Several financial institutions, including a credit union, were victims of a $1.7 million fraud scheme that involved financing on vehicles that were already sold.

According to the Acting United States Attorney for the Western District of Missouri, Aaron Matthew Payne pleaded guilty May 29 to bank fraud. Through three auto dealerships that he owned and operated, Payne was able to secure more than $1 million in lines of credit with several financial institutions.

Beginning in March 2007, Payne engaged in a scheme that involved financing for 118 vehicles, according to a Sept. 2, 2011 federal indictment. Payne admitted to taking the money to benefit his dealerships by misrepresenting vehicles that were bought through the lines of credit. Authorities said Payne carried vehicles on his businesses' floor plans as part of his inventory even though the vehicles had already been sold.

As a result, several financial institutions sustained losses, including the $237 million Missouri Credit Union in Columbia, Mo., Blue Ridge Bank & Trust, Jefferson Bank of Missouri, Boulevard Bank, Dealer Services Corp., Ford Motor Credit Co. and Manheim Automotive Financial Services, according to the indictment. The Callaway Bank may have taken the biggest loss at $1.2 million on 78 vehicles.

Payne now faces up to 30 years in prison without parole and a fine of up to $1 million. A sentence hearing has not yet been scheduled.

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