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Department of Justice - Two Men Convicted Following Federal Fraud Conspiracy

Posted Thursday, February 2, 2023, at 2:35 PM

Two Men Convicted Following Federal Fraud Conspiracy Trial for $1 Million “Free Bankruptcy” Scheme to Strip Liens from 100 Cars

INDIANAPOLIS- A federal jury has found Brian Fenner, 47, of Indianapolis, and Dennis Birkley, 63, of Wisconsin, guilty on all charges following a six-day trial. The two men were each convicted of one count of conspiracy, fourteen counts of fraud, and three counts of money laundering.

“These defendants engaged in a brazen and long-running fraud scheme, illegally enriching themselves at the expense of financially distressed individuals and their lenders,” said Zachary A. Myers, United States Attorney for the Southern District of Indiana. “These fraudsters repeatedly lied and created false documents to exploit Indiana regulators and the bankruptcy process. Complex economic crimes are a federal prosecution priority, and these convictions demonstrate that those who choose to engage in these schemes will be held accountable.”

“Those who prey on consumers in financial distress, cause great harm to the lenders, and abuse the bankruptcy process to carry out their fraudulent activities across the nation strike at the very core of the integrity of the bankruptcy system and will not be tolerated,” stated Nancy J. Gargula, United States Trustee for Indiana and Southern and Central Illinois (Region 10). “We appreciate the commitment of U.S. Attorney Myers and our law enforcement partners to holding those who abuse the bankruptcy system accountable, as well as the efforts of the U.S. Attorney’s Office, FBI, and our law enforcement partners who helped bring these defendants to justice.”

According to court documents and evidence introduced at trial, between 2013 and 2016, Fenner promoted the “Sperro free bankruptcy program” nationwide to financially distressed people who owed more in car loans than their cars were worth. Through this purported “free bankruptcy program,” Fenner promised to pay the debtors’ bankruptcy attorneys’ fees if they turned over their vehicles to him. Numerous people from across the country signed on with the program and surrendered their vehicles to Fenner, including from as far away as California and Arizona. Fenner arranged for the debtors’ cars to be towed to his lots in Indianapolis for outlandish fees.

Indiana law required towing and storage companies to hold auctions to sell vehicles to satisfy unpaid debts and give the auto loan holders any proceeds of the sale exceeding the towing and storage fees. Fenner then pretended to “sell” the cars at “auctions” to cover the exorbitant towing and storage “fees.” These fraudulent auctions were part of a series of fraudulent documents and lies submitted to the Indiana Bureau of Motor Vehicles, which resulted in the “buyer” receiving a free-and-clear car title from the BMV. Birkley and his company, AMI Asset Management, were the successful bidders for all 100 vehicles obtained by Fenner from debtors. Birkley falsely claimed to have paid Fenner the exact amount he claimed he owed for towing and storage fees, leaving nothing to satisfy the lenders' lien or return to the individuals. In fact, Birkley and Fenner were engaged in the scheme together, and Birkley did not pay Fenner anything for the cars to which Birkley fraudulently obtained title.

Instead, once Birkley received vehicles with titles clear of liens from banks or anyone else, he sold the vehicles, sometimes at a real public auction, and often received thousands of dollars in profit, which he split with Fenner. Birkley and Fenner illegally obtained over $1 million through their fraud. In the end, the scheme left the financially distressed individuals with no vehicles but still with the vehicle loan debt, which they often could not discharge in bankruptcy.

The charges resulted partly from a referral by the U.S. Trustee for Region 10 to the U.S. Attorney for the Southern District of Indiana. This case was investigated by the FBI and the Indiana State Police, with assistance from the Department of Justice’s U.S. Trustee Program, in collaboration with the Southern Indiana Bankruptcy Fraud Working Group coordinated by the U.S. Trustee.

U.S. Attorney Myers thanked Assistant U.S. Attorneys Kate E. Olivier and Bradley P. Shepard, who prosecuted this case.

U.S. District Court Judge Richard L. Young presided over the trial and ordered that Fenner and Birkley be sentenced in early May of 2023. Both face up to 20 years in prison, followed by 3 years of supervised release. Actual sentences are determined by a federal district court judge and are typically less than the maximum penalties.