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Arraignments are scheduled Monday morning before Erie federal Magistrate Judge Richard A. Lanzillo for Andrew Gabler, 50, of Harborcreek, and Chad Bednarski, 48, of Fairview, both in Erie County, on charges of conspiracy, bank fraud and wire fraud.

On Aug. 13, U.S. Attorney Scott W. Brady announced a 17-count indictment against Gabler and Bednarski, owner and finance manager, respectively, of Lakeside Chevrolet in North East and Lakeside Auto Sales in Harborcreek and Girard, including charges that they didn’t inform S&T Bank of sales utilizing the bank’s floor plan financing.

According to the indictment, Gabler and Bednarski falsely indicated that customers made down payments and falsified and inflated the income of customers when submitting auto loan applications, between January 2015 and January 2019.

“The conspiracy to commit bank and wire fraud resulted in a loss to S&T Bank of approximately $1.88 million relative to their floor plan financing at Lakeside Auto Sales and Lakeside Chevrolet and other losses to various financial institutions,” the indictment stated.

As part of their alleged conspiracy, according to the indictment, Gabler and Bednarski “caused fake buyer’s orders, containing sales dates later than the actual vehicle sales, to be submitted to S&T Bank during monthly audits … so as to falsely explain and justify the dealerships’ late or non-existent payments” to the Indiana bank.

In January, according to the Erie Times-News, Erie County Common Pleas Judge Daniel Brabender granted S&T’s request for a receiver to take over the Lakeside automotive businesses. Court documents quoted by that paper said the Lakeside businesses consented to the appointment of Hillyer Group LLC of Cuyahoga Falls, Ohio, as receiver.

The receiver liquidated Lakeside Auto’s assets to help S&T recoup its losses, according to court papers.

S&T declined comment when its officials were reached late Monday.

“We do not identify our customers and financing details,” an S&T spokeswoman said.

Other financial institutions mentioned in the indictment included Capital One in McLean, Va.; and Widget and Tendto federal credit unions in Erie. In addition, four counts in the indictment refer to electronic rebate requests made to General Motors.

The industry publication Automotive News noted that Gabler was a past president of the National Independent Automobile Dealers Association, which claims more than 20,000 members.

He resigned from that position on Feb. 1, amid an investigation by the Federal Bureau of Investigation and the Pennsylvania State Police that led to the indictment in this case, and litigation reportedly pressed by S&T Bank. It was a day after search warrants were served by the FBI and troopers at Gabler’s home and businesses.

If convicted, Gabler could face up to 510 years in prison and/or up to $17 million in fines, while Bednarski could face up to 330 years in prison and/or up to $11 million in fines, according to a spokeswoman for Brady’s office. Assistant U.S. Attorney Christian A. Trabold is prosecuting this case on behalf of the government.