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

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

Beginning in March 2007, Payne engaged in a scheme that involvedfinancing for 118 vehicles, according to a Sept. 2, 2011 federalindictment. Payne admitted to taking the money to benefit hisdealerships by misrepresenting vehicles that were bought throughthe lines of credit. Authorities said Payne carried vehicles on hisbusinesses' floor plans as part of his inventory even though thevehicles 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, BoulevardBank, Dealer Services Corp., Ford Motor Credit Co. and ManheimAutomotive Financial Services, according to the indictment. TheCallaway Bank may have taken the biggest loss at $1.2 million on 78vehicles.

Payne now faces up to 30 years in prison without parole and afine of up to $1 million. A sentence hearing has not yet beenscheduled.