Olive Branch Man Sentenced for Two Separate Fraud Schemes Totaling More Than $2 Million

Memphis, TN – An Olive Branch, Mississippi man has been sentenced to nine years for executing two separate fraud schemes that defrauded victims of more than $2 million. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentence today.

According to information presented in court, between December 2012 and October 2014, Anthony Davis, 44, of Olive Branch, Mississippi, owned ADLM Automotive, Inc., a Mississippi-based wholesale automobile dealership that conducted business in Memphis. He used the company to promote a purported investment opportunity that ultimately defrauded investors of nearly $1.8 million.

During the aforementioned time period, Davis fraudulently told victims that they could purchase a Retail Installment Contract and Security Agreement (RICSA) from him through ADLM Automotive. He also told them that when he sold a vehicle to a customer and the customer financed any part of the purchase price, the customer would sign a RICSA, and an application for a title with the appropriate state (e.g., Tennessee, Arkansas, or Mississippi) agency responsible for issuing vehicle titles. Davis represented to the victims that they would have a perfected security interest in the vehicle which was the subject of the RICSA because their security interest would be noted on the Certificates of Title.

Davis told victims that monthly payments on the RICSAs would be collected by a Georgia-based company known as Vehicle Acceptance Corporation (VAC), and that each customer had signed an Automated Clearing House (ACH) payment form so that monthly payments would be automatically deducted from their bank account. Davis further represented that ADLM Automotive maintained an account with VAC and would direct VAC to route customers’ payments to the victims’ bank accounts. More so, Davis told the victims that if a customer defaulted and failed to make payments under the terms of the RICSA, ADLM Automotive would repurchase the non-performing loan, or give the victim the option of replacing the non-performing loan with a performing loan of equal or greater value.

Due to his fraudulent representations, Davis received investments from multiple victims. All along, Davis knew the RICSAs, customers, vehicles and titles did not exist.

In addition, and according to the charging document, Davis executed a separate fraud scheme between January 2014 and August 2014. This scheme involved Davis searching for and obtaining Social Security Numbers to create fraudulent credit profiles. The credit profiles and other false and fraudulent identifying information were used to obtain credit to finance the purchase of vehicles. As a result of the scheme, Davis and co-conspirators fraudulently obtained and attempted to obtain credit to finance the purchase of approximately 16 vehicles. The losses associated with this scheme were more than $457,000.

In December 2015, Davis pled guilty to two counts of wire fraud before U.S. District Judge John T. Fowlkes Jr.

On Friday, March 4, 2016, Judge Fowlkes sentenced Davis to nine years in prison.

The amount of restitution Davis will pay to victims will be determined on Wednesday, March 9, 2016. In the agreement filed at the time of his plea, Davis agreed to pay restitution in the total amount of $1,763,829.50 to those victimized in the first scheme; and a total amount of $457,507.06 to those victimized in the second scheme.

The case was investigated by the U.S. Postal Inspection Service, U.S. Marshal’s Service, and the Social Security Administration – Office of Inspector General.

Assistant U.S. Attorney Carroll L. Andre III prosecuted this case on the government’s behalf.