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Monday, May 20, 2024 | Back issues
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Bank Fraud Worked for a Little While

HOUSTON (CN) - A federal jury convicted a North Carolina auto broker of six counts of bank fraud, the U.S. Attorney's Office said.

Grady Davis, of Cornelius, N.C., was convicted after a 3-day trial and 2 hours of jury deliberation, prosecutors said in a statement.

Davis ran a company called Davis Exotics or Davis Auto broker from a back room in his house, prosecutors showed at trial.

"It was through that so called business he met Igor Dukhin, of Houston, and Gentry Wilson, now deceased, who had already been previously involved with other fraud schemes," prosecutors said in the statement. "Mr. Davis turned his business into an ATM for fraudsters," the lead prosecutor said in his opening statement.

Dukhin pleaded guilty and testified against Davis during his trial.

"In 2008, Dukhin filled out and submitted an application for a corporate American Express card," prosecutors said. "However, American Express does not allow cash advances, only the purchase of goods and services. In fact, cash refunds are not even allowed.

"So, according to the evidence, they found someone to run the card for cash in exchange for a cut of the money - that was Davis. According to testimony, Davis suggested using tractor trailers instead of the types of cars in his business due to the possible suspicious appearance.

"In December 2008, Davis applied for and received a merchant account with American Express and on Dec. 22, he swiped the card for the first time in the amount of $99,999. American Express called to authorize the amount, at which time, Dukhin or Wilson approved the charges. Once the money was received, a portion was eventually sent to Dukhin and Wilson, while Davis kept a percentage for himself."

The scheme went on for 3 months, during which time, "no products ever changed hands, only money," prosecutors said.

"In late February 2009, the account was suspended and an investigation soon followed during which time Wilson and Dukhin confirmed they had received the trucks, while Davis contended he sold them prosecutors said in the statement. "Davis continued to tell a similar story throughout the investigation until the federal indictment was returned in September 2010.

"At that time, Davis began to contend he never actually sold the trucks - that each deal was canceled before finalized and he was simply refunding the deposit money minus a restocking fee.

"However, testimony and evidence indicated that people he claimed to have dealt with in obtaining the trucks had never heard of him."

Bank fraud is punishable by up to 30 years in prison and a $1 million fine.

Davis, who is in jail, will be sentenced on June 15.

Dukhin will be sentenced on May 4. He is free on bond.

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