MANHATTAN (CN) - Joseph Prebul, the Chattanooga-based president of Prebul Auto Group, defrauded "investors" of $7.6 million and spent more than $2 million of it to live high on the hog, while two of his 11 auto dealerships closed and the auto group lost $1.6 million, federal prosecutors say. Prebul also was a director of CapitalMark Bank and Trust, of Chattanooga and Knoxville.
Prebul promised that his victims would earn 6% interest per month, but actually shuffled the money among his Chrysler accounts, paid himself $1 million a year in salary, paid off $2 million in credit card bills for his own and his wife's accounts, and spent money on private jets, golf lessons and tournaments, and vacations at 5-star hotels, according to the complaint.
During this time, Prebul Auto Group lost $1.6 million, according to the complaint. Prebul closed his dealership in Dayton, Tenn., in December 2008 and closed his Ringgold, Ga., dealership in January this year, prosecutors say. The complaint states that he still owes "Victim 1" $7,641,000. He collected more than $15 million in the wire fraud scheme, much of it, apparently, from "individuals working for Victim 1," according to the complaint.