The former finance manager for a defunct Erie auto dealership that was part of a federal fraud investigation was sentenced in federal court on Friday to serve two years and eight months in prison for his admitted involvement in the crime.
Chad Bednarski, 49, of Erie, who pleaded guilty in September to one count of fraud conspiracy, was also ordered to serve two years of supervised release, to pay restitution totaling nearly $1.7 million jointly with co-defendant Andy Gabler, and to pay a $1,000 fine, according to the sentence handed down by U.S. District Judge Susan Paradise Baxter in U.S District Court in Erie on Friday afternoon.
Baxter followed a request by Bednarski and his lawyer, Ken Bickel, in sentencing Bednarski below the range of recommended guidelines, which for Bednarski was a minimum of three years and five months to a maximum of four years and three months.
Bickel argued in court Friday that Bednarski, who had never been in trouble with the law, agreed that what he had done was wrong and cooperated with authorities.
Baxter noted in her sentence that it took into consideration Bednarski’s remorse, his acceptance of responsibility and his lack of criminal history.
Bednarski, who was the finance manager of Lakeside Chevrolet, and Gabler, 52, who owned the dealership and other dealerships in the now-defunct Lakeside Auto Group, were charged by federal investigators with illegal activities which included reporting false vehicle sales and submitting falsified information on loan documents.
The indictments handed down on Bednarski and Gabler in August 2019 alleged that they sold vehicles “out of trust,” or failed to use proceeds from vehicle sales to pay off bank loans, known as “floor-plan debt,” as required and did not inform their lender, S&T Bank, of Indiana, Pennsylvania, when they sold vehicles purchased using “floor-plan financing.”
Gabler also pleaded guilty to one count of fraud conspiracy and was sentenced on Thursday to four years and three months in federal prison.
Bickel said in court Friday that Bednarski didn’t “speak truth to power” in the scheme, as Gabler was the person in power and Bednarski was merely an employee who didn’t challenge his boss’ actions. The only thing Bednarski benefitted from was the ability to keep his job, Bickel said.
“He was not the aggressor here. He was merely following orders,” he said.
Bednarski told Baxter that he understands what he did was wrong, and he never denied it. He apologized to his family and friends and told the judge that he understands he deserves punishment.
“I will continue to respect the law and do what needs to be done,” he said.
Assistant U.S. Attorney Christian Trabold noted to Baxter that the scheme Bednarski confessed to participating in wasn’t related to a mistake or an accounting error, but was a scheme to defraud over a length of time that Bednarski “was unquestionably involved in.”
Trabold told the judge that deterrence is a critical factor in sentencing in these types of cases, not only for the accused but for the public at large. The sentence handed down can have a strong impact in the community, he said.
“This kind of conduct is going to cause a person to pay a very dear and heavy price,” Trabold said.