Louis Harrelson's six-store dealership group used the slogan "Everybody rides." But federal prosecutors say the dealerships took lenders for a ride, as employees falsified income and accepted household appliances as trade-ins to secure customers' loans.

Harrelson, whose stores are in Charlotte, N.C., has pleaded guilty in a U.S. district court to aiding the crimes of nine former employees. They falsely secured loans between 1999 and 2005 that cost lenders more than $1.2 million, federal prosecutors say.

Harrelson, 79, has worked in auto sales since 1955. His six stores sold Mazda, Nissan, Toyota, Ford, Suzuki and Hyundai brands. The Nissan store was not involved in the fraud.

"The philosophy of the Harrelson dealerships was, 'Never let a customer leave the store without purchasing a vehicle,' " the employees' indictment said.

To secure sales and receive their commissions, the indictment said, employees sent consumer lenders false information about customers who wouldn't ordinarily qualify for loans. Many times, customers defaulted on loans, resulting in the lenders' losses.

The Harrelson hustle

By falsifying loan applications, Louis Harrelson's employees got financing for customers who couldn't qualify elsewhere. To get loan approval, the employees

• Told lenders that customers without down payments had received in-house rebates

• Inflated trade-in values to make up for too-small down payments; in some cases, customers used household   appliances as trade-ins

• Accepted checks for down payments, knowing the checks probably would bounce

• Inflated customers' incomes and job titles

• Reported that some credit-challenged customers worked for a local newspaper; the newspaper's owner confirmed the lie in exchange for the purchase of advertising

Source: Court documents