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Charlotte car dealer to plead guilty to false loan papers
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Published: January 6, 2009
CHARLOTTE
A federal prosecutor said a Charlotte car dealer has agreed to plead guilty to aiding in the filing of auto loan applications that falsely stated incomes and employment.
Prosecutors also said household appliances were falsely listed as vehicle trade-ins in some cases.
U.S. Attorney Gretchen Shappert said the plea agreement by Louis F. Harrelson, 79, should send a signal to the auto industry "that dealership owners will be held responsible for the fraudulent activities of their employees," The Charlotte Observer reported Tuesday.
Harrelson's deal allows him to spend two years on probation, imposes a $50,000 fine and requires more than $1 million in restitution.
The agreement also requires Harrelson to resign management positions in the auto sales business, the newspaper said. He is banned from appearing at the six auto dealerships he and his family own during probation. He has dealerships in North and South Carolina and got into the car business 50 years ago.
Harrelson's lawyer Pete Anderson says his client previously denied involvement in crimes committed by former employees. Anderson says his client has taken responsibility for some crimes.
Anderson said Harrelson cooperated with federal investigators, authorized an internal investigation and fired employees he believed were operating improperly.
A federal grand jury indicted 10 people last month, most former employees of Harrelson auto dealerships, for conspiracy to commit mail, wire and bank fraud between January 1999 and July 2005.
The indictment said some Harrelson employees lied about the ability of customers to pay for vehicles by falsifying incomes, down payments and employment history on loan applications.
In addition to listing appliances as traded vehicles, in-house rebates were falsely identified as down payments, the indictment said.
Prosecutors said the loans cost financial institutions more than $1.2 million and that the conduct was "open and notorious."
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