CHARLOTTE -- Louis F. Harrelson, one of Charlotte’s best known auto dealers, has agreed to plead guilty to aiding in the filing of false auto loan applications with financial institutions.
The 79-year-old Harrelson won’t likely spend any time behind bars. The plea deal with federal prosecutors calls for him to be placed on probation for two years. He’ll also have to pay a $50,000 fine and $1.19 million in restitution.
Harrelson also will have to resign from all management positions within the auto sales industry and not appear at any of the dealerships owned by him or his family during the term of his sentence, according to the plea agreement.
The charge and plea agreement were filed under seal in November. They were unsealed Monday.
Efforts to reach Harrelson for comment today were unsuccessful.
Last month, a federal grand jury indicted 10 people – most former employees of Harrelson auto dealerships – for conspiracy to commit mail, wire and bank fraud between January 1999 and July 2005.
The defendants were accused in the indictment of lying about some Harrelson customers’ ability to pay for vehicles by falsifying down payments, inflating buyers’ incomes and providing fake employment histories on loan applications – all to avoid losing a sale.
Federal prosecutors say the fraudulent loans ultimately cost lending institutions more than $1.2 million. Most of those indicted worked in the finance departments of Harrelson’s dealerships, which have about 400 employees. If convicted, each defendant faces up to five years in prison and a $250.000 fine.
Louis F. Harrelson was named as “an unindicted co-conspirator” in the indictment.
“The philosophy of the Harrelson dealerships,” the indictment alleges, “was never let a customer leave the store without purchasing a vehicle.”
The indictment came three-and-a-half years after the FBI seized files from dealerships owned by Harrelson.
An informant said Harrelson was told by managers about fraudulent documents, according to an FBI search warrant affidavit filed in 2005. In interviews with the Observer that summer, Harrelson said he didn’t know of any wrongdoing by employees before the FBI raid.
Last month, following the indictment, Harrelson again told an Observer reporter that he didn’t know about any wrongdoing with auto loans until the federal investigation began.
“I don’t know anything,” Harrelson said. “I don’t know any more than you do.”
-- The Charlotte Observer