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Grand Jury Indicts Former Dealership GM

October 17, 2017 0 Comments

The former general manager of a dealership in Madison, Wisconsin, is facing federal embezzlement charges. Allen R. Foster, 53, who previously managed Smart Motors, was sued in 2016 by his former employer over the alleged embezzlement of $3 million. On Wednesday, federal prosecutors formally charged him with fraud and money laundering.

The indictment was issued Wednesday by a federal grand jury, and was unsealed in a U.S. District Court following Foster’s arrest on Sunday.

Foster is charged with 12 counts of wire fraud and eight counts of money laundering in an alleged scheme wherein he created bank accounts for a shell company as a place to deposit the stolen money over the course of 12 years.

Appearing in court on Monday, Foster pleaded not guilty to the charges, each of which carries up to 20 years in prison plus a $500,000 fine. Foster was released from custody by U.S. Magistrate Judge Stephen Crocker, contingent with compliance on a laundry list of conditions. Foster’s next court appearance is set for November 17.

Foster resigned from Smart Motors in June of last year.

According to the indictment, Foster opened a checking account at First Business Bank, under the name Creative Marketing Solutions, in May 2004. Foster was listed on the account as the sole proprietor, agent, and signer signer.

Foster allegedly used a fake company name that was similar to that of a genuine vendor the dealership did business with. A 2016 civil suit filed against Foster by Smart Motors revealed that the dealership used a company called Creative Marketing Specialists for its marketing needs.

Foster told employees to make checks payable to Creative Marketing Solutions, as well as submitting check request forms to the dealership to ensure the checks would be payable to his false account. The request forms listed false reasons, such as advertising, for issuing the checks.

Foster also had dealership employees deliver checks to him directly rather than following Smart Motors’ standard protocol for other vendors, whereby the checks were mailed to the vendors.

The 12 counts of wire fraud cover 12 checks, totaling $122,925, and the eight money laundering charges cover a total of $55,600.

The grand jury indictment indicates that Foster used some of the stolen money toward both his primary home and his vacation him. It further states that Foster used the money to fund “romantic and sexual arrangements” with multiple women he found through, a website the purports to create “mutually beneficial” “sugar daddy” relationships.

The indictment seeks forfeitures of $805,165, plus the interest from Foster’s properties, as well as criminal convictions.

As for the 2016 civil suit, Smart Motors sued Foster, alleging he stole spiffs totaling more than $750,000. The lawsuit alleged the creation of a separate spiff category, undocumented and requiring only Foster’s approval.

The suit further alleged that Foster had used a company-issued credit card to purchase $600,000 worth of personal goods and services (e.g., event and airline tickets, as well as personal travel expenses).

Foster denied the allegations presented in the civil case. In July, his lawyers asked Circuit Judge Richard Niess to put the case on hold, as a grand jury was to “consider criminal charges in the matter.” Niess last month denied that motion.

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