Federal Prosecutors will ask a judge in New York City tomorrow to sentence former Chattanooga auto dealership mogul Joseph Prebul to one year in a federal prison.
Mr. Prebul pleaded guilty last November on the day his trial was supposed to have begun to one count of bank larceny.
The plea deal came despite charges for almost a year from federal authorities that he had bilked his brother-in-law out of about $7 million by way of wire fraud. Had Mr. Prebul gone to trial and been convicted, he could have faced more than 20 years in prison.
The plea to bank larceny amounted to an admission that he had stolen just $750. The crime carries a maximum of one year.
Prosecutors never have stated why they allowed Mr. Prebul to plead to a much lesser misdemeanor crime. Mr. Prebul’s New York defense attorney Maurice Sercarz suggested after the plea last year that he hoped the outcome would soothe family tensions. Brother-in-law Danny Bensusan is married to Mr. Prebul’s sister and lives in New York City.
Mr. Prebul has agreed to forfeit to the government the millions of dollars he acknowledged in an allocution to the court that he did not have the right to spend in the way he did.
Mr. Bensusan for years had sent the money to Mr. Prebul thinking it was being invested in a high-interest bearing account. Mr. Prebul actually was using it to pay for personal expenses and to help keep his businesses afloat. All Prebul dealerships are now in bankruptcy.
Mr. Prebul’s defense team has not yet filed a sentencing memorandum with the court. It is expected that they will object to jail time.