Former Serra Nissan Sales Manager Pleads Guilty To Fraud Conspiracy
Topics: Serra Nissan, Abdul Islam Mughal
U.S. Attorney's Office, Northern District of Alabama
1 July 2014
FOR IMMEDIATE RELEASE
BIRMINGHAM -- A former sales manager at Serra Nissan in Birmingham pleaded guilty today in federal court to charges related to a scheme at the car dealership to falsify auto loan documents, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein Jr., and IRS-CI Special Agent in Charge Veronica Hyman-Pillot.
ABDUL ISLAM MUGHAL, 48, of Trussville, pleaded guilty before U.S. District Judge Virginia Emerson Hopkins to one count of conspiring with others, including Serra Nissan salesmen, general managers, sales managers and finance managers, to falsify loan documents in order to defraud customers, Nissan North America and financial institutions and sell more cars. Mughal also pleaded guilty to one count of bank fraud for submitting falsified loan documents to financial institutions, including Capital One Auto Finance, between January 2012 and October 2013.
Mughal is scheduled for sentencing Nov. 5.
According to Mughal's plea agreement with the government, while he was the dealership's general sales manager, "there was a pervasive scheme throughout Serra Nissan ... that if a customer did not qualify for a car loan for some reason, the salesman, finance managers, sales managers, or GSM were to falsify information or documents that would ensure the customer was funded."
The plea agreement lists ways that Mughal and others falsified loan documents including, but not limited to:
• Inflating the income information of prospective car buyers, a process participants sometimes referred to as “fluffing.”
• Creating or altering documents to submit to financial institutions that required proof of the prospective buyer's income or residency.
• Listing accessories not actually included on a vehicle so a financial institution would increase its loan amount, a process participants sometimes called “power booking.” Mughal and others had a financial incentive to power book a deal, because if the profit on a transaction were high enough, the dealership would pay the employees on the deal something above their normal commission.
• Presenting straw buyers, who could qualify for a loan, to financial institutions when the actual buyer could not qualify because of poor credit or insufficient income.
In Mughal's plea agreement, he acknowledges one incident in which he told a salesman that a specific sale “could not be funded until they created a ‘legal lie’ for the bank” that showed the buyer, identified as J.T., made $5,000 per month.
J.T. bought a vehicle from Serra Nissan on Oct. 16, 2012. According to the plea agreement, J.T. submitted a bank statement to Serra Nissan showing an ending account balance of $11.03, but the loan application the dealership submitted to Capital One Auto Finance included a fraudulent bank statement showing J.T. had monthly deposits of $6,179.
In a second vehicle purchase on Oct. 16, 2012, a customer identified as W.K. submitted only a Social Security letter as proof of income. Serra Nissan, however, submitted a loan application to Capital One on W.K.'s behalf that also included a fraudulent bank statement, a claim of $2,973 in monthly Veterans Administration benefits -- although W.K. is not a veteran -- and false information that W.K. was retired from the State of Alabama and made $4,500 a month.
The maximum penalty for the conspiracy count is five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years in prison and a $1 million fine.
The FBI and IRS investigated the case, which Assistant U.S. Attorney Amanda Schlager Wick is prosecuting.
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