President of Galemore Motor Company of Charleston Pleads Guilty to Bank Fraud Charges
|U.S. Attorney’s Office October 15, 2012|
CAPE GIRARDEAU, MO—Richard Galemore pled guilty involving his out-of-trust sale of more than 40 vehicles, or approximately one-half of the dealership’s total inventory, which caused the bank to suffer a loss on the loan in excess of $500,000.
According to court documents, for approximately 20 years until September 2008, the financing mechanism for Galemore’s used car inventory was a “floor plan loan” from the bank. When an automobile is purchased, the bank takes a secured interest in the automobile for the amount borrowed or “floored.” When the dealer sells the floored automobile, he must immediately repay the floored amount. Typically, Galemore would repay the bank on the day of a sale or, at the latest, the next day. In order to protect its collateral, the bank would present Galemore with a list of automobiles purchased through the loan. The list would include each and every automobile believed to be in his possession in accordance with the terms of the loan, which he would sign to affirm that the collateral listed on it was indeed his possession.
In March and July 2008, as was the custom under the loan, a representative of the bank performed “spot checks” of the inventory list supposedly in Galemore’s possession under the terms of the loan. Although the spot checked vehicles were present, approximately 12 and 30 vehicles, respectively, on the inventory list were no longer in his possession, having been “sold out of trust.” Galemore sold the automobiles, kept the proceeds, and failed to repay any of the money due the bank under the loan agreement. Despite this fact, he signed the inventory list acknowledging he had all the listed automobiles under the terms of the loan.
In September 2008, Galemore abruptly closed his dealership in Charleston and did not notify the bank. Several days later, a representative of the bank arranged to meet with Galemore, who admitted that he was “out of trust” and many of the vehicles the bank representative had come to repossess were not on the lot as the representative would expect.
Richard Gilmore, 65, Cape Girardeau, Missouri, pled guilty to one felony count of bank fraud before United States District Judge Audrey G. Fleissig this morning in Cape Girardeau. Sentencing has been set for January 22, 2013.
This charge carries a maximum penalty of 30 years in prison and/or fines up to $1 million. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.