Lebanon car dealer sentenced for mileage fraud

A Lebanon automobile dealer was sentenced in federal court yesterday for a mail fraud scheme in which he sold dozens of vehicles with fraudulent titles that underreported the actual mileage of the vehicles.

Cars Unlimited owner Kenneth Smith, 62, of Lebanon, was sentenced by U.S. District Judge Douglas Harpool to 18 months in federal prison without parole and ordered to pay a $50,000 fine, according to a news release from the office of Tammy Dickinson, U.S. attorney for the Western District of Missouri.

Smith pleaded guilty to mail fraud on June 21 after being charged Aug. 26, 2014, in a seven-count indictment - all mail fraud counts - by a federal grand jury in Springfield.

Smith bought used cars for the company at auctions, and instead of filing the accurate mileage on the titles with the state of Missouri, he would request replacement titles that showed a lower mileage. He then could sell the vehicles at a higher price. Adjusters used to replace odometers in vehicles were found at Smith’s business, according to the release.

At auto auctions between February 2010 and Nov. 7, 2011, Smith resold 54 vehicles, each with fraudulent replacement titles, at a combined resale value of $346,450, according to the release.

The case was prosecuted by Assistant U.S. Attorney Patrick Carney and investigated by the FBI and the Missouri Department of Revenue, Compliance and Investigation Bureau.