Two Serra Nissan Managers Charged In Loan Fraud Conspiracy
BIRMINGHAM -- Federal prosecutors today charged two former managers at Serra Nissan in connection with a conspiracy at the Birmingham car dealership to boost loan approvals and car sales fraudulently, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot and FBI Special Agent in Charge Richard D. Schwein Jr.
The U.S. Attorney's Office filed a three-count information in U.S. District Court charging former Serra Nissan sales manager GERALD R. SHEPARD, 56, of Pinson, with conspiracy, bank fraud and subscribing to a false tax return. The U.S. Attorney filed a separate two-count information charging JEFFREY R. GREEN, 33, of Porterdale, Ga., a former Serra Nissan finance manager, with conspiracy and failure to file an individual tax return. A federal grand jury indicted Shepard on similar charges in August, but he has agreed to plead guilty to the charges filed today. The government agrees to dismiss the August indictment when Shepard is sentenced on the new charges.
"These defendants are charged with conspiring to defraud customers and financial institutions who trusted the dealership to provide truthful information during the vehicle financing process," Vance said.
"Car-buyers who trusted this dealership to honestly handle their vehicle financing and financial institutions that provided loans through the dealership all became victims of fraud perpetrated to increase vehicle sales," Schwein said. "The public can expect that the FBI will continue to aggressively investigate loan fraud to protect consumers and the nation's financial system."
"The charges against these two defendants clearly illustrate that all individuals who engage in these types of illegal activities will be held accountable for their actions," Hyman-Pillot said. "These defendants not only manipulated the system and falsified documents with the intention of increasing profits at the expense of others; they also ignored the federal tax laws with regards to their own personal income tax returns."
Prosecutors charged both Shepard and Green with conspiring with others at the dealership, between August 2010 and October 2013, to defraud financial institutions and Serra Nissan customers by submitting false information to lenders to increase vehicle sales in order to boost personal profits.
The information filed against Shepard also charges him with submitting a false tax return for 2012. The information against Green charges him with failing to file his Individual Income Tax Return with the IRS for tax year 2012.
The charges against these Serra Nissan managers follow federal charges earlier this year against six other sales managers, finance managers and salesmen at Serra Nissan, including Abdul Islam Mughal, D. Scott Burton, Michael J. Wilkinson, Dwight A. Perry, Terry W. Henderson, Jr., and Roland W. Riley. Mughal, 48, of Trussville, pleaded guilty in July to conspiring with other Serra Nissan salesmen and managers to sell more cars by falsifying loan documents in order to defraud customers 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 May 21, 2015. The charges against Burton, Wilkinson, Perry, Henderson, and Riley are pending and that case is scheduled for trial March 16, 2015.
According to the charges against Shepard and Green, they 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 documents 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. The defendants 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.
The defendants 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 maximum penalty for subscribing to a false tax return is 3 years in prison and a $100,000 fine. The maximum penalty for failing to file an individual tax return is 1 year in prison and a $25,000 fine.
The IRS and the FBI investigated the case, which Assistant U.S. Attorneys Amanda S. Wick and Robin B. Mark are prosecuting.
The public is reminded that an information contains only charges. Defendants are presumed innocent unless and until proven guilty.