Federal and state authorities, including prosecutors in Alabama, New York, and Texas, are looking at used car dealerships that finance subprime auto loans, according to an Oct. 1 New York Times report. The Times said prosecutors have found hundreds of fraudulent loans that together total millions of dollars.
The report’s sources say the investigations are examining whether dealerships are inflating borrowers’ income or falsifying employment information on loan applications to ensure that anyone, no matter what their credit quality, can buy a car.
Meanwhile, an Oct. 2 report in The Birmingham News detailed alleged fraud at a local Serra Nissan dealership. According to the report, U.S. Attorney Joyce Vance charged that defendents falsified customer information used to make loans, defrauded the banks who trusted the dealership to present truthful information during the vehicle financing process, and harmed customers by fraudulently inflating the value of the vehicles they purchased.
The 11-count indictment charges the five men with conspiring with others at the dealership, between August 2010 and October 2013, to defraud financial institutions, Nissan North America and Serra Nissan customers by fraudulently increasing vehicle sales in order to boost personal profits.
