CINCINNATI — Several credit unions have allegedly been victimized by a phony auto loan application ring involving owners and salespeople at six used-car dealerships here. In their indictments, federal prosecutors said phony loan apps overvalued cars that were actually salvaged vehicles.
A 22-count federal indictment unsealed this week accuses seven Cincinnati men — Daniel Seifu, Christopher Deveaux, Caleb Seifu, Timothy McCandless, Johwanda Leary, Ahaduab Begashaw, Jeremy Anderson and North Dakota resident Jolly Ata Pepper — of conspiracy, wire fraud and bank fraud, WCPO reported.
“The defendants obtained vehicles without proper titles or with fraudulent titles in multiple ways,” the indictment reads. “(They) were able to circumvent the inspection process and fraudulently obtain multiple previously salvaged automobile titles when needed by submitting automobiles that were wrecked and had a 'salvaged' car title to Jolly Ata Pepper in North Dakota to be inspected and repaired.”
Pepper then returned new titles for the cars without ever inspecting or repairing them, according to the indictment. The cars were then sold at inflated prices to unsuspecting buyers, WCPO said.
False Work Records
According to the report, the indictment claims that when buyers couldn’t get loans due to lack of credit or employment, the defendants would submit false work records and proof of a phony down payment. Many buyers were unaware these documents had been included with their loan applications.
Daneile Seifu has accused of submitting those loan applications to Kemba Credit Union, General Electric Credit Union, Westlake Financial Services, Wright Patterson Credit Union, JP Morgan Chase and Credit Acceptance Corporation, a private loan company in Michigan, according to the indictment.
“If the lending institution refused to approve any loan applied for by defendant … (he) would use another dealership not associated with his name to secure fictitious loans using the same scheme,” the indictment reads.
Seifu deposited the sales money into Conquer Auto’s account and collected a fee back from the dealership, according to the indictment.
Additional Allegations
It also alleges that buyers often stopped making payments on the cars, causing the loans to default, so many lenders refused to issue checks to the auto dealerships until they received several months of loan payments from buyers in advance.
“Daniel Seifu then began applying payments to a few of these loans to make it appear to the lending institution that the buyer was legitimate and had the ability to pay for the car,” the indictment states. “Defendants … would change the names of the automobile dealerships periodically to prevent the victim lending institutions from knowing the true owners of the car dealerships and to thus keep the scheme going.”
The scheme took place from August 2016 until August 2018, according to the indictment.
All of those who were indicted are free on bond awaiting trial on June 27.