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A Michigan business owner admitted Tuesday in federal court that he orchestrated an auto loan fraud scheme that defrauded nearly $2 million from 15 credit unions and five banks, according to new documents filed in U.S. District Court in Bay City, Mich.
In a plea deal with federal prosecutors, George Paul Janssen Jr. agreed to plead guilty to one felony count of financial institution fraud. A sentencing hearing has not been set.
From June 2016 to November 2023, Janssen and co-conspirators submitted false information to financial institutions to fraudulently obtain multiple vehicle loans that he did not possess or intended to acquire.
The FBI launched its investigation after receiving a call from an executive at the $104 million COPOCO Community Credit Union in Bay City. The executive informed investigators that Janssen’s business, Bay Auto Brokers, deposited checks valued at roughly $1.4 million, which were later returned due to insufficient funds.
COPOCO issued $1,343,285 in valid checks to Janssen that were deposited into the Bay Auto Brokers business account at Independent Bank in Grand Rapids.
An unidentified donor, referred to as Individual 1 in the plea agreement, opened Janssen’s COPOCO account with a $700,000 investment intended as a floor plan to fund inventory. He used the Independent Bank account for daily operations at the business.
In August 2023, state officials audited Bay Auto Brokers following a complaint about a potentially fraudulent loan. Auditors found that Janssen listed the same fictitious vehicles in multiple loan applications.
He admitted to auditors to “floating the loan,” meaning obtaining more than one loan on a vehicle without paying off the first loan. As a result, the state revoked his license to sell vehicle for five years.
During the course of this scheme, Janssen enlisted numerous people to apply for multiple vehicle loans that amounted to more than $1.94 million, according to the plea agreement. He paid, or offered to pay, the loan applicants for each loan they obtained. Janssen used paystubs from the loan applicants for each loan they obtained. Janssen initiated loans on the same respective vehicles repeatedly and rarely obtained the vehicles.
According to an FBI investigation that led to his indictment and guilty plea, Janssen withdrew nearly $65,000 from COPOCO ATMs from October to Nov. 13. Between Nov. 1 and Nov. 10, he also withdrew nearly $8,000 from the $136 million Sunrise Family Credit Union, also based in Bay City. Records from Independent Bank showed he received $44,300 in checks from Bay Auto Brokers between Oct. 30 and Nov. 10.
By Nov. 13, Janssen went missing. When he resurfaced on Dec. 16, he told his family and police he had been kidnapped by cartel members who held him hostage for 33 days.
He also told family and friends he was extorted by a Hispanic gang or cartel members from October 2021 to November 2023 and had given them $2 million. The gang allegedly gave Janssen a phone and sent him text messages with instructions on where to leave the money. He allegedly dropped off around $25,000 in various boxes at each location.
While Janssen was missing, the FBI, as well as state and local police, received notifications that several loans related to Bay Auto Brokers had gone unpaid.
Investigators learned Janssen allegedly asked several of his close friends to apply for multiple car loans.
In one case, a friend believed the loans were for vehicles Janssen claimed to have in his possession. He also told his friend the vehicles were in disrepair and that he needed the funds to fix them up, according to the FBI investigators.
Janssen offered to pay his friend $600 for each loan he took out after the vehicles were sold. The friend agreed and sent his pay stubs to Janssen, who used them to falsify the loan documents.
In addition to COPOCO, the fraud scheme victimized Dort Credit Union, ELGA Credit Union, Family First Credit Union, Frankenmuth Credit Union, Great Lakes Federal Credit Union, JOLT Credit Union, Lake Huron Credit Union, Members First Credit Union, Security Credit Union, Sunrise Family Credit Union, Team One Credit Union, United Bay Community Credit Union, United Financial Credit Union and Wildfire Credit Union. Janssen also allegedly victimized Bay Port State Bank, Huntington Bank, Mayville Bank, Port Austin Bank and Isabella Bank.
Peter Strozniak can be reached at pstrozniak@cutimes.com.
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