Ten Indicted on Midwest Vehicle Fraud Scheme
Ten people have been charged in a Midwestern vehicle financing fraud scheme, according to federal prosecutors.
A former suburban Chicago motorcycle and RV dealer and his accountant were indicted Wednesday (Aug. 28) on charges that they bilked about 20 lenders out of more than $56 million, the Chicago Daily Herald reported.
Prosecutors said Russell S. Ott, 50, of Oswego, who once had ownership interests in motorcycle and RV dealerships in Libertyville, fraudulently obtained more than $31.3 million in loans from Fifth Third Bank. Ott is charged in the financing scheme along with his Naperville accountant, Brian McMahon, 54.
In addition to the business loans, Ott is accused of enlisting eight other defendants from around the country to obtain fraudulent loans to purchase vehicles that didn’t actually exist, “usually very expensive RVs,” prosecutors said.
Andrew Stacy, 51, of Elburn, and F. Peter Mignin, 63, of Geneva, are among those charged in this aspect of the alleged crime, according to the indictment.
A federal grand jury indicted all 10 on various bank fraud and tax evasion charges Wednesday. Each person is facing a maximum sentence of 30 years in prison if convicted of bank fraud and could be fined as much as $1 million, authorities said.
The Joliet Herald-News reported that Ott and McMahon cost about 20 banks and lending institutions more than $56 million in the scheme, based at Pro Source Motorsports in Morris, according to a statement from the U.S. Attorney’s Office.
Ott was the owner of Emily Inc., which did business as Pro Source, selling motorcycles, luxury motor homes, RVs, ATVs, boats and jet skis from 1995-2008. In 2007 and 2008, he also was partial owner of Liberty Cycle and Huntley Chevrolet, both in Libertyville.
Ott was charged with one count each of bank fraud and tax evasion, while McMahon was charged with one count of bank fraud and two counts of filing false tax returns, according to federal prosecutors.
McMahon was Ott’s and Emily’s CPA, and also owned Triumph Suzuki in Naperville from 2001-04 before selling it to Ott.
A 36-count indictment returned by a federal grand jury alleges the dealership fraudulently obtained more than $31.3 million in financing from Fifth Third Bank, which lost more than $27.1 million in the plot.