LawFuel.com – Legal Newswire –
LEV L. DASSIN, the Acting United States Attorney for
the Southern District of New York, announced that JOSEPH PREBUL,
48, of Signal Mountain, Tennessee — the former President of
Chattanooga-based Prebul Auto Group and a former member of the
Board of Directors of CapitalMark Bank and Trust — was indicted
today on wire and mail fraud charges. PREBUL was arrested on a
criminal Complaint on February 10, 2009. As alleged in the
twelve-count Indictment filed today in Manhattan federal court:
PREBUL owned and operated a number of car dealerships
in Georgia and Tennessee. Commencing in approximately 2004,
PREBUL represented to a New York City investor, a relative of
his, that an investment in a cash management program account held
by PREBUL’s car dealerships would earn above-average interest
rates, and that invested money would be liquid and accessible.
As a result, the investor sent PREBUL millions of dollars over
time to be invested. In return, PREBUL occasionally caused
statements or spreadsheets to be sent to the investor which
falsely showed the investment earning money at a specified rate.
In June 2008, the fictitious account statement sent to the
investor showed principal and interest in the amount of at least
$12 million. However, on multiple occasions in July and August
2008 when the investor demanded his money back, PREBUL refused.
During that same period, contrary to the fictitious June 2008
account statement, the account contained far less, and by July
31, 2008, only approximately $700,000 was left in the account.
Most of the investor’s funds had instead been spent to finance
PREBUL’s businesses and personal and family expenses, including
private chartered planes, vacations, and five-star hotel
PREBUL is expected to be arraigned on the Indictment
before United States District Judge WILLIAM H. PAULEY III on May
15, 2009 at 2:00 p.m. in Manhattan federal court.
PREBUL is charged with eleven counts of wire fraud and
one count of mail fraud, each of which carries a maximum sentence
of twenty years in prison and a maximum fine of the greater of
$250,000, or twice the gross gain or loss from the offense.
Mr. DASSIN praised the work of the Criminal Investigators
of the United States Attorney’s Office.
Assistant United States Attorneys REED M. BRODSKY and
JENNIFER E. BURNS are in charge of the prosecution.
The charges and allegations contained in the Indictment
are merely accusations and the defendant is presumed innocent
unless and until proven guilty.