Credit unions and banks caught up in a fraud scheme. (Source: Shutterstock)
A Pennsylvania grand jury indicted the former president of the National Independent Auto Dealership Association for allegedly running a four-year, multimillion-dollar auto loan fraud scheme that victimized credit unions, banks and General Motors.
Andrew Gabler, 50 of Harborcreek, who served as president for NIADA for more than a year and owned two car dealerships outside of Erie, and his finance manager Chad Bednarski, 48, of Fairview, were indicted last week on 17 felony counts of bank, wire and mail fraud.
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According to the indictment, from January 2015, to January 2019, Gabler and Bednarski falsely said that customers made a down payment and then inflated their income on auto loan applications submitted to financial institutions on behalf of customers.
The scheme allegedly victimized the $317 million Widget Federal Credit Union and the $111 million Tendto Credit Union, both of Erie, the $373 billion Capitol One Bank in McClean, Va., the $7.3 billion S&T Bank in Indiana, Pa., and General Motors.
Federal prosecutors allege that Gabler and Bednarski, who initially bought vehicles with S&T Bank's floor plan financing, did not inform the bank when a vehicle was sold in order to delay and attempt to avoid the dealerships' required payment to the bank for the sold vehicles.
Because of the fraud, S&T Bank suffered losses of nearly $2 million. The losses incurred by the credit unions and Capital One were not specified in the indictment.
The two men are also accused of falsely reporting vehicle sales to General Motors for vehicles that had not been sold in order to obtain expiring incentive rebates.
In addition, Gabler allegedly sold extended car warranties to customers and then failed to remit the paperwork and payment to the extended warranty company.
Gabler and Bednarski are scheduled to be arraigned in U.S. District Court in Erie on Aug. 26.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
