therefore, Defendants’ representations, as set forth in Paragraph 28 of this 

Complaint are false or misleading, and constitute deceptive acts and practices in violation of 

Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

COUNT II 

Distribution of Counterfeit Debt Portfolios for Collection

32. In numerous instances, Defendants’ actions in distributing and selling counterfeit 

debt portfolios have caused or are likely to have caused substantial injury to consumers that 

consumers cannot reasonably avoid themselves and that is not outweighed by countervailing 

benefits to consumers or competition. 

33. Therefore, Defendants’ practices, as described above, constitute unfair acts or 

practices in violation of Section 5 of the FTC Act, 15 U.S.C. §§ 45(a) and (n).

CONSUMER INJURY

34. Consumers have suffered, or are likely to suffer, substantial injury because of 

Defendants’ violations of the FTC Act. In addition, Defendants have been unjustly enriched as a 

result of their unlawful acts or practices. Absent injunctive relief by the Court, Defendants are 

likely to continue to injure consumers, reap unjust enrichment, and harm the public interest. 

THIS COURT’S POWER TO GRANT RELIEF

35. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to grant 

injunctive and such other relief as the Court may deem appropriate to halt and redress violations 

of any provision of law enforced by the FTC. The Court, in the exercise of its equitable 

jurisdiction, may award ancillary relief, including the disgorgement of ill-gotten monies, to 

prevent and remedy any violation of any provision of law enforced by the FTC. 

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PRAYER FOR RELIEF

WHEREFORE, Plaintiff FTC, pursuant to Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), 

and the Court’s own equitable powers, requests that the Court: 

A. Award Plaintiff such preliminary injunctive and ancillary relief as may be 

necessary to avert the likelihood of consumer injury during the pendency of this action and to 

preserve the possibility of effective final relief, including but not limited to, temporary and 

preliminary injunctions and an accounting of debt portfolios distributed by Defendants; 

B. Enter a permanent injunction to prevent future violations of the FTC Act by 

Defendants;

C. Award such relief as the Court finds necessary to redress injury to consumers 

resulting from Defendants’ violations of the FTC Act, including but not limited to, the 

disgorgement of ill-gotten monies; and

D. Award Plaintiff the costs of bringing this action, as well as such other and 

additional relief as the Court may determine to be just and proper. 

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Respectfully submitted,

TOM BEALL

Acting United States Attorney

Dated: December 16, 2016

DAVID SHONKA

Acting General Counsel

\s Jason Oller

Jason Oller

Assistant United States Attorney

Ks. S.Ct. No. 24341

500 State Avenue

Suite 360

Kansas City, KS 66101

Telephone: (913) 551-6730 

Facsimile: (913) 551-6541 

Local Counsel for Plaintiff Federal Trade

Commission

\s Michael Tankersley

Michael Tankersley (pending pro hac admission)

D.C. Bar. No. 411978

Katharine Roller (pending pro hac admission)

Ill Bar. No. 6316909

FEDERAL TRADE COMMISSION

600 Pennsylvania Avenue, N.W.

Mailstop CC-10232 

Washington, DC 20580 

Telephone: (202) 326-2991 (Tankersley) 

Telephone: (202) 326-3582 (Roller) 

E-mail: mtankersley@ftc.gov

E-mail: kroller@ftc.gov

Facsimile: (202) 326-3629 

Attorneys for Plaintiff Federal Trade

Commission

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