Federal prosecutors recently landed a conviction involving a trio operating an elaborate auto-finance fraud arrangement in North Carolina.
Andrew Murray, U.S. Attorney for the Western District of North Carolina, said a federal jury in Charlotte returned a guilty verdict against Kimberlie Flemings of Mt. Holly, N.C., for her role in a $1 million fake auto-finance scheme.
The jury found Flemings guilty of conspiracy to commit wire and bank fraud; wire fraud affecting financial institutions; and multiple counts of financial institution fraud. U.S. District Judge Robert Conrad presided over the trial.
Officials said two of Flemings’ co-conspirators, Stanley Reginald Barron, 38 of Cornelius, N.C., and Brian Lyles, 46, formerly of Jersey City, N.J., previously pleaded guilty to conspiracy to commit wire and bank fraud. Lyles also pleaded guilty to bank fraud. They are currently awaiting sentencings.
According to evidence presented at trial, witness testimony and filed court documents, from at least 2012 to 2015, Flemings, Barron, Lyles and others submitted dozens of fraudulent auto finance and personal loan applications in their names, and the names of at least 30 other individuals they had recruited to participate in the scheme, to at least 19 banks and credit unions. As a result of the fraudulent applications, the co-conspirators obtained more than $1 million in fraudulent loan proceeds.
To facilitate the fraud, officials said the co-conspirators created fake car dealerships that purported to be the sellers of vehicles purchased with the fraudulent contracts. The co-conspirators also set up bank accounts, websites and addresses associated with these fake dealerships, and created fictitious purchase orders which were submitted to the financial institutions as part of the loan application.
Officials continued that Flemings, Barron and Lyles deposited the fraudulently-obtained checks from the financial institutions into accounts Barron controlled. After keeping a portion of the fraudulent loan proceeds, Barron distributed the rest to Flemings, Lyles and others.
According to court records, the majority of the loans defaulted, causing losses to the impacted financial institutions. To cover up the fraud, Barron and others made false statements to the defrauded banks and credit unions that attempted to collect on the debts, including that borrowers had been the victims of identity theft and that they had not authorized the loans.
Flemings is currently released on bond, according to officials. Each of the charges the defendant was convicted of carries a maximum sentence of 30 years in prison and a $1-million fine.
Officials added a sentencing date has not been set.
In making the announcement, Murray thanked the Postal Inspection Service (USPIS) and the Office of Inspector General of the Federal Housing Finance Agency for their investigation of the case, and recognized the North Carolina Division of Motor Vehicles for its assistance.