A used-car dealership in New Jersey also was charged as a corporation. Prosecutors announced the indictments Thursday, Dec. 1.
The schemes included the use of straw buyers, according to the indictments. In some cases, the straw buyers were people with good credit scores who allegedly were paid to obtain loans for cars that were resold to someone else, according to the New York City Police Department and the district attorney's office for the borough of Queens.
After making a few payments, the defendants would let the loans go bad, leaving the straw buyers on the hook for the balance, according to prosecutors.
"Unfortunately, these individuals wound up with ruined credit, multiple banks suing them for money, and suspended driver's licenses for unpaid parking tickets on vehicles they allegedly 'own,'" Queens District Attorney Richard A. Brown said in a written statement.
To keep the scheme going, the defendants made enough payments to make sure the selling dealerships wouldn't be charged back for the bad loans, authorities said. Auto lenders would demand repayment from a dealership if loans defaulted in the first 90 days, prosecutors said.
A former salesman at Hillside Honda in Jamaica, Adrian Sylvester, 28, of Brooklyn, has been charged with grand larceny, falsifying business records, possession of stolen property and conspiracy, according to court records.
Hillside Honda was not charged, according to court records. Dealership management did not return a call asking for a comment on the case.
Prosecutors said the investigation also discovered a second group of defendants who allegedly obtained auto loans through false pretenses and used the money for other purposes.
That second group of defendants included Silver Arrow Auto Sales, a used-car dealership in Teterboro, N.J., according to court records. According to the indictment, the dealership submitted false paperwork to banks in support of loan applications, then transferred the money to corporations controlled by the defendants.
The owner of Silver Arrow Auto Sales listed in court documents did not respond to an e-mail request for comment. He was not charged in the indictment.