A former loan officer running an auto loan kickback scam at My Community Federal Credit Union was arrested and pleaded guilty this week to swindling the lender out of more than $4 million.
Michael Ross Franco worked as a loan officer at the $255 million My Community in Midland, Texas, from May 2006 through October 2008, according to the U.S. Federal District Court, also based in Midland. During his tenure, Franco approved roughly 487 fake loans for a dealership named in the court’s report.
Franco, working with the dealership’s operator and general sales manager, greenlighted loans without verifying their paperwork, the court found, and some loans were approved before applications were received. According to the court document, Franco made false statements about customers’ debt-to-income ratios, income, credit scores and purchased car values.
The former loan officer received more than $29,000 in kickbacks in exchange for approving the loans. He pleaded guilty to conspiracy to commit bank fraud Tuesday, and is facing up to 30 years in a federal prison, a $1 million fine and restitution to My Community, and up to five years of supervised release upon sentence completion.
“The incident occurred over [three] years ago and is currently being investigated by the Midland FBI and the U.S. Attorney’s Office,” a statement from My Community to the local media said. “The credit union was and is federally insured and bonded and continues to be a financially strong institution.”
