Former auction GM, dealers charged with multimillion-dollar fraud of Dealers Auto Auction Group
A federal grand jury in Tennessee has indicted a former general manager of Dealers Auto Auction Group’s Murfreesboro location and two others with wire fraud and money laundering in a scheme to defraud the auto auction.
The office of U.S. Attorney Henry Leventis for the Middle District of Tennessee announced the charges Monday.
Stephanie Baker, who was GM of DAA Murfreesboro, and her husband Brian Baker — both of Mount Juliet, Tenn. — and Jerry Hutchins, of Dowelltown, Tenn., were charged with wire fraud conspiracy and money laundering conspiracy, along with “substantive offenses for acts of money laundering,” the U.S. Attorney’s office said.
The indictment indicates that Brian Baker and Jerry Hutchins were respective owners of used-car dealerships and conducted business at DAA Murfreesboro.
The three defendants are alleged to have defrauded Dealers Auto Auction Group of more than $2 million in a scheme that officials said happened between February 2017 and November 2018.
All three defendants surrendered to federal agents and appeared before a U.S. Magistrate Judge last Friday.
“The defendants devised a scheme to defraud Dealers Auto Auction Group, LLC by creating fake transactions to make it appear that the defendants’ businesses had sold cars at the auction and were entitled to receive funds from Dealers Auto Auction Group, when in fact the defendants had not sold vehicles at the auction,” the U.S. Attorney’s office said in a release.
“Based on the fake transactions, Stephanie Baker caused Dealers Auto Auction Group to issue checks to Brian Baker’s and Hutchins’ businesses,” it continued. “Then, monthly, the defendants would create additional fake transactions using the same vehicles in order to conceal the original fraud and avoid detection. Brian Baker and Hutchins then converted proceeds of the fraud scheme for their own personal use and benefit.”
The wire fraud conspiracy, money laundering conspiracy and concealment money laundering offense carry prison sentences of up to 20 years. The defendants also face up to 10 years for money laundering, if convicted.
Part of the indictment includes a forfeiture allegation whereby the government seeks to forfeit any property gained from the alleged crimes. That would include money judgment of at least $2,041.170 from Stephanie Baker, $1,357,310 from Brian Baker, and $683,830 from Hutchins.
The IRS-Criminal Investigation and the FBI investigated the case, which is being prosecuted by assistant U.S. Attorney Chris Suedekum.
“An indictment is merely an accusation. The defendants are presumed innocent until proven guilty in a court of law,” the U.S. Attorney’s office said.
In an emailed statement to Auto Remarketing, Dealers Auto Auction Group said: “Dealers Auto Auction Group, LLC (“DAA”) trusts its customers and colleagues to compete hard to succeed in the automotive industry. Upon discovering facts indicating DAA standards were not met, people were terminated and barred from its facilities.
“DAA appreciates the efforts of the Federal Bureau of Investigation and U.S. Attorney’s Office for the Middle District of Tennessee to prosecute unfair and dishonest business dealings. Any further DAA information on this matter will be revealed through the judicial process.”
DAAG distributed a separate news release Wednesday announcing Matt Burch as the new GM of DAA Murfreesboro. Burch has been in the auction industry for 25 years, the company said.
David Andrews, the group’s CEO, said in a release: “Matt Burch’s extensive experience and passion for fostering positive relationships within the auction community make him the ideal choice for the role of general manager. We are confident that his leadership will elevate our operations to new heights.”