JEFFERSON CITY, MO—David M. Ketchmark,
Acting United States Attorney for the Western District of Missouri, announced
today that the owner of three Columbia, Missouri auto dealerships has pleaded
guilty in federal court to an alleged $1.7 million bank fraud scheme that
involved financing for more than 100 vehicles.
Aaron Matthew Payne, 39, of O’Fallon,
Missouri, pleaded guilty on Tuesday, May 29, 2012 to the charge contained in a
September 2, 2011 federal indictment.
Payne was the owner and/or operator of
Columbia Car Classics Inc.; Mid-America Truck Sales, II Inc.; and Kingdom Auto,
II Inc., businesses in Columbia that primarily sold pre-owned and luxury
vehicles. Payne obtained in excess of $1 million in lines of credit for these
businesses through his agreements with several financial institutions.
By pleading guilty today, Payne admitted
that, beginning in March 2007, he engaged in a scheme to defraud several
financial institutions. The government contends that Payne’s scheme, which
involved financing for 118 vehicles, resulted in a total loss of $1,751,407.
According to the government, The Callaway Bank sustained more than $1.2 million
in losses related to 78 vehicles. Other financial institutions that sustained
losses as a result of Payne’s scheme included Missouri Credit Union, Dealer
Services Corporation, Manheim Automotive Financial Services, Blue Ridge Bank
and Trust, Boulevard Bank, Ford Motor Credit Company, and Jefferson Bank of
Missouri.
Payne admitted that he took money by
deception and fraud and used the funds in an unauthorized and unapproved manner
for the benefit of his companies. Payne did this by knowingly misrepresenting
and mischaracterizing vehicles purchased under the available lines of credit in
violation of the agreements. For example, Payne carried vehicles on the
businesses’ floor plan as if they were a part of inventory, when the vehicles
had actually been sold.
Payne knowingly misrepresented his
inventory to The Callaway Bank, as well as the status and quality of the
collateral for loans made by the bank to his businesses. Payne falsely stated
the quantity of vehicles in inventory, and falsely represented the ownership of
vehicles, the outstanding liens, and other existing financing on the vehicles.
Payne sold vehicles and then purposely failed to report the sales and transfer
the proceeds of those sales to The Callaway Bank.
Under federal statutes, Payne is subject
to a sentence of up to 30 years in federal prison without parole, plus a fine
up to $1 million. A sentencing hearing will be scheduled after the completion
of a presentence investigation by the United States Probation Office.
This case is being prosecuted by
Assistant U.S. Attorney Anthony P. Gonzalez. It was investigated by the FBI.
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