Rhode Island trucking company owner sentenced for bank fraud
March 11, 2021
The owner of Providence, R.I.-based CAT Inc. was sentenced for his role in defrauding the Federal Motor Carrier Safety Administration and committing hundreds of thousands of dollars in bank fraud.
On March 8, a Rhode Island federal district court sentenced Michael Chaves to 30 months in prison and three years of supervised release. Restitution is expected to be decided within 30 days.
In February 2016, Chaves submitted false 2014 personal tax return and 2014 business return documents for CAT Colonial Auto and motor vehicle purchase contract when applying for a $60,000 loan, according to federal court documents.
The indictment claims Chaves committed a similar offense at a different financial institution in November 2017. This time, he committed fraud by submitting false earning statements, motor vehicle purchase contracts and DMV documents for a $35,000 loan.
Chaves went to a third financial institution in October 2018. According to the indictment, he submitted false documents to obtain a $50,000 loan before going to a fourth credit union to fraudulently obtain another $50,000 loan in February 2019.
Additionally, Chaves is accused of defrauding another Rhode Island bank out of more than $64,000 by submitting 15 fraudulent checks made out to CAT Inc., according to a news release from the U.S. Attorney’s Office for the District of Rhode Island. The checks were purportedly drawn on an account of Land Rover of Richmond.
The news release also said that Chaves’ money scheme got into interstate commerce when he used wired communication to obtain two other loans. Chaves is accused of submitting documents via wire communications to obtain a $47,000 loan from a fifth financial institution in August 2016, as well as fraudulently wiring money for a separate $90,000 loan.
All of these loans obtained through fraud were under the guise of obtaining commercial vehicles for his business, federal court documents state.
However, Chaves’ business was placed out of service for safety violations. To skirt this dilemma, Chaves used someone else’s identification that would show no affiliation with the shut-down operation, according to a news release from the Department of Transportation’s Office of Inspector General. Chaves also attempted to influence and impede FMCSA investigations and administrative compliance reviews by falsifying U.S. DOT records, according to a news release from the Rhode Island U.S. Attorney’s Office.
In the end, Chaves had defrauded several Rhode Island banks out of more than $400,000, according to the DOT Office of Inspector General.
Tax evasion totals are estimated at more than $200,000 over a four-year period, according to court documents.
Chaves also is facing charges in a separate case for alleged crimes involving fraud on Amazon. A criminal complaint in that case alleges he ordered products from Amazon and replaced the original products with cheaper products, then would return the cheaper item for a refund for the original and more expensive item. By doing so, Chaves allegedly committed mail and wire fraud. More details on that case can be found here. LL