Daniel Young Arraigned and Pleads Guilty in U.S. Federal Court
|U.S. Attorney’s Office February 06, 2013|
The United States Attorney’s Office announced that during a federal court session in Billings on February 5, 2013, before Chief U.S. District Judge Richard F. Cebull, Daniel Young, a 35-year-old resident of Billings, was arraigned and pled guilty to bank fraud. Sentencing is set for May 8, 2013. He is currently released on special conditions.
In an offer of proof filed by Assistant U.S. Attorney Jessica T. Fehr, the government stated it would have proved at trial the following:
Young owned and operated Auto Plaza Inc. in Billings. Auto Plaza sold used vehicles along with new and used boats, ATVs, motorcycles, snowmobiles, and recreational vehicles. Two other individuals were co-owners and/or partners with Young from 2007 to 2010; however, Young was the primary operator of the business. Young operated the dealership and handled the day-to-day financial transactions.
Auto Plaza Inc. maintained day-to-day operations with the assistance of several financing companies (also referred to as a “floor plan”), including Dealer Services Corporation and First Interstate Bank (FIB). The dealership typically acquired their inventory through the Auto Auction in Billings. After a vehicle was sold by Auto Plaza Inc., the company that provided the financing to originally purchase the car was to be paid off with the proceeds of the sale. The paying off of any liens on vehicles by the financing company allowed for a clear title to be passed on to the new buyer of the vehicle.
In approximately October 2010, FIB canceled the $500,000 floor plan at the Auto Plaza. In approximately November 2010, Dealer Services Corporation also canceled their financing at the Auto Plaza.
During the course of the investigation, it was learned that the dealership was out of trust possibly since the day they obtained their floor plan loan with FIB as well as Dealer Services Corporation; the dealership sold vehicles with unpaid liens and failed to provide new owners titles; the dealership sold vehicles they did not pay for; the dealership sold extended warranties for vehicles that were not actually purchased from the warranty companies; and the dealership sold vehicles/boats they held on consignment and did not pay the owner.
Specifically, on August 1, 2008, in Billings, Young sold a 2005 Mastercraft boat with a lien held by Key Bank N.A., of Brooklyn, Ohio. When Young sold the boat at the Auto Plaza, he caused the submission of false loan documents to First Interstate Bank, in that the new purchaser was told there was no lien on the boat. First Interstate Bank believed they were obtaining a first position on the title of the boat and authorized the loan. The loan was funded by First Interstate Bank and the Auto Plaza received the money for the boat purchase. In furtherance of the scheme, Young lied to a personal banker at First Interstate Bank about the payoff of the lien to Key Bank N.A., and caused the submission of a false lien release to the Montana Division of Motor Vehicles on behalf of Key Bank for the boat.
Young faces possible penalties of 30 years in prison, a $1,000,000 fine, and five years’ supervised release.
The investigation was conducted by the Federal Bureau of Investigation.