The owners of a former used car dealership in Centralia are under investigation by local police for the theft and fraud of more than $1 million from a local bank, according to Centralia police.
Keith and Lorinne Birdwell, the owners of Birdwell Auto Sales, have been under investigation by Centralia police and the Lewis County Prosecutor’s Office since mid-August.
Neither has been arrested or formally charged.
The investigation started after the bank, the name of which was not disclosed by police, claimed that since September 2011 the couple had stolen about $1 million by applying for various loans that they did not pay back, according to Centralia police.
The alleged theft is still under investigation, but it appears that the bulk of the money was stolen when the dealership used bank loans to purchase vehicles then did not pay them back after they sold the cars, said Detective Sgt. Pat Fitzgerald.
When a car dealership purchases a vehicle from an auction, the dealership’s bank puts out a flooring loan on the car, Fitzgerald explained. Then, after the dealership sells the car, with a profit, the business is supposed to pay back the loan they used to purchase it in the first place.
Essentially, the bank accused the dealership of selling the cars, lying about it, and not paying back the loan, he said.
Fitzgerald said that when an inspector from the bank would go to the car lot and check the vehicle identification number on the cars, and would ask about a specific car that was not on the lot, the owners would have an excuse for why the car wasn’t around, such as claiming that it was being detailed, fixed or was out on a test drive.
It was brought to the attention of the bank a few months ago after funds would come into the dealership’s account but not be transferred back to the bank, he said.
Another complication in the investigation is that since the dealership never paid the bank for the vehicles, and sold the vehicles anyway, several of the cars still belong to the bank even though they were purchased by customers, Fitzgerald said.
The bank, Fitzgerald explained, would legally be within its right to take the cars back because the sales were not legitimate. The detective added that he did not anticipate the bank doing that because the customers made the purchases in good faith.
Fitzgerald said investigators believe there are fewer than 10 potential past customers who could have been affected by this alleged fraud.
Several search warrants for documents and the vehicles have been served on the Birdwell’s bank accounts as well as their residence located in Toledo, according to a Centralia Police Department press release.
Fitzgerald said the department is still in the middle of its investigation. He said he did not know if arrests were imminent.
“These are allegations, and the investigation is to prove whether it did or did not happen,” he said.
Birdwell Auto Sales appears to have closed. The Chronicle attempted to contact the Birdwells, but the multiple phone numbers to their business and their residence were either disconnected or not legitimate.