Prison Terms Imposed in Bank Fraud Case Court Also Orders $7 Million in Restitution
| U.S. Attorney’s Office January 06, 2011 |
DES MOINES, IA —On January 6, 2011, Daniel A. Nelson, age 42, of Sioux Falls, South Dakota, and Christian J. Tapken, age 40, of Austin, Texas, were sentenced for their participation in a conspiracy to cause false entries in bank records, announced United States Attorney Nicholas A. Klinefeldt. United States District Court Judge James E. Gritzner sentenced Daniel A. Nelson to 30 months’ imprisonment, to be followed by a term of three years of supervised release. Judge Gritzner sentenced Christian J. Tapken to 18 months’ imprisonment, to be followed by a term of three years’ supervised release. The defendants were also ordered to pay restitution in the amount of $7,000,000. Each defendant was also ordered to pay a $100.00 assessment to the Crime Victim Fund. Each defendant remained on release under supervision of the United States Probation Office pending designation of the Federal Bureau of Prisons facility in which he is to serve his sentence of imprisonment.
“These sentences reinforces the seriousness of economic crimes,” stated United States Attorney Klinefeldt, who commended the efforts of investigators from the Federal Bureau of Investigation and United States Postal Inspection Service in unraveling the conspiracy. “We will continue to aggressively prosecute this types of fraudulent conduct and seek prison sentences for wrongdoers.”
Weysan Dun, Special Agent in Charge of the FBI Omaha Division stated, “Addressing fraud and this type of conspiracy has always been an important priority of our FBI office. It is even more so under the current economic circumstances in our country. Those who believe they can get away with fraud such as this will have to face justice and will ultimately serve a significant sentence in prison.”
Each defendant was originally charged with various counts of fraud in an Indictment filed in the Southern District of Iowa in November of 2008. Each defendant appeared in the United States District Court in Des Moines on September 21, 2010, and pled guilty to a United States Attorney Information charging conspiracy to cause false entries in bank records. The charge arose out of the lending relationship between the Dan Nelson Automotive Group, South Dakota Acceptance Corporation and various other entities owned and operated by the defendants and a consortium of banks. The defendants pled guilty to presenting fraudulent loan compliance reports to thirteen banks across the Midwest, which reports became bank records regarding the loans. The monthly reports submitted to the banks contained falsified numbers concerning the delinquency, recency and receivables regarding vehicle sale loans of South Dakota Acceptance Corporation. The conspiracy lasted from at least 2001, through June of 2005, when the companies failed, and the banks took over operation of the companies in order to liquidate them.
The Dan Nelson Automotive Group and South Dakota Acceptance Corporation operated as vehicle sales companies in Des Moines, Council Bluffs and Sioux City, Iowa, and Sioux Falls and Rapid City, South Dakota. The companies originally sold sub-prime used vehicles, later expanding into prime used vehicles and certain lines of new vehicles. The banks affected by the conspiracy were located in the Southern District of Iowa, the Northern District of Iowa, South Dakota, Minnesota and Indiana.
These companies were the subject of a civil consumer enforcement action by the Iowa Attorney General brought in January of 2005, in the District Court of Iowa for Polk County. As a result of the enforcement action the defendants surrendered the ability to carry on vehicle sales operations in the State of Iowa.
Also charged in a separate Information in the Southern District of Iowa regarding this case is Daniel Paulson. He is also charged with conspiracy to cause false entries in bank records. Paulson was an employee of the defendants’ companies, serving as the Chief Financial Officer of the corporations. He is awaiting sentencing.
The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa. The case was investigated by the Federal Bureau of Investigation and the United States Postal Inspection Service.