Date: 11-12-2024

Case Style:

United States of America v. Mitchell C. Simpson

Case Number:

Judge: Steve C. Jones

Court: The United States District Court for the Northern District of Georgia

Plaintiff's Attorney: The States United Attorney’s Office for Atlanta

Defendant's Attorney:

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Description:

Atlanta, Georgia criminal defense lawyer represented the Defendant charged with wire fraud
Former Used-Car Dealer Sentenced to Federal Prison for $3 Million Fraud Scheme

Mitchell C. Simpson, who stole $3 million from companies that provided floor-plan financing to his used-car dealership, has been sentenced to federal prison for wire fraud.

“Simpson abused his position of trust and hurt the companies that enabled him to operate his business,” said U.S. Attorney Ryan K. Buchanan. “Our office, along with our law enforcement partners, is dedicated to investigating and prosecuting individuals who take advantage of others under false pretenses.”

“Simpson lied to the very people who were the lifeline to his small business,” said FBI Atlanta Senior Supervisory Resident Agent Mitchell Jackson. “We value our partnerships with local and state law enforcement to ensure these offenders are held accountable and the victims get justice.”

According to U.S. Attorney Buchanan, the charges and other information presented in court: From early 2012 through early 2019, Simpson operated Mitch Simpson Motors, a used car dealership in Cleveland, Georgia. Three floor-plan lenders, Dealer Financial Holdings LLC, Americash Advance, Inc., and Floorplan Xpress, LLC-OK, each provided Simpson with a revolving line of credit. Commonly known as floor-plan financing, this credit line allowed Simpson to purchase an inventory of vehicles to re-sell to customers. Each line of credit was governed by a written contract, also known as a floor-plan financing agreement. Simpson was required to abide by the terms and conditions of the agreements, and he was required to provide the floor-plan lenders with complete and truthful information concerning all matters related to the agreements.

When Simpson wanted to borrow money to purchase a vehicle to add to his dealership’s inventory, he would contact one of the floor-plan lenders and provide that lender with a description of the vehicle, including the vehicle identification number, and the amount of the loan requested. If the vehicle was subject to any other liens or security interests, Simpson was required to disclose that fact to the floor-plan lender. If Simpson led the lender to believe that the vehicle was not subject to any other liens or security interests, the lender would transfer the requested funds to Simpson’s custody and control. In return for the loan, the dealership would grant the floor-plan lender a purchase-money security interest in the vehicle. Simpson was also required to keep the vehicle free from all other liens and security interests until sold.

Simpson defrauded the floor-plan lenders by using a single vehicle as collateral for more than one floor-plan loan, which is a deceptive and illegal practice referred to in the used-car industry as double floor-planning and triple floor-planning – a practice expressly prohibited by the floor-plan financing agreements.

To hide the double and triple floor-planning, Simpson made false and misleading statements and omitted material facts in his communications with the floor-plan lenders. In addition, whenever Simpson sold a vehicle in which one of the floor-plan lenders held a security interest, Simpson was required to hold the proceeds from the sale of that vehicle in trust for the secured lender and promptly pay the secured lender all amounts due under the applicable floor-plan financing agreement.

But Simpson did not always pay the floor-plan lenders, as required. Instead, he engaged in a shell game with vehicle titles and did not always provide truthful information to lenders concerning the location of vehicles and concerning whether vehicles had been sold. This is an illegal practice referred to in the used-car industry as operating “out of trust,” which was expressly prohibited by the floor-plan financing agreements. Simpson’s fraudulent scheme resulted in a loss of more than $3 million to the floor-plan lenders.

Mitchell C. Simpson, 56, of Cornelia, Georgia, was sentenced by U.S. District Judge Steve C. Jones to three years, five months in prison to be followed by three years of supervised release. He was also ordered to pay restitution in the amount of $105,803.70. Simpson was convicted of wire fraud on July 2, 2024, after he pleaded guilty.

This case was investigated by the Federal Bureau of Investigation.

Assistant U.S. Attorney John Russell Phillips and former Assistant U.S. Attorney David A. O’Neal prosecuted the case.

For further information, please contact USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia

Outcome:

Defendant was found guilty and sentenced to federal prison

Plaintiff's Experts:

Defendant's Experts:

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