DEPARTMENT OF JUSTICE

UNITED STATES ATTORNEY
GRETCHEN C.F. SHAPPERT
WESTERN DISTRICT OF NORTH CAROLINA

FOR IMMEDIATE RELEASE
MONDAY, JANUARY 5, 2009

CONTACT: SUELLEN PIERCE
704.338.3120

LOUIS F. HARRELSON ENTERS GUILTY PLEA IN FEDERAL COURT IN CHARLOTTE Criminal Case Involves False Statements Made for the Purpose of Influencing the Action of Financial Institutions CHARLOTTE, N.C. -- Louis F. Harrelson, 79, of Charlotte, was charged on November 6, 2008 in a federal bill of information filed under seal in U.S. District Court in Charlotte. The charge represents one count of making a false loan application, alleging that Harrelson knowingly made false statements for the purpose of influencing the actions of financial institutions insured by the Federal Deposit Insurance Corp. in connection with vehicle loans made to customers of the Harrelson Automotive Group, Inc. Harrelson agreed to plead guilty to the charge pursuant to a plea agreement with the government, also filed on November 6. A date has not yet been set for Harrelson’s formal entry of guilty plea or for his sentencing. The bill of information and accompanying official documents were unsealed Monday, January 5, 2009.

United States Attorney Gretchen C.F. Shappert is joined by Nathan T. Gray, Special Agent in Charge of FBI operations in North Carolina, in making this announcement. According to a factual resume filed with the bill of information and plea agreement, Harrelson admits that “he was aware of and sanctioned the use of an in-house rebate which was falsely characterized by his employees on loan applications as a down payment made by the customers.” Harrelson also admits that “he knew or should have known of the fraudulent activity” engaged in by his employees, including the use of fraudulent tax documents “and took no steps to curtail it.” Nine former employees of the Harrelson Automotive Group were charged with conspiracy to commit mail, wire and bank fraud in an indictment filed in November 2008.

If accepted by the U.S. District Court, the plea agreement calls for a sentence of two years’ probation, the payment of restitution in the amount of $1,190,596.02, and Harrelson’s resignation from all management or supervisory positions within the auto sales industry. Additionally, the plea agreement requires Harrelson to remain away from any of the dealerships owned by him or his family during the probationary period.

According to U.S. Attorney Shappert, the filing of the plea agreement should send a strong message to the automotive industry that dealership owners will be held responsible for the fraudulent activities of their employees whether they participate in the fraud, authorize it, or simply sanction it. “No business manager can operate a company permeated with fraud and bury his head in the sand to avoid responsibility for the criminal conduct of his employees,” Shappert said.