Pennsylvania GM Dealer Indicted for Phony Loan Scheme

An Erie, Pennsylvania Buick-GMC dealer, its owner and general manager, and another man were indicted this week for wire fraud over a bogus loan application scheme.

A U.S. District Court handed down the indictment on Tuesday, Automotive News reports, with court documents alleging the three men submitted fake car loan applications through “straw individuals.”

Charged are Adam Weaver, majority owner of Rick Weaver Buick-GMC Inc., general manager Douglas Grooms and Adam Coover, majority owner of Infinity Automotive and Infinity Transport.

The alleged scheme involved using two straw individuals to purchase vehicles from the dealer, which ultimately remained in Coover’s hands at Infinity Automotive. The phony buyers signed purchase and loan paperwork already filled out by Coover, with Weaver and Grooms processing the documents and submitting them to financial institutions and loan providers through the dealer’s computers.

Between May 2016 and March of this year, the three men allegedly netted $649,824.44 in automotive loans through the scheme. A further $320,727 in sales was halted after the straw buyers failed to secure a loan.

A March police raid on both businesses ended the fraud scheme. At the time of his arrest, Doug Grooms had just plead guilty to embezzling $500,000 from a Chevrolet dealer in nearby Meadville, Pennsylvania. Coover has also been indicted in a separate wire fraud scheme.

If convicted, each man could receive a fine of $1 million and up to 30 years in jail.

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