EUGENE, Ore. – A prominent Honda dealer was sentenced to prison yesterday after pleading guilty to passing as much as $20 million in non-sufficient funds between his account at Northwest Community CU and PremierWest Bank in a check kiting scheme that cost the two institutions almost $3 million in losses.
Under a plea deal with federal prosecutors, Dave Gilbert, owner of the now defunct Horizon Honda Mazda, was sentenced to 37 months in prison for conspiring to commit bank fraud.
Gilbert, 64, had asked to be put on probation and sentenced to community service and home confinement. He assured the court that he would pay $1.9 million in restitution.
U.S. District Court Judge Ann Aiken, however, followed a recommendation from federal prosecutors and sent Gilbert to prison for three years and one month, along with paying restitution.
Prosecutors said Gilbert met daily with his bookkeeper to discuss the balances of his checking accounts at the two lenders and artificially inflated the accounts by depositing checks written on the other account, causing the credit union and bank to unwittingly honor checks drawn against accounts with insufficient funds. For several months before December 2008 the account balances in both accounts were actually negative.
Gilbert kited more than 500 checks, totaling more than $19, between Dec. 1 and Dec. 9, 2008.
To conceal the scheme, which relied on carefully timing deposits to keep from being discovered, Gilbert wrote checks in the same amounts as prior legitimate deposits.
Prosecutors said Gilbert's scheme was in effect giving him a series of unauthorized, unsecured and interest-free loans.
The two institutions figured out the scheme in December 2008 and the scheme collapsed, causing both substantial losses.
