The World's greatest car financing Scam

"Trevor Slattery, ACTOR" (anacostiabikecompany) 01/28/2015 at 16:48 • Filed to: None

3

12

!!!error: Indecipherable SUB-paragraph formatting!!! post on the U.S. Auto Dealer reminded me of a story from back in the 90's that I read in Autoweek.

Beh0ld! The Scam to end all Scams...

!!! UNKNOWN CONTENT TYPE !!!

ranwhenparked > Trevor Slattery, ACTOR 01/28/2015 at 16:59

0

That is insane how big that got. I mean, one little Buick dealer doing billions of dollars in business overseas, and it took them several years to suspect anything? If all that was real that would have made McNamara/Kay larger than many actual automakers at the time.

Also, I think this case was used as the inspiration for Jerry Lundegaard's scheme in Fargo , though there may have been more than one dealer scamming GMAC back then.

Trevor Slattery, ACTOR > ranwhenparked 01/28/2015 at 17:04

0

I remember when it happened being slack jawed. People on the GM finance side were quietly retired or reassigned with their pensions hung over their heads to keep them silent about exactly how they let this happen.

It is like that old bank motto, "you owe the bank $10,000 you have a problem. You owe the bank $10,000,000 the BANK has a problem."

It was INSANE.

davedave1111 > Trevor Slattery, ACTOR 01/28/2015 at 17:13

1

I hadn't heard of that one before, but it's great. It's a bit similar to the recent Kallakis case in the mind-boggling simplicity of it all, and the astonishing credulity of the lenders. (I don't suppose it's a coincidence that both cases happened during credit booms/bubbles.)

http://www.bbc.co.uk/news/business-…

What really brings home the sheer scale of it, though, is what small beer the Kallakis money seems in comparison - even with 20 years of inflation on its side.

Trevor Slattery, ACTOR > davedave1111 01/28/2015 at 17:39

0

Google "GMAC scam McNamara" for more details on this scam. The trial quotes are amazing!

davedave1111 > Trevor Slattery, ACTOR 01/28/2015 at 17:44

0

I'd already googled it, but I hadn't seen that. I'll go do that now :)

DrJohannVegas > Trevor Slattery, ACTOR 01/28/2015 at 18:08

1

He also pretty much got away with it:

http://www.nytimes.com/1995/01/20/nyr…

CaptDale - is secretly British > Trevor Slattery, ACTOR 01/28/2015 at 20:36

1

Holy Crap!

Stapleface-Now Hyphenated! > Trevor Slattery, ACTOR 02/04/2015 at 14:01

0

Damn, I want more of the story than what the paper had. Where did the money go? How was he able to keep repaying GMAC for the bogus loans? And, more importantly, I wonder how long he could have kept this up had GMAC not figured it out.

Trevor Slattery, ACTOR > Stapleface-Now Hyphenated! 02/04/2015 at 14:21

0

On the repayment aspect, he just kept giving him their own money back, he was getting loans faster than he had to pay them. It was working so well they upgraded his credit and gave him longer to pay. The whole thing was artwork. A masterpiece. But really GMAc had only themselves to blame for not insisting on VIN#s for the vans when he was asking for financing.

The whole lending money to dealers for stock is a hell of an angle. Unless you get taken for a ride.

Stapleface-Now Hyphenated! > Trevor Slattery, ACTOR 02/04/2015 at 14:35

1

That is pure genius right there, especially when you can get the financing company to pay themselves for your own Ponzi scheme.

Trevor Slattery, ACTOR > Stapleface-Now Hyphenated! 02/06/2015 at 16:37

0

And think about how good it made GM and GMACs books look.

GM is ostensibly selling a ton of GM conversion vans and GMAC is moving a ton of financing product and the debt is being serviced in a timely fashion.

Trevor Slattery, ACTOR > DrJohannVegas 02/06/2015 at 16:42

0

http://www.cylinder-heads.com/

And apparently still in business.