Dealer Admits to Lying About Down Payments

By Staff Writer September 05, 2018

A Pennsylvania Chevrolet dealership agreed to pay a penalty of $1.4 million and more than $737,000 in restitution to various lending institutions to settle a federal lawsuit.

According to the agreement entered into between the U.S. Attorney and David Hallman (on behalf of Hallman Chevrolet and the Hallman Auto Group), Hallman Chevrolet engaged in a bank fraud scheme from 2009 through 2015, with knowledge and acquiescence of David Hallman, and a conspiracy to commit bank fraud, for which Hallman accepted responsibility.

Hallman Chevrolet engaged in a fraudulent down payment scheme by manipulating bills of sale and bank lending contracts to hide from financial institutions the true source of customer down payments.

During the scheme, Hallman Chevrolet customers were coached by Hallman Chevrolet employees to provide jewelry (most of which was low value costume jewelry) to Hallman Chevrolet in return for Hallman Chevrolet making it appear down payments had been provided by customers. As a result, Hallman Chevrolet led the financial institutions into making unsafe investment decisions by having under-collateralized assets and financially risky credit applicants. Financial institutions were led to believe customers used their own money for the down payments making it appear they were more credit worthy, when in effect, the financial institutions themselves had unknowingly supplied their own loan funds to cover the fictitious down payment.

The parties entered into an agreement to hold Hallman Chevrolet accountable for its actions and to compensate lending institutions. The agreement requires the monitoring of Hallman Chevrolet’s conduct over the next four years and imposes other substantial obligations on the auto dealership and its owner.

Last modified on Wednesday, 05 September 2018 13:34

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