Former Manteno Car Dealer Charged with $2.5 Million Bank Fraud
|U.S. Attorney’s Office December 07, 2011|
URBANA, IL—A grand jury has charged the owner of a Manteno, Illinois, car dealership with bank fraud and money laundering. The indictment charges Thomas McClain, 57, of Bourbonnais, Ill., who owned and operated Don McClain Ford during the time of the alleged scheme, from Jan. 31, 2008, to February 2010.
The indictment, which was returned by the grand jury yesterday, alleges that McClain defrauded a local bank of more than $2.5 million. During the period of the alleged scheme, McClain had an agreement with the bank for various operating loans as well as a ‘floor plan’ agreement with Ford Motor Company to obtain new Ford vehicles on credit to sell to customers. In exchange, McClain agreed to pay Ford Motor Credit the outstanding liability for a particular vehicle when it was sold. McClain was required to provide Ford Motor Credit with a month-end balance sheet.
The indictment alleges that McClain caused fraudulent end-of-month adjusting entries to be made to the dealer financial statements to make it appear that the dealership had a positive month-end cash balance, when in reality, often it had a negative cash balance. McClain allegedly submitted the false statements to Ford Motor Credit and to the bank in order to obtain and maintain the loans.
According to the indictment, Ford Motor Credit conducted an audit of the dealership in February 2010 and discovered that McClain had allegedly defrauded Ford Motor Credit by selling new vehicles to customers, but failed to report the sale or pay the outstanding liability.
The U.S. Clerk of the Court will issue a summons for McClain to appear in federal court in Urbana.
If convicted, bank fraud carries a maximum statutory penalty of 30 years in prison; the penalty for money laundering is up to 10 years in prison.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
The charges are the result of an investigation by the Internal Revenue Service Criminal Investigation Division; FDIC Office of Inspector General; and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Eugene L. Miller.