Former used-car dealer pleads guilty in $3 million fraud scheme

Appellate Courts
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Ryan K. Buchanan U.S. Attorney | US Attorney's office Northern District of Georgia

Mitchell Simpson, who orchestrated a $3 million scheme to defraud companies that provided floor-plan financing to his used-car dealership, has pleaded guilty to wire fraud.

“This defendant abused the trust of the companies that loaned him money to operate his car dealership,” said U.S. Attorney Ryan K. Buchanan. “We will continue to prosecute individuals motivated by greed who use illegal practices to deceive unsuspecting businesses.”

“Simpson deceived the lenders who placed their trust in him and now he will be held accountable for his greed,” said Mitchell Jackson, Senior Supervisory Special Agent of FBI Atlanta’s Gainesville Office. “As this conviction demonstrates, the FBI will not tolerate anyone who fraudulently steals or takes money that they did not earn.”

According to U.S. Attorney Buchanan, 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, also known as floor-plan financing, so that Simpson could purchase an inventory of vehicles to resell to customers. Each line of credit was governed by a written contract known as a floor-plan financing agreement.

Simpson was required to abide by the terms and conditions of these agreements and provide complete and truthful information concerning all matters related to them. When borrowing money to purchase a vehicle for his dealership’s inventory, he would contact one of the floor-plan lenders and provide details about the vehicle along with the loan amount requested. If the vehicle had any other liens or security interests, Simpson was required to disclose this fact.

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

To conceal this fraudulent activity, Simpson made false statements and omitted material facts in communications with the lenders. Additionally, when selling a vehicle secured under these agreements, he was required to hold sale proceeds in trust for the lender and promptly pay all amounts due under the applicable agreement but often failed to do so.

Simpson's fraudulent scheme resulted in losses exceeding $3 million for the lenders involved.

Sentencing for Mitchell C. Simpson is scheduled for October 8, 2024, at 11:00 a.m., before U.S. District Judge Steve C. Jones in Gainesville, Georgia.

This case is being investigated by the Federal Bureau of Investigation (FBI). Assistant U.S. Attorneys John Russell Phillips and David A. O’Neal are prosecuting it.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.