1 / 24

Bank Fraud in Automotive Dealerships

Bank Fraud in Automotive Dealerships. ACFE Computer Crimes and Fraud Seminar May 11, 2010. gvo3. & Associates. Gil Van Over. President of gvo3 & Associates AFIP Certified Mentor Associate Member of NADC Member of DealerTrack’s Compliance Advisory Counsel

Download Presentation

Bank Fraud in Automotive Dealerships

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Bank Fraud in Automotive Dealerships ACFE Computer Crimes and Fraud Seminar May 11, 2010

  2. gvo3 & Associates Gil Van Over • President of gvo3 & Associates • AFIP Certified Mentor • Associate Member of NADC • Member of DealerTrack’s Compliance Advisory Counsel • Writes for Dealer Magazine and Dixon Hughes’ Strategic Newsletter

  3. Bank Fraud • Falsifying Credit Applications • Power booking • Falsifying Down Payment • Forgery • Employee Theft

  4. Falsified Credit Applications

  5. Power Booking

  6. Case Study #1 • Sarasota 500 LLC - owns dealerships in Florida • Seven cases dating back 10 years • Forged customer signatures • Altered credit applications • Falsified down payments • Power booking

  7. Case Study #2 • Alan Vester Auto Group – owns dealerships in North Carolina • Class Action Lawsuit • Case involves customers who purchased used cars since 2002 • Falsified down payments

  8. Case Study #3 • Al Long Ford, Inc - Michigan • Case filed by Lender – Michigan First Credit Union • Falsified down payment • Falsified income and employment on credit application • Plaintiff was awarded $361,000 for Fraud and Breach of Contract

  9. Case Study #4 • Hargrove and Toadvine – Owners of Car Connection – South Carolina • Falsified income • Power booking • Defendants pled guilty to conspiracy to commit bank fraud - serving 40 months in prison and ordered to pay $421,000 in restitution

  10. gvo3 Audit Findings • Falsified down payments • Review notes in deal jacket of possible fraudulent activity • Review receipts and rebate forms for proof of down payment • Falsified credit applications • Compare information provided on written credit application to information provided in electronic programs such as DealerTrack or Route One

  11. gvo3 Audit Findings • Falsified credit applications • Compare information given on credit application to proof of income stips • Review proof of income stips to ensure they are not fraudulent • Forged signatures • Compare signatures of all deal jacket documents looking for consistency • Review notes in deal jacket indicating documents need signature

  12. gvo3 Audit Findings • Fraudulent paystubs • Review paystubs for authenticity and accuracy • Validate income • Call employer for proof of employment • Audit dealer employee desktop looking for payroll programs • Power booking • Compare book out sheets confirming the options and mileage are correct

  13. Case Study #5 • Hernandez and Gutierrez-Bonilla Owners of Downey Motorcars - California • Investigation dates back to 2005 • Fraudulent credit applications • Identity theft • Owners double financed the same vehicles with multiple lenders

  14. Case Study #6 • Michael Holley – Owner of multiple dealerships in Florida • Defrauded customers by failing to payoff trade-ins • Defendant pled no contest to grand theft - serving 2 years in prison, 43 years probation and ordered to pay $167,000 in restitution

  15. Case Study #7 • Dayton Diaz – Sales Manager for Rick Case Acura – Florida • Identity Theft • Sold personal customer information • Defendant pled guilty to mail fraud conspiracy – possible 2-3 year prison sentence

  16. Case Study #8 • Davina Smith - Employee at Drive Time Auto Sales - Florida • Identity Theft • Stole over 200 social security numbers from customers • Smith facing fraud and identity theft charges in Florida • Smith facing similar charges in Georgia

  17. Case Study #9 • Shawn McDonald - Salesman for Hub City Ford – Florida • Identity Theft • Stole over 30 customer’s identities • Charged with grand theft and personal use of information

  18. Case Study #10 • Melissa O’Donnell – Accountant for Faulkner Auto - Pennsylvania • Used company funds to pay for personal debt • O’Donnell was sentenced to 6 to 23 months, 5 years probation and ordered to pay over $116, 000 in restitution

  19. gvo3 Audit Findings • When conducting a walk-through, look for suspicious activity that could result in employee identity theft

  20. Best Practices to Avoid Bank Fraud • Conduct background checks on potential new hires • Implement policies and procedures that forbids bank fraud • Train employees on policies • Require employees to sign acknowledgement form regarding policies • Immediate termination for any employee who does not comply with policies

  21. Best Practices to Avoid Bank Fraud • Require that all stips sent to a lender be retained in the deal jacket • Make a manager sign the book out sheet confirming the options and mileage are correct • Periodically verify that the credit application information on the paper document is consistent with the information provided to the lenders via DealerTrack, Route One and/or CUDL • Do not permit any consumer to sign a blank document, including credit applications and contracts • Conduct periodic audits of deal jackets to ensure compliance

  22. Consequences for Committing Bank Fraud • Fines and Restitution • Federal Prison • Suspicious Activity Report filed by lending institutions

  23. Suspicious Activity Report

  24. Questions? www.gvo3.com 312.962.9065 gil@gvo3.com

More Related