The owner of several used-car dealerships in the Kansas City, Mo., metropolitan area pleaded guilty in federal court for his role in a bank fraud conspiracy that resulted in losses of millions of dollars by several financial institutions.
John A. Hart III, 51, of Kansas City, pleaded guilty before U.S. District Judge Ortrie D. Smith to the charge contained in information that was filed in lieu of the Sept. 21, 2011, federal indictment.
Between May 2000 and February 2009, Hart operated several used car dealerships at various locations, including Better Than New Automobiles, LLC, On Time Auto and Hart Family Motors.
Hart and others obtained loans and lines of credit from various financial institutions in connection with vehicles involved in his auto sales business. Hart admitted that he provided false and fraudulent financial information to obtain loans and lines of credit. Hart also admitted that he obtained multiple loans in which the same vehicle was pledged as collateral, and failed to disclose to the financial institutions that vehicles pledged as collateral for loans were already encumbered at another financial institution or in another loan.
Hart also admitted that he and his wife borrowed more than $1 million from First Missouri National Bank between Nov. 15, 2006 and March 26, 2008. They provided copies of their 2004 and 2005 income tax returns to the bank. However, according to the plea agreement, they did not actually file their 2004 and 2005 returns until 2009.
The filed returns were materially different than the tax returns submitted to the bank in support of their loan application. According to the plea agreement, the filed returns claimed a much lower adjusted gross income.
The government believes the loss attributed to Hart is between $2.5 million and $7 million. Under the terms of the plea agreement, Hart reserves his right to argue what the appropriate loss calculation should be at the sentencing hearing.
Under federal statutes, Hart is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution.
A sentencing hearing will be scheduled after the completion of a pre-sentence investigation by the U. S. Probation Office.
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