September 27, 2020

Duo in fraud scheme face up to 30 years

A former president of the National Independent Automobile Dealers Association pleaded guilty Sept. 1 in federal court to defrauding General Motors and four banks and credit unions by using fake vehicle sales and fraudulent loan applications to pocket millions of dollars in a four-year scheme.

Andrew Gabler, 51, who owned the now-shuttered Lakeside Chevrolet-Buick in Erie County, Pa., and Lakeside Auto Sales, which operated as two used-vehicle stores, pleaded guilty to one count of fraud conspiracy.

So did his former finance manager Chad Bednarski, 49.

They each face up to 30 years in prison, a fine of $1 million, or both. Under federal guidelines, the sentence imposed should be based upon the seriousness of the offense and any prior criminal history.

Sentencing is scheduled for Jan. 6, and Gabler and Bednarski remain free on bond.

The two were named in a 17-count federal indictment in August 2019.

According to the U.S. Attorney’s Office for the Western District of Pennsylvania, Gabler and Bednarski admitted in federal court to these illegal activities:

  • Gabler falsely indicated that customers made down payments. He also falsified and inflated the income of customers when submitting auto loan applications to financial institutions on behalf of customers.
  • Gabler caused “extended warranties,” or service contracts, to be sold to customers and deliberately failed to remit the paperwork and payments to the extended warranty company.
  • Gabler and Bednarski falsely reported vehicle sales to GM to obtain expiring incentive rebates.
  • The pair deliberately did not inform S&T Bank when Lakeside Auto Sales and Lakeside Chevrolet sold vehicles that the dealerships had purchased utilizing the bank’s floorplan financing. They did this to delay and attempt to avoid the dealerships’ required payment to S&T Bank for the sold vehicles.

Gabler resigned in January 2019 during his one-year term as president of NIADA.

The association represents more than 20,000 U.S. used-vehicle dealers.