Former Chattanooga auto dealership chief Joseph Prebul must report to a federal prison on May 6 after a surprise ruling Friday in which a judge sentenced him to a year of incarceration.
Mr. Prebul, who went through months of criminal prosecution for allegedly bilking his brother-in-law out of about $7 million, seemed to have gotten his life back in order last fall when a friend made him the sales manager of the Lexus showroom at Capital Toyota and Lexus of Chattanooga.
Mr. Prebul, whose dealerships across Chattanooga and North Georgia went bankrupt amid a dizzying array of criminal and civil litigation, “deserved a second chance,” Capital Toyota and Lexus President Bob McKamey said when giving him the job.
PDF: Prebul govt sentencing memorandum
Mr. McKamey did not return calls Friday with regard to whether Mr. Prebul’s job would be waiting for him when he is released from prison.
On Friday, Mr. Prebul received the maximum punishment allowed after pleading guilty in November 2009 in U.S. District Court in New York to one count of misdemeanor bank larceny of $750.
He also must serve 400 hours of community service when he is released. It is not yet known in which federal prison he must serve his time.
THE CASE* Feb. 9, 2009: Federal investigators file a criminal complaint in U.S. District Court in New York against Joseph Prebul, alleging that he defrauded a then-unnamed victim out of millions of dollars.* Feb. 10: Authorities arrest Mr. Prebul at his home on Signal Mountain; he posts bond in U.S. District Court in Chattanooga the same day.* Feb. 11: Mr. Prebul files for voluntary Chapter 7 bankruptcy on all his auto dealerships in Chattanooga and North Georgia.* Feb. 12: Mr. Prebul’s brother-in-law Danny Bensusan files a $32 million civil lawsuit against the auto dealer in Hamilton County Circuit Court, making himself known as the alleged victim in the criminal case.* March 11: Mr. Prebul makes his first appearance in U.S. District Court in New York regarding the criminal complaint against him; he posts $500,000 bond and surrenders all travel documents and his travel is limited to New York, Tennessee, Georgia, Florida and Pennsylvania.* March 12: Mr. Prebul files a civil lawsuit in Hamilton County Circuit Court, accusing Mr. Bensusan of extortion and defamation.* May 7: A federal grand jury in New York formally indicts Mr. Prebul on 11 charges of wire fraud and one charge of mail fraud. The indictment alleges Mr. Prebul orchestrated a scam against Mr. Bensusan in which he used millions of Mr. Bensusan’s investment dollars to keep his Chattanooga and North Georgia car dealerships afloat.* May 15: Mr. Prebul pleads not guilty in federal court in New York to all criminal charges.* June 29: Mr. Prebul forced into involuntary Chapter 7 bankruptcy with regard to his personal finances.* Nov. 23: Mr. Prebul’s federal trial scheduled to begin. He instead strikes a deal, pleading guilty to one count of misdemeanor bank larceny. The penalty is a maximum of one year in prison.* Friday: Mr. Prebul sentenced in New York City to one year in prison.
Mr. Prebul also still must forfeit the close to $7 million the government originally had alleged he stole from his brother-in-law, Danny Bensusan, via wire fraud. Mr. Prebul was scheduled to go to trial the day he struck a deal with U.S. prosecutors on the 11 wire fraud charges, which could have
landed him in jail for years had he been convicted.
Attempts to reach Tom Ray, Mr. Prebul’s attorney who was scheduled to be with him in New York at the sentencing, were unsuccessful Friday.
Authorities prosecuted Mr. Prebul in New York because that’s where Mr. Bensusan lives and from where Mr. Bensusan apparently sent millions of dollars over the years to the Chattanooga businessman. In court documents, Mr. Bensusan said he thought the money was an investment in a high-interest bank account associated with the family car dealerships.
Instead, Mr. Prebul admitted in an formal address to the court in November that he had been dishonest about where the money was going and actually had spent it on a lavish lifestyle for his family as well as to keep his car dealerships afloat.
Mr. Prebul’s defense attorneys had hoped for straight probation with no prison time, calling “inconsistent” the government’s decision to let him plead guilty to such a minor crime while at the same time calling the businessman’s actions “egregious.”
The defense team maintained the case was a civil dispute that never should have been prosecuted criminally, characterizing the money that Mr. Bensusan gave Mr. Prebul as “loans.”