Business transactions in Houston require a great deal of trust between the parties involved. Oftentimes, millions of dollars changes hands in these types of deals. When one of the parties involved in such deals is being dishonest with the other, it could potentially have a hugely negative impact on both sides. The party perpetrating the fraud not only faces possible criminal charges, but they open the door to business litigation between both sides. The company being defrauded could potentially be faced with enormous financial losses.
A number of area financial institutions are currently facing collective losses of over $1.35 million after being the victims of a McKinney classic car dealer’s fraud scheme. The dealer admittedly padded his own personal financial statements with a number of automobiles that he didn’t even own. During the three years that he owned his dealership, he submitted these fraudulent statements to lenders in order to secure financial resources for his company. He now faces having to repay those funds as well as having to serve a three-year federal prison sentence after having pled guilty to bank fraud and money laundering.
Protecting one’s business from being defrauded requires extreme vigilance when it comes to dealing with outside parties. While the signs of fraud often aren’t blatantly obvious, a company should always do its due diligence in researching those with whom they associate. Anyone that suspects that his or her company has been the victim of fraud may wish to seek the advice of an experienced business litigation firm to determine how to best handle the situation.
Source: Houston Chronicle “Texas classic car dealer pleads guilty of bank fraud” Carol Christian, August 15, 2013