Published on September 3rd, 2013 | by Daniel Perlman0
10 charged in scheme that netted more than $56 million from lenders
The owner of a recreational vehicle dealership in Morris and nine other people were indicted on charges they defrauded more than $56 million from lenders in an alleged scheme involving bogus vehicle sales, federal officials said today.
Russell Ott, 50, owner of Pro Source Motorsports, was charged with bank fraud for fraudulently obtaining from a bank more than $30 million from a revolving line of credit and using his position to obtain 200 loans based on fake vehicle paperwork, authorities said.
The scheme employed a number of straw buyers, who, authorities said, used money obtained by Ott through the scheme to fund lavish lifestyles and business investments.
Ott’s accountant, Brian McMahon, 54, of Naperville also was charged. McMahon is accused of working with Ott to create false documents that allowed Ott to obtain the revolving line of credit.
Fifth Third Bank, which extended a $31 million credit line to Ott’s business, lost $27 million, according to the indictment.
Otto, of Oswego, also is accused of enlisting eight buyers who made straw purchases of RVs. Ott’s company would put through loan paperwork for fictitious vehicle sales, and lenders would pay off his corporation for the value of the vehicle, authorities said.
He then distributed that money to his straw buyers, who made some repayment to the lenders, but the straw buyers converted most of the money for personal use, according to federal officials. Among others charged are Ott’s former sister in law, who had worked for his company, and another woman who acted as his day-to-day bookkeeper.
Several of the straw buyers used the proceeds to fund professional motorcycle racing teams and to operate cycle dealerships, officials said.
Authorities say Ott used money from the schemes to buy and improve a house in Elburn worth more than $1 million, a $250,000 Wisconsin vacation home, a $350,000 rental property in South Elgin and an airplane and hangar worth $200,000.
It’s also alleged that he used more than $4 million to make investments in a car dealership and a motorcycle dealership in Libertyville, according to federal prosecutors.
Source: chicagotribune.com “10 charged in scheme that netted more than $56 million from lenders,” September 3, 2013.