The New York Times reports that car dealers have taken a page from Wall Street:
Lenders in the housing boom created so-called liar loans, which enabled borrowers, even those with no income or assets, to inflate their income. Government authorities are now taking aim at a new generation of liar loans. Only this time it is subprime auto loans.
People are going to jail. Here's why:
Federal and state authorities, a group that includes prosecutors in New York, Alabama and Texas, are zeroing in on the most powerful, and arguably the least regulated, rung of the subprime auto loan chain, used-car dealerships, according to people briefed on the investigations. Already, they have found hundreds of fraudulent loans that together total millions of dollars.
Yes, that's “millions” with an “m”. Unless they can convert that “m” to a “b”, or better yet to a “tr”, they're cruising for a bruising. They may have learned a bit from Wall Street, but not enough. If you don't steal enough, you could easily wind up in jail. In fact, in this country, it's fair to say that the amount of time you're likely to serve for theft is roughly inversely proportional to the amount that you steal. Do the math: Steal an infinite, or near infinite amount and you do zero time.
Oh, I should give them credit for another lesson learned. The higher ups in these dealerships are shocked!, simply shocked! when they discover what their salesmen are doing with these loans. Much like Jamie Dimon, they never suspected the folks they are paid so handsomely to manage (but again, and this might land them in jail, not as much as Jamie) were doing exactly what they expected them to do.
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