Nebraska Auto Dealer Accused of Wire Fraud
Inside Subprime: Nov 21, 2018
By Lindsay Frankel
A former auto dealer in Fremont, Nebraska is accused of 13 counts of wire fraud after deceiving financial institutions, according to federal prosecutors. The auto dealer was indicted in federal court last week.
The dealer used funds from short-term loans to bid on cars at auctions. The lenders assumed that the auto dealer operated by using sales proceeds from the vehicles to pay back the loans. Instead, prosecutors say he used his access to credit for personal gain, including buying cars for himself and loved ones.
The indictment states that he falsified financial statements, failing to include open loans , in order to gain funds from three other lenders.
According to the indictment, which covers the auto dealer actions between September 2014 and December 2016, the dealer also took out loans to allegedly buy the same vehicle from multiple lenders. For example, he took out a $26,200 loan from URB to buy a 2013 Cadillac XTS, only to borrow the same amount for the same car five days later.
By making false statements, the dealer was alleged to obtain $9.7 million in total credit from four different lenders.
While causing financial harm to the oblivious lenders, the dealer also left his customers to deal with huge hassles. After purchasing a Pontiac GTO from the dealer in 2016, the company closed down shop, leaving a couple without a title to their vehicle. Unable to register their car, it sat unused in their garage for more than a year. They finally received a title in March, but not before involving an attorney and overcoming numerous state and federal obstacles. “You have no idea how much of a hassle this was,” the victim said. Her advice to potential car buyers? “Don’t drive off the lot without a title in your hand.”
Each of the auto dealer’s wire fraud charges carries a 20-year maximum sentence, and he is also facing two counts of making false statements on loan applications that each have a 30-year maximum sentence. He’s also charged with money laundering after purchasing a Corvette with money that prosecutors say belonged to lenders. That count carries a 10-year maximum sentence. The first hearing is scheduled to take place in December.