Brentwood area businessman Mahan Janbakhsh and Steven L. Piper of Joelton were arrested by FBI agents on Thursday for their role in an alleged conspiracy to commit multi-million-dollar bank fraud.
According to the Department of Justice, the indictment charges Janbakhsh and Piper with conspiring to defraud Capital One and First Tennessee Bank (now First Horizon); five counts of defrauding these financial institutions; five counts of making false statements and over-valuing property and securities to influence these financial institutions; and three counts of making false representations during official proceedings.
Prosecutors say Mahan Janbakhsh was a majority owner and the CEO of America’s United Financial, LLC, and Affiliates, which was comprised of nine car dealerships and six related finance companies throughout Nashville, Tennessee. He also was the owner of other automobile, radio, and real estate-related businesses.
Steven Piper was a Certified Public Accountant and the Chief Financial Officer for all Auto Masters entities. He also personally prepared tax returns for Auto Masters and Janbakhsh.
Department of Justice officials allege Janbakhsh’s used car dealerships would provide car loans in connection to sales, but they sold the loans to the related Auto Masters finance companies, which operated using loan credit with Capitol One and First Tennessee Bank. Auto Masters was required to submit monthly borrowing base certificates to report the total value of eligible loans, which formed the collateral for the line of credit.
Investigators say Piper submitted a borrowing base certificate on October 9, 2017, to Capitol One, disclosing that Auto Masters had overstated their collateral by over $30 million. Auto Masters admitted to overdrawing $26.4 million more than was permitted, which caused Auto Masters to file for bankruptcy the next week. The bankruptcy receiver determined that Auto Masters had overstated its collateral by nearly $37 million and had drawn over $24 million more than was permitted.
Allegedly, Janbakhsh, Piper, and others were involved in manipulating the financial database of Auto Master and sending false reports to Capitol One to make it appear as if there was more collateral, including false entries that made the loans appear current and creating false loans based on duplicate Vehicle Identification Numbers, vehicles that had been repossessed, vehicles that had been paid off, and using information from customers who had applied for loans but had been rejected.
Prosecutors say Piper also submitted false individual income tax returns for 2016, 2017, and 2019, in which he underreported his income.
Janbakhsh and Piper were both charged with making false statements under oath and falsely testifying during bankruptcy proceedings that they had no knowledge of anyone reporting incorrect information to the lenders and were not involved in the fraudulent scheme. Janbakhsh was also charged with witness tampering to hinder the investigation by providing the former Auto Masters manager payments of $10,000 and promising to provide additional funding of approximately $300,000 if he would leave the jurisdiction to prevent him from giving information about the fraud.
The indictment also contains a forfeiture allegation in which the United States seeks to recover all property representing the proceeds derived from the crimes, including a money judgment.
Janbakhsh and Piper face up to 30 years in prison and a $1 million fine if convicted.
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Kaitlyn Osteen is a reporter at The Tennessee Star and The Star News Network. Send Kaitlyn tips at [email protected].
Photo “Gavel and Money” by Towfiqu barbhuiya.
