A District Court judge in Kansas has quashed a motion to garnish the property of an individual who was accused of fraudulently trying to hide $13 million in assets as a means of avoiding having to use them to settle $40 million in fines and penalties that were assessed in an earlier enforcement order by the Consumer Financial Protection Bureau, but denied the motion to quash the garnishments that was filed by the individual’s wife.
The Background: The CFPB began investigating James Carnes — an associate of Scott Tucker — back in 2013. The day after the attorney representing Carnes’s company met with the CFPB, Carnes began setting up a revocable trust.
- The Bureau alleges that Carnes transferred about $13 million over the court of two years into the trust, while his company was being investigated by the CFPB.
- The CFPB sued Integrity Advance and Carnes in 2015, accusing the company of deceiving consumers about the cost of the payday loans they were obtaining and for using remotely created checks to withdraw funds from the consumers’ accounts even after the consumers revoked their permission for the withdrawals.
- The CFPB sued Carnes and his wife Melissa earlier this year, and then filed a motion to prevent the Carnes’s from touching the money that was left in the trust.
The Ruling: Carnes’s motion was based on the fact that he was referred to as a co-trustee of an account that he was purportedly no longer involved with. His wife indicated she had him removed as a signatory on the account.
- Her argument was not as persuasive to the judge.
