Defendant Adam Weaver’s father, Rick, will retake control of his namesake company, Rick Weaver Buick GMC, defense lawyers said.
After years of working for his father, car dealer Adam Weaver bought his father’s share of the family business, Rick Weaver Buick GMC, in 2008.
Nine years later, a guilty plea in federal court has forced Adam Weaver out.
And the plea has prompted his father, Rick Weaver, now 71, to retake control of the auto dealership, which he founded in 1982 and which remains in business at 714 W. 12th St. in Erie.
The reverse succession became public Monday, after Adam Weaver, 41, pleaded guilty in federal court in Erie to a felony count of conspiracy to commit wire fraud.
The plea ended the prosecution of a lengthy case that focused on the use of “straw buyers” to purchase vehicles at inflated prices from Rick Weaver Buick GMC. The scam generated ill-gotten profits for the business and left banks with defaulted loans as well as repossessed cars and trucks worth much less than their sales prices.
Adam Weaver, indicted in September 2016, when he was the dealership’s owner and president, remains free on unsecured bond of $10,000 and faces a maximum sentence of 30 years in federal prison at his sentencing April 9 before U.S. District Judge David S. Cercone, who accepted the guilty plea.
The effects of the guilty plea on the Rick Weaver dealership will be immediate. Adam Weaver must step down as president and divest his ownership stake because GMC prohibits a felon from owning a dealership, the lawyer for Rick Weaver Buick GMC, Michael Agresti, said after Monday’s hearing, which he attended.
With Adam Weaver out of the dealership, Rick Weaver will regain control of the business, said Agresti and Adam Weaver’s lawyer, David Ridge.
Rick Weaver has remained an officer of the company since he sold his share to his son in 2008, the lawyers said, but they said he has had no active role in the past three to four years. Adam Weaver, who, like his father, lives in Fairview, had been president of Rick Weaver Buick GMC since 2002.
Agresti said whether Adam Weaver will continue to have a non-majority ownership stake remains uncertain, though Agresti said “he won’t have an active role, that’s for sure.” He said Rick Weaver would have no comment.
Rick Weaver Buick GMC was a corporate defendant in the fraud case but agreed to end the prosecution against it by entering a pretrial diversion program. The deal eliminates the possibility that the business would have been convicted, which would have disqualified it as a GMC dealership.
With Monday’s guilty plea, Adam Weaver’s “dad is going to take over the business and keep the business open,” Ridge said.
By pleading guilty, Weaver took the same route as his co-defendants in the case, Adam B. Coover and Douglas A. Grooms, who pleaded guilty a week ago.
The U.S. Attorney’s Office in Erie accused the three of engaging in a loan scheme that used the straw buyers to inflate the price of 12 cars the Rick Weaver dealership sold between May 2015 and March 2016.
The straw buyers defaulted on the loans, leaving banks and other lenders unable to recoup the cost of the loans, the government said.
The U.S. Attorney’s Office in Erie is still determining the amount of restitution it will seek from Adam Weaver at sentencing, but the amount at this point is just under $150,000, the office said. The restitution will cover the losses that banks and other lending institutions suffered in the fraud.
Coover pleaded guilty to a count of conspiracy to commit wire fraud and 12 counts of wire fraud, all felonies, in the Weaver case. Grooms, the dealership’s former general manager, also pleaded guilty to the same charges in the case.
Both men are set to be sentenced March 19.
Weaver also faced felony counts of wire fraud and conspiracy to commit wire fraud. A superseding indictment in August added a count of wire fraud to the 13-count indictment that was originally filed in September 2016.
Though Weaver pleaded guilty to only one count, he accepted responsibility for the allegations covered in all the counts, Assistant U.S. Attorney Christian Trabold said in court. As part of the plea deal, Weaver must also pay a $400,000 fine, though the dealership can contribute payments toward that amount.
Agresti, the dealership’s lawyer, said the company would help pay the fine.
“Obviously, the money has to come from somewhere,” he said.
Trabold in court characterized Grooms as central to the scam. He said Grooms started working as general manager at Rick Weaver Buick GMC in 2014 after he was fired as the general manager of Community Chevrolet in Meadville, from which he was later have found to have embezzled $485,000.
Grooms immediately made Rick Weaver Buick GMC profitable, Trabold said.
He said Grooms initially agreed to the use of straw buyers at the Weaver dealership because he hoped Coover would help him pay off his restitution in the Community Chevrolet case.
Trabold said that Coover proposed the idea to Grooms in July 2015, suggesting that he would use a straw buyer to purchase a vehicle from Rick Weaver and he would then sell the vehicles at his now-defunct business, Infinity Automotive LLC, in the 2400 block of State Street in Erie. Coover told the first straw buyer that she would become a 15 percent owner of Infinity Automotive in exchange for conducting the purchase, Trabold said.
Trabold said Grooms informed Adam Weaver of the scheme at the outset of the agreement, and that Weaver became more involved later, when one of Coover’s checks bounced and he became indebted to the dealership for more than $80,000.
Weaver eventually agreed to a plan in which a second straw buyer would purchase two vehicles at an inflated price without taking possession of them, with about $20,000 in profits going toward Coover’s debt.
Grooms is serving a two-year sentence in federal prison for embezzling the $485,000 from Community Chevrolet between June 2008 and September 2013. Grooms in March 2016 pleaded guilty to a count of conspiracy to commit wire fraud in that case.
Grooms a week ago also pleaded guilty in a federal bankruptcy case. He was indicted in May 2016 on a charge that he failed to disclose that he had $6,400 in cash to the Office of the U.S. Trustee, which is monitoring the Chapter 7 bankruptcy case he filed in U.S. Bankruptcy Court in Erie. Judge Cercone will sentence Grooms on March 19 in that case.
As for Coover’s $80,000 debt to Rick Weaver Buick GMC, it is still not fully paid. Despite the money that the fraud scheme generated, Trabold said, Adam Coover still owes Rick Weaver Buick GMC about $40,000.
Ed Palattella can be reached at 870-1813 or by email. Follow him on Twitter at Media Media
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