Former Pennsylvania Dealer Principal Wants House Arrest in $1.5M Fraud, Says Reputation Already Ruined

Andy Gabler, the Erie County auto dealer who pleaded guilty to defrauding a bank and other victims of about $1.5 million, will be sentenced next month, and the defense has made its position clear on what it wants the penalty to be.

Andy Gabler, Former President of the Lakeside Auto Group
Andy Gabler, Former President of the Lakeside Auto Group

Many people now think of Gabler as just “another car dealer crook,” and his ruined reputation is punishment enough, his lawyer said in a recently filed sentencing statement. The defense is arguing that prison is not the place for Gabler.

Gabler faces incarceration of between four years and three months and five years and three months when he appears before a judge for sentencing in U.S. District Court in Erie on Feb. 11. The length of the potential sentence is based on the federal sentencing guidelines, the U.S. Attorney’s Office in Erie said in a filing.

But the 52-year-old owner of the now-defunct Lakeside Auto Group is arguing that he should receive a sentence of probation or no more than a year of house arrest.

Gabler is asking for a “monumental downward departure” from the federal sentencing guidelines in his case, Gabler’s lawyer, Elliot Segel, wrote in the sentencing statement, filed Jan. 11. No matter what the length of the sentence, Gabler will have to pay restitution of $1.5 million.

In a document that runs to 47 pages, and which makes references to the late broadcaster Tim Russert, civil rights icon Martin Luther King Jr. and the character of Clarence, the guardian angel to distraught banker George Bailey in the classic Christmas movie “It’s a Wonderful Life,” Segel contends that Gabler’s guilty plea, remorse, lack of a prior record, his charitable work in the community — including a pay-it-forward campaign — are among many factors that should spare him a prison sentence.

Perhaps “more punishing” than anything is Gabler’s lost standing, Segel wrote. He wrote that the name of Gabler and his family members “has already suffered an emotional toll and extreme humiliation and loss of his hard-earned good community reputation.”

Segel also wrote: “So many people, when they hear his name now, do not think of the ‘Pay it Forward’ van or of all the blood, sweat and tears Mr. Gabler invested in doing good for others; instead, they think of just ‘another car dealer crook.’ Besides all this, there is the matter of restitution, which, considering the sum in this case for Mr. Gabler, is akin to a life sentence.”

U.S. District Judge Susan Paradise Baxter is scheduled to sentence Gabler on Feb. 11 and sentence his former finance manager, Chad Bednarski, on Feb. 12. Baxter on Thursday scheduled a status conference on the case for Jan. 28.

Trabold has until Feb. 4 to file the government’s response to Segel’s sentencing statement, but he has indicated that he will challenge Segel’s push for leniency. In a one-page document he filed on Jan. 11, Trabold said his sentencing memorandum “will recommend a sentence well within Gabler’s sentencing range of 51 to 63 months” — or a minimum of four years and three months and a maximum of five years and three months.

Sales ‘out of trust’

Gabler and Bednarski, his co-defendant, each pleaded guilty in September to one count of fraud conspiracy, for using fake sales and other schemes to steal $1.5 million between January 2015 and January 2019.

Gabler and Bednarski, 49, were indicted in August 2019 on charges related to practices at Gabler’s now defunct Lakeside Auto Group dealership, which had locations in Harborcreek Township, North East Township and Girard.

The two were accused of a variety of illegal activities, ranging from reporting phony vehicle sales to submitting falsified information on loan documents. Bednarski was finance manager at Lakeside Auto Sales and Lakeside Chevrolet, another dealershipGabler owned. The businesses sold used and new cars.

Guilty pleas:‘Multiplicity’ of fraud in auto dealer case

Gabler and Bednarski each face a statutory maximum of 30 years in federal prison and a fine of up to $1 million, though the guideline sentences are far less. The sentencing guidelines take into account such factors as whether a defendant has a prior record or pleaded guilty. Gabler and Bednarski are free on unsecured bonds.

Bednarski is facing a guideline range sentence of three years and five months to four years and three months, his lawyer, Kenneth Bickel, wrote in court records. Bickel, like Segel, is seeking a sentence of house arrest.


Gabler’s businesses were teetering in January 2019, when the FBI got information from employees that Gabler’s dealerships were in “significant financial trouble,” Trabold said at the plea hearing for Gabler and Bednarski. He said banks also told the FBI they believed Gabler’s dealerships were engaged in fraud.

The FBI investigation led to the indictment, which alleged Gabler and Bednarski were selling vehicles “out of trust,” or failing to use the proceeds from vehicle sales to pay off bank loans, known as “floor-plan debt, ” as required. The indictment alleged that Gabler and Bednarski did not inform their lender, S&T Bank, of Indiana, Pennsylvania, when they had sold vehicles purchased using “floor-plan financing.”

The failure to report the sales allowed the dealerships to delay or avoid making the required payments to S&T Bank for the sold vehicles, the government said. In such situations, banks cannot repossess the sold vehicles to recover loans because a dealership has already transferred the titles of the vehicles to the new owners.

‘Robbing Peter to pay Paul’

In his sentencing statement, Segel wrote that Gabler also deserves leniency because business survival rather than personal gain was behind the fraud — another contention that the U.S. Attorney’s Office is almost certain to challenge.

“Mr. Gabler’s was not a crime motivated by greed,” Segel wrote, and Gabler “did not personally profit from it. Rather, his offense conduct was motivated by his failed attempts to save his business against the overwhelming and financial difficulties he unexpectedly encountered shortly after he purchased it.”

To prop up his dealerships, Segel wrote, Gabler “began his offense conduct of ‘robbing Peter to pay Paul,’ all the while hoping that he would one day, somehow, be able to get current with all his obligations.”

Source: Auto dealer Andy Gabler wants house arrest in $1.5M fraud, says reputation already ruined