Tuesday, November 3, 2009

Former Ford Dealers Hit by Bank Fraud Charges

Dealers facing up to 30 years in prison

This isn’t your everyday bank fraud story.

Authorities charge that the former owners of a Ford dealership in upstate Wisconsin defrauded a local bank in a scheme that lasted over four years and resulted in losses of over $2 million.

According to a press release from the U.S. Attorney’s office and reports in the LaCrosse Tribune and the Chippewa Herald, the accused men who are brothers, have agreed to plead guilty to charges stemming from a fraud that court documents say cost two banks more than $2 million.

You can’t blame this one on the lousy conditions in auto retailing.

The scheme allegedly began in January 2004 and wasn’t uncovered until August 2008.

Information filed by federal prosecutors indicates that the pair falsely claimed to be buying vehicles for their inventory. But it turns out that some of the loans were for vehicles the brothers never bought. In other instances, the pair were simply out of trust by failing to report to the banks that vehicles had been sold.

The fraud resulted in a $1,767,353 loss for Farmers and Merchants Bank and a $296,861 loss for First Bank.

The banks discovered the fraud in August 2008 and reported the matter to federal authorities in August 2008. The dealership is still operating but is under new ownership.

The former dealers each face a maximum penalty of 30 years in prison plus restitution.

A government spokesperson said that some funds have been repaid by selling personal property.


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1 comment:

ryan said...

auto dealerships can be a dirty business