Former NIADA President Andrew Gabler indicted on fraud charges

The former president of the National Independent Automobile Dealers Association who owned Lakeside Chevrolet-Buick in Erie County, Pa., and a former finance manager at the dealership are facing fraud charges. A federal grand jury indicted the pair on conspiracy, bank fraud and wire fraud charges, the Department of Justice and the U.S. attorney for the Western District of Pennsylvania said Tuesday.

Andrew Gabler, 50, of Harborcreek, Pa., and Chad Bednarski, 48, of Fairview, Pa., are named in a 17-count indictment that accuses them of reporting bogus sales to General Motors and selling vehicles but failing to repay the vehicle floorplan provider.

In addition, the indictment accuses Gabler of falsely indicating customers made a down payment and inflating their income to banks, as well as taking money from customers for extended warranties and not sending the paperwork and payment to the warranty company.

The activity, the U.S. Attorney's Office says, ran from about January 2015 until January of this year at Lakeside Chevrolet-Buick, a franchised dealership, and Lakeside Auto Sales, which operates as two used-only stores.

Gabler and Bednarski, who served as finance manager for the stores, falsely reported sales to GM "in order to obtain expiring incentive rebates," according to the news release.

The accusations follow FBI search warrant executions in late January at Gabler's dealerships and a nearby home believed to be his residence. Gabler on Jan. 31 abruptly resigned his post as president of the association, which represents more than 20,000 U.S. used-vehicle dealers.

Gabler and Lakeside also are facing lawsuits by S&T Bank of Indiana, Pa., which alleged the dealership group sold vehicles without repaying the bank for floorplan loans, known as selling out of trust, according to the newspaper website GoErie.com. The bank sued Lakeside in December and January for more than $5.2 million, according to the Erie County Court.

A receiver for Gabler's dealerships was appointed in January as part of the court case and liquidated Lakeside Auto's assets, according to GoErie.com. The receiver was able to raise nearly $3 million for the bank, the newspaper said.
The indictment said Gabler and Bednarski also deliberately failed to tell S&T Bank when they sold a vehicle to delay and avoid floorplan repayment.

Gabler could not immediately be reached for comment. S&T Bank declined to comment.

Gabler faces up to 510 years in prison and a fine of $17 million, while Bednarski faces 330 years in prison and an $11 million fine, though actual sentences would depend on the seriousness of the crimes and prior criminal history, according to the U.S. Attorney's Office.

The FBI and Pennsylvania State Police led the investigation.

Jackie Charniga contributed to this report.