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Cape business man pleads guilty to bank fraud
Jack McDonough, who was an owner of McDonough Motors Inc., Buyers Choice Auto Sales Inc. and Buyers Choice Finance Co. Inc., has pleaded guilty to bank fraud in federal court.
McDonough, 61, of Cape Girardeau pleaded guilty to one count of bank fraud Friday before U.S. District Judge Charles A. Shaw. Sentencing has been set for Sept. 12. McDonough faces a maximum of 30 years in prison and a $1 million fine.
Reached at his home Friday, McDonough de- clined comment.
Prosecutors said that during October 2003, McDonough was a signatory on checking accounts for all three businesses. The accounts were at local banks.
McDonough participated in a "scheme," prosecutors said, where he would write checks on these bank accounts when he knew the accounts did not have sufficient funds to cover those checks. McDonough would make these checks payable to one of his businesses, which have since closed, and deposit it in one of the other bank accounts.
McDonough would cover that check by writing another check in a like amount from the depositing bank account and deposit that check in the bank account where the first check came from. McDonough admitted to prosecutors that the banks suffered losses in excess of $400,000.
The charges are a federal offense because banks are insured by the Federal Deposit Insurance Corp. McDonough was an owner of the McDonough Mazda dealership in Cape Girardeau, which had been located at 2611 Auto Park Drive.