A federal jury convicted two men last week for running a luxury car loan fraud scheme that led to more than $850,000 in losses at three Illinois credit unions and one in Virginia, Chicago federal prosecutors said.

Precious W. House, 47, of Chicago, was convicted by a federal jury Thursday on five counts of bank fraud. Brian K. Hughes, 41, of Homewood, Ill. was also convicted on four counts of bank fraud and one count of making false statements on a loan application.

From February to November 2013, House and Hughes recruited individuals seeking loans and agreed to find loans for them in exchange for a fee of 20% to 30% of the loan. They obtained at least 36 automobile loans of the 51 total sought on behalf of the applicants, and fraudulently obtained approximately $1.12 million of the total $1.6 million for which they applied, according to court documents.

Federal prosecutors said House and Hughes stole $853,000 in fake car loans from the $639 million Great Lakes Credit Union in Bannockburn, Ill., the $17 billion Pentagon Federal Credit Union in Alexandria, Va., the $20 million Sherwin-Williams Employees Credit Union in South Holland, Ill., and the $746 million Credit Union 1 in Rantoul, Ill.

House and Hughes coerced loan applicants to make false representations in documents such as loan applications, vehicle purchase orders and employment verifications. The false statements concerned the applicants' income, employment, credit history, intent to use the loan proceeds to purchase automobiles and the existence of contracts obligating the borrowers to purchase vehicles from House.

Federal prosecutors said the purchase orders falsely represented that the loan applicants had contracts to purchase various luxury vehicles made by BMW, Chevrolet, Jaguar, Lexus, Mercedes-Benz, Nissan and Porsche from House's dealership.

If the applicants refused to cash checks obtained in the fraud scheme, Hughes threatened them with civil lawsuits and criminal prosecutions. House then deposited the loan funds into bank accounts he controlled in Illinois, California and Georgia.

Two other defendants who were involved in the loan scheme pleaded guilty earlier.

Keith B. Foster, 46, of Harvey, Ill. pleaded guilty in October 2014 to one count of making false statements on a loan application. He was sentenced to 12 months in prison. Crystal Williams, 31, of Decatur, Ga., pleaded guilty in September 2014 to one count of bank fraud. She will be sentenced later, according to federal prosecutors.

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Two Convictions in Luxury Car Loan Fraud Scheme

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