Four Convicted in $1.6 Million Luxury Automobile Loan Fraud Scheme
CHICAGO—Three Chicago-area defendants, and a fourth defendant from Decatur, Ga., were convicted of federal bank fraud charges for engaging in a scheme to fraudulently obtain 51 luxury automobile loans totaling approximately $1.6 million without ever intending that the borrowers would purchase the high-end cars that they claimed to be buying. As a result, various credit union lenders, including Credit Union 1, Great Lakes Credit Union, Navy Federal Credit Union, Pentagon Federal Credit Union, and Sherwin-Williams Credit Union, incurred losses totaling at least $853,000. Two of the four charged defendants were convicted today by a jury in U.S. District Court Andrea R. Wood’s courtroom. Two additional defendants involved in the scheme pled guilty before trial.
The two men convicted at trial yesterday were PRECIOUS W. HOUSE, 47, of Chicago, the president of Rolling Auto, Inc. of Plymouth, Ind., and XPress Automotives of Chicago, two wholesale auto dealerships that purported to be selling many of the autos. HOUSE was convicted of five counts of bank fraud. Also convicted at trial was BRIAN K. HUGHES, 41, of Homewood, the president of Hughes Corporate Consulting. HUGHES was convicted of four counts of bank fraud and one count of making false statements on a loan application. The defendants’ sentencings were set for June 2015.
Two remaining defendants pled guilty: KEITH B. FOSTER, 46, of Harvey, pled in October 2014 to one count of making false statements on a loan application. FOSTER was sentenced to 12 months’ imprisonment and has been ordered to surrender April 6, 2015. CRYSTAL WILLIAMS, 31, of Decatur, Georgia, pled guilty in September 2014 to one count of bank fraud and will be sentenced at a later date.
According to court records, between February and November 2013, defendants HOUSE and HUGHES recruited individuals seeking loans and agreed to find loans for them in exchange for a fee of 20 to 30 percent of the loan. The defendants obtained at least 36 automobile loans of the 51 total sought on behalf of the applicants, and the defendants fraudulently obtained approximately $1.12 million of the total $1.6 million for which they applied.
In order to obtain the loans, the defendants made, and caused the loan applicants to make, false representations in documents such as loan applications, vehicle purchase orders, and verifications of employment. The false statements concerned the applicants’ income, employment, credit history, intent to use the loan proceeds to purchase automobiles, and the existence of contracts obligating the borrowers to purchase vehicles from defendant HOUSE and his companies, Rolling Auto and XPress Automotives. The purchase orders falsely represented that the loan applicants had contracts to purchase from HOUSE’s dealership various luxury autos made by BMW, Chevrolet, Jaguar, Lexus, Mercedes-Benz, Nissan, and Porsche. If the individual applicants refused to cash checks obtained as part of the scheme, defendant HUGHES threatened them with civil lawsuits and criminal prosecutions. Defendant HOUSE then deposited the loan proceeds into bank accounts he controlled in Illinois, California, and Georgia.
The indictment was previously announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The Government was represented by Assistant U.S. Attorneys Christopher R. McFadden and Sunil Harjani.
Each count of bank fraud and making false statements on loan applications carries a maximum penalty of 30 years in prison and a $1 million fine, and restitution is mandatory. The Court may impose an alternate fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. The Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.