Jerome Garsjo Pleads Guilty in U.S. Federal Court

Bill Mercer, United States Attorney for the District of Montana, announced today that during a federal court session in Billings on August 4, 2009, before U.S. Magistrate Judge Carolyn S. Ostby, JEROME GARSJO, age 65, pled guilty to bank fraud. A sentencing date will be set later. He is currently released on special conditions.

In an Offer of Proof filed by Assistant U.S. Attorney Ryan M. Archer, the government stated it would have proved at trial the following:

GARSJO was the owner of J&S Auto Sales, which was in the business of buying, trading, and selling used vehicles. GARSJO obtained a flooring line of credit from Little Horn State Bank in the amount of $450,000.

Beginning on December 12, 2006, through June 12, 2007, GARSJO floored vehicles in excess of their value. Specifically, he overstated the price he paid for traded vehicles. This inflated the price of vehicles by providing false paperwork to the bank and forging the signatures of the sellers in order to artificially inflate the value of the vehicle.

This conduct resulted in GARSJO drawing off more funds from the bank than he was entitled to and losing a substantial amount of money since the cars used as collateral were not worth what he said they were. The bank ultimately had to charge off over $350,000 as a result of GARSJO'S misrepresentations.

When questioned on October 22, 2008, GARSJO admitted that he had created invoices to reflect an adjusted and inflated vehicle value and then used these invoices to obtain money from his flooring line of credit at Little Horn State Bank.

GARSJO faces possible penalties of 30 years in prison, a $1,000,000 fine and 5 years supervised release.

The investigation was conducted by the Federal Bureau of Investigation.