MANHATTAN (CN) – Federal prosecutors say the former president of Chattanooga-based Prebul Auto Group swindled an investor – his relative – of $6.8 million. Joseph Prebul faces 12 counts of mail fraud and wire fraud.
Prebul, 48, allegedly promised his relative “above average interest rates” for investing millions in Chrysler Cash Management Program that he promised earned “above average interest rates,” the prosecutors say. But Prebul knew the program earned no interest whatsoever and used the money to finance his business, withdrawing about $1 million a year from the account “as part of his salary and other compensation,” prosecutors say.
Prebul allegedly sent false statements and spreadsheets showing “principal and interest in the amount of at least $12 million,” by June 2008, prosecutors say. “However, on multiple occasions in July and August 2008 when the investor demanded his money back, Prebul refused.”
The account contained “only approximately $700,000” because Prebul had spent money on business and personal expenses, private chartered planes, vacations, golf lessons and five-star hotel accommodation, according to the indictment.