The owner and finance manager of two Erie County, Pa.-based dealerships — Lakeside Auto and Lakeside Chevrolet — have been indicted on 17 counts of auto fraud, according to an announcement by the Department of Justice on Tuesday.
According to the indictment, Owner and former President of the National Independent Automobile Dealers Association, Andrew Gabler, and Finance Manager Chad Bednarski allegedly participated in a range of fraudulent activity involving consumers, lenders, and finance and insurance providers between January 2015 and January 2019. If convicted, Gabler faces up to 510 years in prison and a $17 million fine. Bednarski faces a maximum sentence 330 years in prison and an $11 million fine.
Gabler and Bednarski are charged with inflating consumers’ income on loan applications and falsely claiming that down payments were made. The pair allegedly withheld paperwork and payments on extended warranties consumers bought for their vehicles at two dealerships.
In addition, the indictment claims that the two men falsely reported vehicle sales to General Motors in order to obtain soon-to-expire incentive rebates. When a vehicle was sold, the dealerships withheld payments from floorplan financier S&T Bank.
The indictment is the latest in the Pennsylvania Attorney General’s increase in enforcement actions. Back in May, the AG sued Auto Now, alleging that the buy-here-pay-here dealership knowingly advertised a non-existent credit restoration program.
In September 2018, another Erie, Pa.-based dealership group was involved in a fraud scheme that resulted in $2 million in fines and restitution for selling vehicles at inflated prices to subprime borrowers who couldn’t afford them.