This article was originally published on GoErie.com by Madeleine O’Neill on April 16, 2018
An Erie auto salesman received prison time and must pay tens of thousands of dollars in restitution following his sentencing in federal court Monday for conspiring to arrange fraudulent vehicle sales.
Brian A. Vergotz, 50, will spend six months in federal prison followed by six months on home monitoring, U.S. District Judge David S. Cercone ruled. He must also pay $109,635 in restitution, to be split with his co-defendant.
The prison sentence went below the federal guideline range of 12 months to 18 months in prison.
Vergotz’s lawyer, Stephen Sebald, pointed to Vergotz’s lack of a criminal record and asked for a sentence that could be completed entirely on home monitoring.
“I was disappointed,” Sebald said after the sentencing. “But I do think it’s a fair sentence.”
Vergotz apologized in court.
“I’ve never been in this kind of situation and I assure you I never will be again,” he said.
Assistant U.S. Attorney Christian Trabold asked Cercone to issue a sentence that would deter “brazenly fraudulent conduct” in the Erie’s automotive trade.
Vergotz pleaded guilty in November to a felony count of conspiracy to commit wire fraud. As part of his plea agreement, the U.S. Attorney’s Office in Erie agreed to drop 10 counts of wire fraud, although Vergotz accepted responsibility for the facts of those counts.
Vergotz pleaded guilty after his co-defendant in the case, Adam B. Coover, entered a plea in October. Coover has also pleaded guilty in a similar scheme that involved the Rick Weaver Buick GMC dealership in Erie. Vergotz was not accused in the Weaver case.
Trabold said at Vergotz’s plea hearing that Vergotz agreed to a scheme in which Coover persuaded two “straw buyers” to purchase vehicles from Vergotz. The straw buyers bought vehicles in their names but did not take possession of the vehicles, Trabold said.
Instead, he said, the vehicle would be taken to a car lot owned by Coover. Coover previously owned the now-defunct Infinity Automotive LLC, in the 2400 block of State Street in Erie.
The banks that provided the loans for the straw buyers’ vehicles were not informed that the buyers would not take possession of the vehicles, Trabold said. The buyers’ loan applications were also altered to improve their financial information.
According to the indictment, the vehicle purchases totaled $593,671.
Vergotz’s indictment, filed in September 2016, did not indicate where he was working as a salesman when the auto sales took place. It states that Vergotz’s employer did not know about the conspiracy between Vergotz and Coover.
Vergotz was fired as a salesman at the North East-based Lakeside Chevrolet Buick after he was indicted, said Lakeside’s president, Andy Gabler. Gabler said in September 2016 that Vergotz was working for another dealership when the fraud occurred.
“This is obviously repeated conduct over several months,” Trabold said Monday. “He (Vergotz) was the individual with access to the loan system.”
Coover is awaiting sentencing in the case involving Vergotz and in the Weaver case.
Also awaiting sentencing is Adam Weaver, the former owner of the Rick Weaver dealership, who pleaded guilty to a felony count of conspiracy to commit wire fraud in October. The government accused Coover, Weaver, and a third man, Douglas A. Grooms, of engaging in a similar scheme in which vehicles were sold to straw buyers at inflated prices. The loans were never repaid, leaving banks and other lenders unable to recoup the cost of the loans.
Grooms, who was the dealership’s former general manager, received 11 months in prison in that case and in a separate bankruptcy case in March.
The lawyer for the Rick Weaver dealership, Michael Agresti, has said previously the dealership will end its case by entering a pretrial diversion program. The agreement has not been finalized.
Adam Weaver’s father, Rick Weaver, retook control of the dealership after Adam Weaver pleaded guilty. The dealership remains open at 714 W. 12th St. in Erie.
Adam Weaver’s sentencing is scheduled for Monday.