For the second time this month, the Justice Department announced prison punishments for charges related to fraudulent auto financing.
Not long after getting a judge to sentence a Wisconsin man in connection with a Ponzi scheme fueled by luxury vehicles, officials announced details involving seven defendants for their roles in a bank fraud conspiracy they described as “conversions” and connected with more than 80 fraudulently obtained auto loans to create $1.7 million in bank and credit union losses.
The Justice Department said Michael Miller and Melvin Goode Wentt have been sentenced while four other co-defendants previously pled guilty. One defendant is awaiting extradition from the United Kingdom, according to a news release.
“These defendants’ ‘creative financing’ company specialized in ‘auto loan conversions,’ which was simply fraud,” U.S. Attorney Byung J. “BJay” Pak said. “This scam was designed to trick lenders, which in this case were mostly credit unions, into granting loans for sham car sales.
“While the businesses in their scheme may have been make-believe, the federal sentences they received are very real,” Pak continued.
According to Pak, the charges and other information presented in court, the defendants and their co-conspirators started the fraud scheme by incorporating businesses that, by name, appeared to be dealerships but, in fact, were just shell corporations.
Pak noted these fake companies had names like Premier Luxury Motors, Platinum Motors Auto Sales, and 5-Star Motorsports, but they had no employees, no cars, no car lots, and no dealership licenses.
After establishing the fake companies, the Justice Department said the conspirators recruited individuals to apply for auto financing with banks and credit unions. The applicants would claim that they were purchasing a vehicle from one of the fake companies and would supplement their applications with fake vehicle purchase orders created by the conspirators.
If a check was issued to the applicant, the proceeds would be deposited into financial accounts opened by the conspirators and held in the names of the fake companies, according to the information presented in court.
Then the conspirators and the applicants would then split the money and never pay back the finance company. Because there were no cars to repossess, the finance company would be left with nothing, according to the Justice Department.
Officials recapped the scheme spanned approximately four years. Over that time, the conspirators sought more than 80 auto loans, totaling approximately $2.7 million in attempted fraud, and actually obtained about $1.7 million.
A jury convicted Miller and Goode Wentt of conspiracy and bank fraud on May 14. The defendants in this case received the following sentences:
— Giovanni “Riq” Cartier of Austell, Ga., was sentenced to four years, nine months in prison, to be followed by three years supervised release, and was ordered to pay $1,706,342.74 in restitution. Cartier pleaded guilty to bank fraud conspiracy on April 18, 2018.
— Melvin Goode Wentt of Brooklyn, N.Y., was sentenced to two years, ten months in prison, to be followed by five years of supervised release, and ordered to pay $765,603.25 in restitution.
— Michael Miller of Sandy Springs, Ga., was sentenced to two years in prison, to be followed by five years of supervised release, and ordered to pay $316,826 in restitution.
— Rhaine Yamabushi of Florence, S.C., was sentenced to one year and a day in prison, to be followed by three years of supervised release, and ordered to pay $164,995 in restitution. Yamabushi pleaded guilty to bank fraud conspiracy on Dec. 6, 2018.
— Vladimir Marcellus of Ventura, Calif., was sentenced to three years probation, with 240 days of home detention, and ordered to pay $164,995 in restitution. Marcellus pleaded guilty to bank fraud conspiracy on April 27, 2018.
— Kirk Evans of Ellenwood, Ga., was sentenced to three years probation, with six months of home detention, and ordered to pay $47,799 in restitution. Evans pleaded guilty to bank fraud conspiracy on April 18, 2018.
This case was investigated by the Federal Bureau of Investigation and U.S. Postal Inspection Service.
Assistant U.S. Attorneys Samir Kaushal and John Ghose prosecuted the case.
“Bank fraud is not a victimless crime and these defendants will now have time to reflect on their choice to obtain these fraudulent auto loans,” said Chris Hacker, special agent in charge of FBI Atlanta. “The FBI treats these types of financial crimes very seriously and warns anyone considering this type of criminal activity to also consider the fate these defendants face as a deterrent.”
David M. McGinnis, U.S. Postal Inspector in charge of the Charlotte Division, added, “The defendants carried out a scheme to fraudulently obtain millions of dollars in loans to enrich themselves. The sentences handed down in this case will hold these individuals accountable for their criminal misconduct.
“Postal Inspectors will continue to work with our law enforcement partners to detect, investigate and mitigate the effects of these types of financial crimes,” McGinnis went on to say.