Plaza Mariachi, ex-Auto Masters owner fraud indictment: What we know

Mahan “Mark” Janbakhsh, owner of Plaza Mariachi and previous owner of Automobile Masters, was charged and arrested this week
Former Car Masters main economical officer Steven L. Piper was also charged and arrested
The two face various counts in what investigators get in touch with a multi-million-dollar financial institution fraud scheme

Nashville businessman Mahan “Mark” Janbakhsh, operator of Plaza Mariachi and previous proprietor of Vehicle Masters, was charged Thursday in what federal investigators known as a multi-million-greenback bank fraud plan.

Also charged was former Vehicle Masters main money officer Steven L. Piper.

Janbakhsh, 47, of Brentwood, and Piper, 51, of Joelton, were being arrested Thursday early morning by the FBI.

Janbakhsh denied the allegations in a statement despatched to The Tennessean on Thursday.

Plaza Mariachi, ex-Auto Masters owner fraud indictment: What we know

Is Car Masters in problems in this scenario?

No. The latest entrepreneurs of the Automobile Masters chain were being not involved in these rates.

Freeland Car Team purchased the enterprise in 2018 immediately after Janbakhsh filed for bankruptcy. Though they purchased the firm’s identify, logo and inventory, a agent confirmed to The Tennessean on Thursday they did not purchase the previous loan portfolio and have no link with how issues had been previously operate.

“The prior owners’ actions are deeply disappointing and are no reflection on our corporation or its leadership right now,” a assertion from the organization study.

FEDS:Plaza Mariachi, Automobile Masters owner led multi-million-dollar financial institution fraud plan

Does this impact Plaza Mariachi?

No small business operations tied to Plaza Mariachi or Janbakhsh’s other firms are pointed out in the federal indictment.

A spokesperson for Plaza Mariachi mentioned Friday that operations will go on as normal. The exact same is correct for the Hispanic Household Foundation and Activa Nashville, a Spanish-structure radio station, that Janbakhsh aided launch. The two are headquartered at Plaza Mariachi.

Due to the fact a 2019 individual bankruptcy settlement, “Mark has been active in the philanthropic environment, attempting to provide Nashville and far better the life of its citizens,” a consultant of his defense explained to The Tennessean.

What is actually the story?

Janbakhsh and Piper are accused of conspiring to defraud two banking companies, Cash 1 and Very first Tennessee Lender (now recognized as First Horizon).

Investigators declare the pair used a utilised vehicle dealership chain in the Nashville location, Vehicle Masters, to overstate their collateral by more than $37 million and defraud the banking companies out of traces of credit history — $24 million in overall — dependent on the falsified collateral.

Janbakhsh was the bulk operator of 9 employed vehicle dealerships and six connected finance businesses in Center Tennessee that did business as Auto Masters.

Piper, a licensed general public accountant, was the main financial officer of all the Car Masters entities and geared up the tax returns for Vehicle Masters and for Janbakhsh personally, according to details introduced by the U.S. Attorney’s business office.

What are they charged with?

Janbakhsh and Piper are every single charged with five counts of defrauding these economic institutions five counts of creating wrong statements and above-valuing house and securities for the goal of influencing these monetary establishments and 3 counts of producing untrue representations for the duration of official proceedings.

Individually, Janbakhsh faces a demand of witness tampering and Piper faces 3 counts of submitting wrong tax returns.

Janbakhsh and Piper are accused of misusing Vehicle Masters’ sideline of delivering car or truck financial loans financed as a result of traces of credit history from the banks. Investigators say they falsely inflated quantities in monthly studies on the overall worth of suitable loans that created up the collateral for that credit history.

Janbakhsh’s protection mentioned he denies all allegations. A mentioned legal professional for Piper declined comment when achieved by phone.

What was the settlement with Capital Just one?

Automobile Masters, at the time owned by Janbakhsh, entered a loan arrangement with Capital One particular in 2011, Janbakhsh’s authorized crew wrote in a assertion supplied to The Tennessean. The agreement’s backing involved stock collateral as effectively as a own guaranty by Janbakhsh.

6 many years afterwards, Funds A person began to get rid of by itself from sections of the car industry and named in its line of credit history from Car Masters. Though trying to refinance, Janbakhsh “identified that a collateral shortfall experienced developed,” in accordance to his statement.

The discrepancy was reported to Cash 1.

In October 2017, Piper submitted a further report to Cash 1 disclosing that Automobile Masters had overstated its collateral by more than $33 million, court data clearly show. In that report, the company admitted it it experienced drawn $26.4 million a lot more than it was permitted.

A 7 days afterwards, the corporation filed for individual bankruptcy. During individuals hearings, investigators believe that the pair falsely testified they experienced no knowledge of the wrong data.

But Janbakhsh insists everything was over board and the individual bankruptcy proceedings were being settled with a $10.2 million payment in August 2019, in accordance to his assertion.

What else are they accused of?

A release from the U.S. Attorney’s business stated that throughout the individual bankruptcy proceedings, Janbakhsh experimented with to shell out the previous Auto Masters portfolio manager $10,000 and promised him an further sum of about $300,000 to leave the space and not give even more info to federal agents.

Janbakhsh did not handle that allegation in his emailed statement.

Piper is also accused of underreporting his cash flow in personalized taxes in 2016, 2017 and 2019, the indictment demonstrates.

How did they plead?

Janbakhsh and Piper pleaded not guilty in their first appearances prior to a federal magistrate judge on Thursday in Nashville.

The future hearing in the circumstance had not been established as of Friday afternoon.

Reporter Rachel Wegner contributed to this tale.

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