Erie, PA – 14 August 2019 – The former president of the National Independent Automobile Dealers Association and owner of Lakeside Chevrolet Buick in Erie County, Pa. has been indicted by a federal grand jury conspiracy, bank fraud and wire fraud charges according to the Department of Justice. According to the DOJ, Andy Gabler, the owner, and his Finance Officer committed over $1.8M in fraud by unpaid for warranties, falsified down payments and fraudulent inflating income statements on applications.
The scheme led to Gabler’s indictment Tuesday on 17 felony counts, including conspiracy, bank fraud and wire fraud. His initial appearance in U.S. District Court in Erie is set for Aug. 26 before U.S. Magistrate Judge Richard A. Lanzillo.
The U.S. Attorney’s Office announced the charges Tuesday, but court filings related to the case did not become publicly available until Wednesday. The indictment offers new details about the allegations against Gabler, the owner of Lakeside Auto Group, and his finance manager, Chad Bednarski, who was also indicted.
The indictment alleges that Gabler and Bednarski conspired to commit fraud between January 2015 and January 2019.
As part of the scheme, the government charged, the two did not inform Gabler’s lender, S&T Bank, when Lakeside Auto dealerships sold vehicles that had been purchased using “floor-plan financing” from the bank, in an effort to “delay and attempt to avoid the dealerships’ required payment to S&T for the sold vehicles.”
S&T Bank conducted monthly audits to verify vehicle sales at Lakeside Auto’s locations in Harborcreek Township, North East Township and Girard, according to the indictment.
But Gabler and Bednarski evaded the audits by using fake buyer’s orders with sales dates later than the actual vehicle sales to justify the dealerships’ late payments to the bank, the government charged.
This practice, also known as selling vehicles “out of trust,” involves failing to use the proceeds from vehicle sales to pay off bank loans as required. Selling vehicles out of trust prevents banks from repossessing the vehicles to recoup their losses because the dealership has already titled the vehicle to the new owner.
The indictment lists six occasions between April 2016 and December 2017 when Gabler and Bednarski are accused of submitting fake buyer’s orders during S&T Bank audits.
S&T Bank, of Indiana, Pennsylvania, lost about $1.88 million as a result of the scheme, the indictment charges.
In July and August 2018, Gabler also submitted auto loan applications and received funding on those loans for extended warranties that the dealership never paid for, according to the indictment.
The indictment also accuses Gabler of selling extended warranties to customers and failing to remit the paperwork, leaving customers unaware that they did not possess the extended warranty they had paid for.
And Gabler is accused of falsifying loan application documents by indicating that customers had made a down payment toward a vehicle or falsely inflating customers’ income.
Gabler has no lawyer listed in public court records as of Wednesday. Bednarski is also scheduled to have his initial appearance on Aug. 26 before Lanzillo.
Gabler lost control of his businesses, known as Lakeside Auto Group, in January, after S&T Bank raised concerns about the dealerships’ practice of selling vehicles out of trust.
Erie County Judge Daniel Brabender appointed a receiver to control the businesses at S&T Bank’s request. The bank had filed default judgments totaling about $7.8 million against Gabler, Lakeside Auto and its affiliate, Lakeside Acquisition Group.
S&T Bank recouped only about $3.3 million through the receivership, court records show. The receiver, the Hillyer Group LLC, of Cuyahoga Falls, Ohio, sold off Lakeside Auto’s assets, including everything from vehicles to furniture, to recover the bank’s losses.
Lakeside Auto’s financial troubles became clear after the FBI searched the dealership’s three locations and Gabler’s Harborcreek residence in late January.
Source: GoErie.com
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