A three-year investigation has ended with the indictment of 18 people who allegedly defrauded 18 financial institutions to the tune of $1.9 million. At the heart of the two fraud schemes: 47 loans for high-end vehicles.
Here’s how the alleged fraud went down, according to New York City Police Department and the Queens County District Attorney’s Office, which conducted the joint investigation:
Twelve of the defendants are charged with conspiring with one another to purchase on credit various high-end vehicles, such as Maseratis, BMWs, Porsches, Lexus, Cadillac Escalades and Mercedes-Benzes between July 1, 2008, and March 30, 2010. In carrying out their scheme, the defendants are alleged to have used “straw borrowers” with good credit scores to take out $1.9 million in loans in exchange for kickbacks and other incentives. Once the vehicles were turned over to various members of the criminal enterprise, the vehicles were then allegedly either sold or rented out on the black market to individuals engaged in criminal activity or the vehicles’ titles were “washed” out of state and sold to dealers or at auction.
In a variation on the first scheme, nine other defendants are charged with conspiring with one another to commit loan fraud by recruiting straw borrowers to take out bank loans – allegedly to purchase used vehicles or for some other purpose, such as performing home improvements. It is alleged that, in actuality, no vehicles were purchased and no home repairs were made. As a result, the defendants are accused of obtaining more than $180,000 in fraudulent loans funds.
Essentially, straw borrowers were promised $2,000 plus improved credit scores. Instead, they “wound up with ruined credit, multiple banks suing them for money, and suspended driver’s licenses for unpaid parking tickets on vehicles they allegedly ‘own,’” said Queens D.A. Richard Brown.
Of those charged, 16 were arraigned earlier this week; the remaining two are still being sought. The next court date is Dec. 14.
