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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 26, 2012

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Eric A. Richardson, a former Cedar Hills Mayor has pleaded guilty to felony bank fraud when he falsified a car loan financing application in a scheme to skim equity. This comes only months after he was charged with running a Ponzi scheme by the U.S. Commodity Futures Trading Commission in May of this year.

The U.S. District Court for Utah alleges that Richardson defrauded HeritageWest Credit Union based in Tooele, Utah.

Richardson had resigned only one month ago in June. Three days later he was charged with bank fraud by federal prosecutors.

Richardson currently faces 12 months in prison with the potential for early release if he maintains good behavior while in prison.

In February 2010, Richardson allegedly signed a car loan financing application for $57,144 towards a 2009 Land Rover. The vehicle cost substantially less than $57,144, allowing the alleged criminals to skim the difference for their own uses not related to a car purchase.

The prosecution claims that Richardson failed to disclose several auto loans from multiple banks valued at $80,000 along with a $168,000 rental property mortgage. Additionally, known criminal Christopher D. Hales acted as Richardson’s accomplice and falsified that Richardson was earning $15,000 a month.

The prosecution argues that Richardson knew the loans were worth more than the vehicle’s value and was complicit in the car loan financing fraud. Richardson revealed that the proceeds were divided up with his accomplices and collaborators.

Near the beginning of his mayoral term, the populace of Cedar Hills pushed for Richardson’s removal while accusing him of reallocating city funds

“With all due respect, Mr. Richardson, your finances are a mess,” said U.S. Magistrate Judge Paul Warner. “As they say, you can’t get blood from a turnip. We’ll see what happens.”

Rodney Snow, Richardson’s attorney claims that Richardson is a “fallout victim” of a past business partner who is currently serving time in prison for operating a financial scam that victimized individuals and lenders for $12.7 million.

“There’s a lot of mitigating factors here,” explained Snow.

Despite pleading guilty to the car loan financing crimes, Richardson could potentially face 30 years in prison and a fine of $1 million.

Richardson’s sentencing is will be in November.