A Billings auto dealer admitted that he defrauded First Interstate Bank in a scheme in which he failed to repay loans on vehicles he sold.
During an initial appearance before Chief U.S. District Judge Richard Cebull, Daniel Young, 35, who owned and operated Auto Plaza Inc., 1617 First Ave. N., pleaded guilty to bank fraud.
In exchange for Young’s plea, prosecutors agreed not to pursue other charges.
Auto Plaza, which sold used vehicles along with new and used recreational vehicles, boats, ATVs and motorcycles, ran its operations with financial help from First Interstate Bank and Dealer Services Corp., Assistant U.S. Attorney Jessica Fehr said.
When the dealership sold a vehicle, proceeds from the sale were to pay off the bank or corporation that had provided financing to acquire the inventory, Fehr said. The bank or financing company would then pay off any liens and allow a clear title to be passed to the new buyer.
An investigation found that Young and others at his request would fail to repay the bank and financing company for money loaned to the dealership on vehicles that had been sold, Fehr said. Instead, Young used the sales proceeds to pay other bills and vendors, make payroll and pay off liens on unrelated sales.
One of the fraudulent transactions involved the 2008 sale of a 2005 Mastercraft boat that had been financed by the bank, Fehr said. Young lied to a First Interstate banker about paying off a lien on the boat held by an Ohio bank, she said.
Cebull set sentencing for May 8 and continued Young’s release.