In a bizarre incident which took place in the Texas city of Dallas, an executive at a used car dealership admitted to defrauding Ford Motor Credit Co. and some banks for nearly 50 million dollars.
According to local news agency Dallas News, the chief financial officer of Reagor Dykes Auto Group in Dallas pleaded guilty to conspiracy to commit wire fraud against the aforementioned financial services arm of Ford Motor Company, along with some banks. The chief perpetrator here is named as Shane Andrew Smith, the 45-year-old financial officer. He detailed how he and his employees forged documents and committed wire fraud against Ford Motor Credit Company and the banks. The scam ultimately ended up costing the victims about $50 million. All of this must be paid back by Mr Smith, in accordance with the court ruling.
The US attorney dealing with the case, Erin Nealy Cox, said that the scammers used a variety of schemes from ‘dummy flooring’ to check-kiting as a means of committing the fraud, and described it as ‘blatant, large-scale fraud’. In the check-kiting process, employees would cross-reference checks across multiple banks and take advantage of the delay between the time a check is deposited in the recipient’s account and the time at which it is deducted from the payer’s account to inflate the company’s own bank balance. For committing ‘dummy-flooring’, employees would request loans under the guise of repurchasing sold cars and then use the money to cover other expenses. In addition to that, the employees would create fake documents called ‘dummy shucks’ with falsified dates of when a car was sold, gaining the company additional time to repay loans from Ford.
All of this was done under the command of the CFO, Mr. Smith and he now faces a prison sentence of up to 20 years as the investigation continues. This is in addition to the $50 million that has to be paid back according to the plea agreement.