## Facts

- Andrew Gabler owned two Pennsylvania car dealerships, Lakeside Auto Sales and Lakeside Chevrolet, which sold and serviced new and used vehicles.
- Chad Bednarski served as the finance manager for both dealerships.
- The dealerships used floor-plan financing from S&T Bank to purchase vehicle inventory.
- S&T Bank conducted monthly audits at both dealerships to verify whether floor-planned vehicles had been sold and whether the dealerships timely repaid the bank for sold vehicles.
- From about January 2015 through January 2019, Gabler submitted auto-loan applications to financial institutions on customers’ behalf that falsely stated customers had made down payments when they had not.
- During the same period, after vehicles financed through S&T Bank’s floor plan were sold, Gabler and Bednarski allegedly failed to notify S&T Bank of the sales to delay or avoid the dealerships’ payoff obligations.
- To conceal the delayed or missing payoffs during S&T Bank’s audits, Gabler and Bednarski allegedly provided falsified buyers’ orders listing sales dates later than the vehicles’ actual sale dates.
- The alleged objective of the falsified audit paperwork was to mislead S&T Bank into believing the delayed or missing payments were legitimate.
- The alleged scheme caused approximately $1.88 million in losses to S&T Bank.
- A federal grand jury charged Gabler and Bednarski with conspiracy to commit wire fraud and bank fraud under federal law.

## Issues

1. Whether the indictment sufficiently alleged a conspiracy to commit wire fraud and bank fraud based on (a) false down-payment representations in loan applications and (b) concealment of floor-plan vehicle sales from S&T Bank through falsified audit documents.
2. Whether, at the pretrial stage, the defendants could defeat the indictment by characterizing the alleged conduct as a business or repayment dispute rather than a fraudulent scheme.

## Decision

- The court denied the defendants’ pretrial challenge to the indictment.
- The court held that the indictment’s allegations were sufficient at the pleading stage to charge a conspiracy to commit wire fraud and bank fraud.
- The prosecution was permitted to proceed on the conspiracy charge.

## Legal Principles

- An indictment is generally sufficient if it states the elements of the charged offense, fairly informs the defendants of the charge, and enables them to plead double jeopardy in a later prosecution.
- On a motion to dismiss an indictment, the court accepts the indictment’s factual allegations as true and does not decide contested factual questions or weigh evidence.
- Fraud offenses may be charged based on a scheme using affirmative misstatements or deceptive concealment; allegations that defendants used falsified documents to mislead a bank during audits can support an inference of fraudulent intent at the pleading stage.
- A conspiracy to commit wire fraud or bank fraud may be adequately alleged by pleading an agreement to pursue the unlawful objective and the defendants’ knowing participation in that plan, as shown by coordinated acts such as joint concealment and use of fabricated records.

## Conclusion

The court allowed the case to proceed because the indictment alleged that Gabler and Bednarski carried out a multi-year plan involving false down-payment statements in auto-loan applications and the concealment of floor-plan vehicle sales from S&T Bank, including the use of buyers’ orders with altered sale dates during bank audits, resulting in substantial losses to the bank.


United States v. Gabler, United States District Court for the Western District of Pennsylvania (2019)