Just over a year after a federal grand jury indicted them on 17 counts, Andrew Gabler, 51, of Harborcreek, and Chad Bednarski, 49, of Fairview, both in Erie County, agreed to a deal with prosecutors that reverses their initial “not guilty” pleas.
Gabler was owner and Bednarski finance manager of Lakeside Chevrolet in North East and Lakeside Auto Sales in Harborcreek and Girard, all in Erie County.
U.S. Attorney Scott W. Brady said they falsely indicated that customers made down payments and falsified and inflated the income of customers when submitting auto loan applications to S&T Bank 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.
Other financial institutions mentioned in the indictment included Capital One in McLean, Va.; and Widget and Tendto federal credit unions in Erie.
Also, on behalf of the government, Assistant U.S. Attorney Christian Trabold advised Baxter that Gabler and Bednarski falsely reported vehicle sales to General Motors for vehicles that had not been sold in order to obtain expiring incentive rebates.
As stated in the original indictment, as part of their alleged conspiracy, 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.”
S&T Bank could not be reached for comment Tuesday. However, at the time of the indictment, a spokeswoman for the bank said, “We do not identify our customers and financing details.”
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 Feb. 1, 2019, 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. It was a day after search warrants were served by the FBI and troopers at Gabler’s home and businesses.
Also in January 2019, according to the Erie Times-News, Erie County Common Pleas Judge Daniel Brabender granted the bank’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.
Each man was represented by Erie-based attorneys: Gabler by Elliot Segel and Bednarski by Kenneth Bickel.
Baxter scheduled sentencing for the pair for Jan. 6.
The U.S. Attorney’s office said the law provides in each case for a total sentence of 30 years in prison, a fine of $1 million or both. Under federal sentencing guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, Baxter continued bond for Gabler and Bednarski.