Five former Serra Nissan employees have been charged in Birmingham, Ala., in connection with an alleged conspiracy to fraudulently increase loan approvals and car sales, the FBI said in a statement.
D. Scott Burton, former sales manager, and Michael J. Wilkinson, former finance manager, have both been charged, along with former salesmen Dwight A. Perry, Terry W. Henderson Jr. and Roland W. Riley, the statement said.
“This type of fraud is the auto-industry equivalent of the mortgage fraud that contributed to the financial meltdown, and could threaten the security of our financial markets,” U.S. Attorney Joyce White Vance said in the statement.
The dealership said it cooperated with the investigation and terminated all the employees implicated in the case.
The 11-count indictment charges conspiracy, bank fraud, wire fraud and aggravated identity theft, saying the events took place between August 2010 and October 2013.
The maximum penalties for the charges range from two years in prison for identity theft to 30 years in prison and a $1 million fine for bank fraud.
The defendants are accused of defrauding financial institutions, Nissan North America and Serra Nissan customers by falsely reporting vehicle sales to increase their own profits. The five defendants were arrested Wednesday and appeared in court.
The Serra Nissan employees are accused of conspiring to gain automotive loans that would not have been approved under normal circumstances, knowing that increased loans could mean more personal commission payouts.
The indictment said they produced or adjusted documents to demonstrate inflated income for prospective buyers before submitting them to financial institutions and directing finance managers and sales staff to submit fraudulent documents that misrepresented proof of the customers’ residency.
They also listed accessories that were not included on a vehicle so the loan amount would increase and relied on “straw buyers” who could qualify for a loan, in place of the actual buyers who couldn’t, the statement said.
The defendants also issued customers an inflated monthly vehicle payment so that a finance manager could apply a warranty and GAP policies without the customer’s knowledge, the statement said.
Wilkinson, Burton, Perry and Riley were charged with submitting fraudulent loan information to financial intuitions in October 2012. The indictment also charged Wilkinson, Perry and Henderson with wire fraud for false information submitted to automotive financing companies such as Nissan Motor Acceptance Corp. and Santander Consumer USA, the statement said.