AUTOMOTIVE NEWS – JANUARY 22, 1950 – Jury Acquits Tucker of Fraud

Along with seven business associates, Preston Tucker – founder and namesake of the Tucker Car Corporation and the creator of the ultramodern Tucker ’48 sedan – is found not guilty of 25 counts of mail fraud, five counts of violating SEC rules and a single count of conspiracy to defraud.

The company, however, would not survive the bad press and production delays that the trial imposed. The name "Tucker" would become synonymous with a failed business dream.

In October 1949, Preston Tucker and Tucker Car Corporation executives Harold Karsten, Floyd Cerf, Robert Pierce, Fred Rockelman, Mitchell Dulian, Otis Radford and Cliff Knoble sat in a Chicago federal courtroom. The company they’d created from scratch barely two years earlier lay in ruins, with its factory closed and headlines decrying Tucker’s innovative sedan as a fraud. Prosecutors charged that the company had no intent to build a new car, and had used the Tucker ’48 as a front for cheating investors.

Tucker, an automotive enthusiast and charismatic entrepreneur, had promised the public something pretty radical: a new car that was to be a total departure from prewar designs. The sedan would have a rear engine, a laminate windshield, side-impact protection and a trademark center headlight that turned with the front wheels – a feature that became a trademark of the Tucker’s appearance.

Also radical were Tucker’s methods of fundraising. In order to guarantee the purchase of plant buildings from the War Assets Administration, Tucker and his associates had raised funds in an unorthodox manner, selling dealership rights and accessories for a car that had yet to exist.

With materials shortages still in effect, Tucker engineers used car parts from junkyards to build the first prototype in June of 1947. This so-called “Tin Goose” had no reverse gear, and its suspension failed right before a press preview.

Tucker eventually abandoned the idea of direct-drive torque converters on the rear wheels instead of a transmission. The fuel-injected low-RPM engine also proved too complex and was replaced by a helicopter engine. Still, a series of bad press notices worried some investors and caused Tucker to write an “open letter to the automobile industry” that alleged espionage from other automakers.

The SEC raided the Tucker plant on May 28, 1948, forcing Tucker to cease production and lay off 1,600 employees. The trial began October 4, with the prosecution trying to prove that Tucker never meant to build a car and that the sole intent of Tucker Car Corporation was to defraud investors.

Tucker’s defense attorneys argued that the Tucker was ready for mass production and that the company would have never built a plant and hired employees if it had only been a fraud. A former Tucker dealer, while testifying for the prosecution, inadvertently won favor for Tucker when he said his own ’48 sedan was the “finest car I have ever driven.” Attorneys even parked eight Tucker ‘48s in front of the courthouse and offered jurors the opportunity to take a ride.

After 28 hours of deliberation, the jury returned a verdict of not guilty on all charges. The unflappable Tucker famously told the press that “even Henry Ford failed the first time out.” Sadly, though Tucker would attempt to build another sports car with investors from Brazil, he died of lung cancer in 1956. Today, fewer than 50 complete Tuckers still exist, most of them in private collections.

Conspiracy theories surrounding the investigation abound, many of which added to the drama of the mostly historically accurate Tucker biopic, Tucker: The Man and His Dream. While a David-versus-Goliath story always makes a good movie, many people today think the Tucker Car Corporation always intended to build a car, and that the Big Three automakers – fearing competition from an upstart competitor – were behind the SEC’s investigation of Tucker.

Make It A Champion Day!