Operations Manager of St. Louis Metropolitan Towing Pleads Guilty to Fraud and Bribery Charges

ST. LOUIS, MO—The United States Attorney's Office announced today that Gregory P. Shepard pled guilty to charges of mail fraud and bribery, all involving operation of St. Louis Metropolitan Towing and S & H Parking Systems.

According to court documents, Shepard served as the Operations Manager for St. Louis Metropolitan Towing, which was affiliated with S & H Parking Systems and Parks Auto Sales, located at 1325 North 10th Street, St. Louis. St. Louis Metropolitan Towing had a contract with the St. Louis Metropolitan Police Department to tow vehicles designated by the department. Parks Auto Sales titled and sold a large number of vehicles towed by St. Louis Metropolitan Towing. Titled owners and lien holders were given 30 days to retrieve their vehicles after receiving notice. If vehicles were not retrieved within 30 days of notification, S & H Parking Systems or Parks Auto Sales could purchase the vehicles and obtain original titles by submitting various forms to the Missouri Department of Revenue. Collectively, these forms contained representations, including that the vehicles had been inspected and were in the condition described in the form; that the forms were accurate as to the identity of the seller, purchase price, purchase date and that the vehicles had been purchased by Parks Auto Sales at a police auction.

Kevin Shade, a St. Louis Metropolitan Police Department officer assigned to the Auto Theft Unit, passed vehicles obtained by Parks Auto Sales for inspection and then signed Vehicle Examination Certificates (VEC) falsely stating there was no apparent damage or only slight damage to vehicles that were materially damaged. Shade also falsely stated on the VEC that each of the vehicles had been purchased by Parks Auto Sales at "police auction."

With his guilty pleas, Shepard admitted to causing applications for original vehicle titles to be submitted to the Missouri Department of Revenue, including the false VEC forms prepared and signed by Kevin Shade containing false information. Based upon these documents, the Department of Revenue issued original titles to Parks Auto Sales, as opposed to salvage titles.

Danny's Garage, Perryville, Missouri, purchased vehicles at auction from Parks Auto Sales. Shepard introduced the owner of Danny's Garage to Kevin Shade to arrange for the inspection of vehicles purchased through Parks Auto Sales. With his guilty pleas, Shepard admitted that between October 2004 and August 2008, he accepted cash payments from a representative of Danny’s Garage in connection with Shade's inspections of vehicles purchased by Danny's Garage from Parks Auto Sales. Shepard passed these cash payments on to Kevin Shade.

GREGORY P. SHEPARD pled guilty to one felony count of mail fraud and one felony count of bribery involving federal programs before United States District Judge Rodney W. Sippel.

Mail fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000; bribery carries a maximum penalty of 10 years prison and/or fines up to $250,000. Sentencing has been set for December 10, 2010.

"This investigation is a testament to the successful collaboration and effort on the part of agents and officers from the FBI, IRS, SLMPD and prosecutors from the USAO,” said Timothy Feeney, Assistant Special Agent in Charge, FBI-St. Louis.

KEVIN SHADE, St. Louis, Missouri, 63111, awaits sentencing on October 15, 2010.

The owners of S & H Parking Systems and its affiliated companies, William and Kenneth Bialczak, each pled guilty to federal tax evasion charges on September 16, 2010, and are scheduled to be sentenced on December 3, 2010.

This case was investigated by the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the St. Louis Metropolitan Police Department. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office.