This article was originally published on GoErie.com on September 20, 2016 by Ed Palattella
ERIE, Pa. — The U.S. attorney’s office said an Erie automobile fraud scheme was built around “straw purchases,” illegally inflated vehicle prices and a three-person conspiracy. Text messages and information from insiders helped investigators unravel the plot.
Newly unsealed search warrants show that as many as five cooperating witnesses — identified only as CW1 through CW5 in court papers — provided the FBI, state police and Erie police with details about suspected phony car deals between May 2015 and March 2016 at Rick Weaver Buick GMC Inc., 714 W. 12th St., whose owner is Adam J. Weaver.
One of the cooperating witnesses was working at Rick Weaver Buick GMC when that person went to Erie police in December to report “possible criminal activity” with vehicle sales at the dealership, according to the warrants. The warrants state that the deals involved Adam B. Coover, whom the warrants describe as a local car dealer and a friend of Adam Weaver.
The warrants also show that the four other cooperating witnesses did business with Coover, and the first of them started cooperating with investigators in May 2015. Coover is accused of conspiring with Adam Weaver, the Weaver dealership and the dealership’s general manager, Douglas A. Grooms, to use straw buyers to purchase cars from the dealership at inflated prices, illegally increasing the size of the bank loans the dealership received for the sales.
Cooper and Weaver used text messages to complete one of the deals, on Jan. 23, using a straw buyer identified as CW3, according to one of the warrants Adam Weaver in one text told Coover that banks had approved the auto loans for CW3.
In a conversation with an FBI agent on March 16, according to the warrant, Weaver said “he is actively involved in his business and stated straw purchases of vehicles are illegal.”
The U.S. attorney’s office is alleging the straw buyers, who were not charged, purchased vehicles in their names, at the request of Coover, with no intention of keeping the vehicles. Straw purchases are meant to keep secret the identity of the true purchaser, who might not have the credit to buy a car on his or her own.
Adam Weaver, Coover and Grooms were indicted a week ago in U.S. District Court in Erie on the felonies of wire fraud and conspiracy to commit wire fraud. Also indicted, as a corporation, was Rick Weaver Buick GMC, of which Adam Weaver owns 85 percent, according to one of the warrants.
The U.S. attorney’s office is alleging the scheme in the Weaver case involved about $650,000 in auto loans connected to the fraudulent sales of at least 11 vehicles.
In a related case, a grand jury a week ago also indicted Coover and another local auto salesman, Brian A. Vergotz, of engaging in a similar fraud scheme separate from the Weaver dealership between May 2015 and March 2016. Cooper and Vergotz in that case are accused of wire fraud and conspiracy to commit wire fraud.
The U.S. attorney’s office is alleging that scheme involved about $540,000 in auto loans connected to the fraudulent sales of at least 10 vehicles.
Banks and other financial institutions were the victims in both cases, the U.S. attorney’s office said.
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