Second Serra Nissan Sales Manager Charged In Loan Fraud Conspiracy
BIRMINGHAM -- A second sales manager at Serra Nissan faces federal charges in connection with a conspiracy at the Birmingham car dealership to fraudulently boost loan approvals and car sales, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr. and IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
A federal grand jury last week indicted GERALD R. SHEPARD, 56, of Pinson, on conspiracy and bank fraud charges. A federal judge lifted the seal on the indictment this week after the government withdrew a warrant for Shepard's arrest.
The five-count indictment charges Shepard with conspiring with others at the dealership, between August 2010 and October 2013, to defraud financial institutions, Nissan North America and Serra Nissan customers by fraudulently increasing vehicle sales in order to boost personal profits. The indictment also charges Shepard with four bank fraud counts for fraudulent loan information submitted to financial institutions in September and October of 2012.
Shepard's indictment follows federal charges earlier this year against another sales manager at Serra Nissan, Abdul Islam Mughal. Mughal, 48, of Trussville, pleaded guilty in July to conspiring with others, including Serra Nissan salesmen, general managers, sales managers and finance managers, to sell more cars by falsifying loan documents in order to defraud customers, Nissan North America and financial institutions. Mughal also pleaded guilty to one count of bank fraud for submitting falsified loan documents to financial institutions between January 2012 and October 2013. Mughal is scheduled for sentencing Nov. 5.
According to the indictment against Shepard, he and other members of the conspiracy participated in various means to carry out their fraud and obtain auto loans that, otherwise, would not have been approved. Those means included the following:
- Creating or altering documents to submit to financial institutions to show inflated income for prospective buyers.
- Directing finance managers and salesmen to submit fraudulent utility bills and bank statements to financial institutions to misrepresent proof of a customer's residency.
- Listing accessories not actually included on a vehicle so a financial institution would increase its loan amount. Shepard and others had a financial incentive to increase a loan amount in order to increase commissions paid to certain employees.
- Presenting straw buyers, who could qualify for a loan, to financial institutions when the actual buyer could not qualify.
Shepard and others also defrauded customers and financial institutions by quoting a customer an inflated monthly vehicle loan payment so that a finance manager could add a warranty and gap insurance without the customer realizing it, according to the indictment.
The maximum penalty for the conspiracy count is five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years in prison and a $1 million fine.
The FBI and the IRS investigated the case, which Assistant U.S. Attorney Amanda Schlager Wick is prosecuting.
The public is reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.