Pennsylvania GM Dealer Indicted for Phony Loan Scheme

Steph Willems
by Steph Willems
pennsylvania gm dealer indicted for phony loan scheme

An Erie, Pennsylvania Buick-GMC dealer, its owner and general manager, and another man were indicted this week for wire fraud over a bogus loan application scheme.

A U.S. District Court handed down the indictment on Tuesday, Automotive News reports, with court documents alleging the three men submitted fake car loan applications through “straw individuals.”

Charged are Adam Weaver, majority owner of Rick Weaver Buick-GMC Inc., general manager Douglas Grooms and Adam Coover, majority owner of Infinity Automotive and Infinity Transport.

The alleged scheme involved using two straw individuals to purchase vehicles from the dealer, which ultimately remained in Coover’s hands at Infinity Automotive. The phony buyers signed purchase and loan paperwork already filled out by Coover, with Weaver and Grooms processing the documents and submitting them to financial institutions and loan providers through the dealer’s computers.

Between May 2016 and March of this year, the three men allegedly netted $649,824.44 in automotive loans through the scheme. A further $320,727 in sales was halted after the straw buyers failed to secure a loan.

A March police raid on both businesses ended the fraud scheme. At the time of his arrest, Doug Grooms had just plead guilty to embezzling $500,000 from a Chevrolet dealer in nearby Meadville, Pennsylvania. Coover has also been indicted in a separate wire fraud scheme.

If convicted, each man could receive a fine of $1 million and up to 30 years in jail.

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6 of 36 comments
  • 05lgt 05lgt on Sep 16, 2016

    Who the heck watches Fargo and thinks; "Now, there's a good idea!"

  • Jmo Jmo on Sep 16, 2016

    What am I missing? The cars are floorplanned by GM so they get the loan from XYZ and pay off the loan from GM. But, they still have the car. What do they do with the car?

    • See 1 previous
    • Mopar4wd Mopar4wd on Sep 17, 2016

      @Scoutdude Looks like the third guy had hid own car lot, so I'm guessing he had the cars not sure what they did with them.

  • Dukeisduke Dukeisduke on Sep 16, 2016

    So how does it work when GM takes a franchise away now? I can remember that when GMAC was in operation, they would take over the dealership and temporarily change the name on the signs to "Patlan" - the way I heard it, Patlan was the last name of some GMAC executive or manager. Then, they would sell the franchise to another buyer, and replace "Patlan" with the name chosen by the new owner. This happened with a couple of dealers here in the DFW area back in the '80s - Late Chevrolet in Richardson, and Parkway Pontiac in Plano. Both dealers had been keeping the sales tax and registration fees and not forwarding them to the county and the state (customers started complaining when they weren't given license plates, and were instead given one cardboard temporary tag after another). GMAC seized the dealerships, and the Patlan name went up, until new buyers could be found.

  • Geozinger Geozinger on Sep 18, 2016

    I'm curious... So this is news because a GM dealer was indicted for shady dealings with money? What if this had been a Hyundai or VW dealer? Would it still make the news feed? OTOH, this story is just weird. I can't figure out what they were doing with the cars, either.