Michael Ross Franco, a former loan officer for the $274 million My Community Federal Credit Union in Midland, Texas, was sentenced to 18 months in federal prison Monday for his role in approving 487 fraudulent auto loans totaling $7 million and accepting more than $29,000 in kickbacks, according to the U.S. Attorney’s office there.
In addition to the prison term, U.S. District Court Judge Robert A. Junell ordered Franco, 41, to pay $4.1 million in restitution to the credit union. After completing his prison term, Franco will be placed under supervised release for five years, the U.S. Attorney reported.
Franco pleaded guilty in November 2012 to one count of conspiracy to commit bank fraud.
According to court records, Franco worked as a loan officer with My Community Federal Credit Union from May 2006 until October 2008.
During that time, Franco admitted approving 487 fraudulent auto loans totaling more than $7 million. The fraudulent auto applications overstated or misstated the customer’s income, the customer’s debt-to-income ratio and/or the customer’s credit score, court records show.
Franco also admitted to accepting more than $29,000 in kickbacks from co-conspirators for his role in the scheme.
The co-conspirators, Raymond Holguin Jr., operator of Motor City, an auto dealership in Odessa, Texas, and Gustavo Pizarro, general sales manager at Motor City, have pleaded guilty to the one count of conspiracy to commit bank fraud, according to the U.S. Attorney’s office. They are scheduled to be sentence on Jan. 9.