Columbia Automotive Dealer Pleads Guilty to $1.7 Million Bank Fraud Scheme
|U.S. Attorney’s Office June 04, 2012|
JEFFERSON CITY, MO—David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced today that the owner of three Columbia, Missouri auto dealerships has pleaded guilty in federal court to an alleged $1.7 million bank fraud scheme that involved financing for more than 100 vehicles.
Aaron Matthew Payne, 39, of O’Fallon, Missouri, pleaded guilty on Tuesday, May 29, 2012 to the charge contained in a September 2, 2011 federal indictment.
Payne was the owner and/or operator of Columbia Car Classics Inc.; Mid-America Truck Sales, II Inc.; and Kingdom Auto, II Inc., businesses in Columbia that primarily sold pre-owned and luxury vehicles. Payne obtained in excess of $1 million in lines of credit for these businesses through his agreements with several financial institutions.
By pleading guilty today, Payne admitted that, beginning in March 2007, he engaged in a scheme to defraud several financial institutions. The government contends that Payne’s scheme, which involved financing for 118 vehicles, resulted in a total loss of $1,751,407. According to the government, The Callaway Bank sustained more than $1.2 million in losses related to 78 vehicles. Other financial institutions that sustained losses as a result of Payne’s scheme included Missouri Credit Union, Dealer Services Corporation, Manheim Automotive Financial Services, Blue Ridge Bank and Trust, Boulevard Bank, Ford Motor Credit Company, and Jefferson Bank of Missouri.
Payne admitted that he took money by deception and fraud and used the funds in an unauthorized and unapproved manner for the benefit of his companies. Payne did this by knowingly misrepresenting and mischaracterizing vehicles purchased under the available lines of credit in violation of the agreements. For example, Payne carried vehicles on the businesses’ floor plan as if they were a part of inventory, when the vehicles had actually been sold.
Payne knowingly misrepresented his inventory to The Callaway Bank, as well as the status and quality of the collateral for loans made by the bank to his businesses. Payne falsely stated the quantity of vehicles in inventory, and falsely represented the ownership of vehicles, the outstanding liens, and other existing financing on the vehicles. Payne sold vehicles and then purposely failed to report the sales and transfer the proceeds of those sales to The Callaway Bank.
Under federal statutes, Payne is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $1 million. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Anthony P. Gonzalez. It was investigated by the FBI.