AFS Secures No Jail Time for Auto Lender Exec in Multi-Million Dollar Fraud Case

Led by Partner William P. Ziegelmueller, AFS secured a sentence of one day of time considered served, to be followed by one year of supervised release. A non-custodial sentence in a case involving such a large loss is extremely rare, especially since Mr. DiMeo’s co-defendant was sentenced to 48 months of incarceration.  More than 25 people submitted letters to the court attesting to Mr. DiMeo’s good character, his extensive charitable endeavors, and his success in building a new career in the five years since he was charged.

The now-defunct Honor Finance Corp made and serviced subprime auto loans. After procuring a $200 million line of credit in 2015, Honor Finance securitized thousands of loans and sold them as bonds to investors. According to the 2017 civil suit from the US Securities and Exchange Commission, Honor marketed the bonds by creating a Delaware trust that issued $100 million in notes, backed by the subprime loans. Mr. DiMeo and former CEO James Collins pled guilty to defrauding the bank that funded Honor’s loans by utilizing improper bookkeeping techniques to make Honor’s loan portfolio appear to be better performing than it actually was, so as to forestall charge-offs and allow continued funding of new loans. They also acknowledged diverting millions of dollars of earnings from the sale of GPS devices and warranties from Honor Finance to another company they personally owned.

Mr. DiMeo pleaded guilty to one count of mail fraud and agreed to cooperate with the US Attorney’s Office for the duration of the proceedings.