Perhaps seeing one movie too many, a used car proprietor in Flint, Michigan, is accused of running a Fargo-style scam on Ally Financial.

Remember how the scam worked in the movie? The dealer buys cars with a line of credit from a bank where the inventory acts as collateral for the loan. The agreement is that the dealer will pay back some of the loan each time he sells a car and can borrow more money when he buys a car.

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The deal works for everyone if the dealer manages to sell the cars for more than he bought them and pays the bank promptly.

The scam involves the dealer not paying the bank back when cars have been sold or putting non-existent cars in inventory.

In the movies, dealers can get away with this by sending fake paperwork to the bank because Hollywood banks don’t do as many audits as they ought to.

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Turns out Ally Financial checked some of the paperwork sent to them by Edward Frank Usewick III for some of the cars he claimed to have in inventory at the chain of dealers he was affiliated with near Flint. While this little operation is funny when the Coen Brothers do it, in real life it is a different matter. As in, Federal indictment different.

Usewick has been indicted on 20 counts - things with words like “fraud” and “conspiracy” - and the accusations are not pretty. Everyone has lawyered-up as they say, including his wife, even though she has not been charged with anything. Turns out that the dealers run by Usewick were “operated” by LLCs owned by Cheyenne Usewick.

To add a layer to this onion, the used car dealers had been using the name of a local car dealer named Suski to lend credibility to their operation. Suski had agreed to let Usewick do this but changed its mind somewhere along the way.

So now, Usewick and Suski are suing each other. Some might wonder what Suski was thinking, getting into business with Usewick in the first place. In February 2011, he pled guilty to six counts of “producing fraudulent titles for the commission of a crime.”

Usewick is out on bond with a trial date set for January. Woodchipper jokes go below.

Follow me on Twitter: @stevelehto

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Steve Lehto has been practicing law for 23 years, almost exclusively in consumer protection and Michigan lemon law. He wrote The Lemon Law Bible and Chrysler’s Turbine Car: The Rise and Fall of Detroit’s Coolest Creation.

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