Q: In May 2014, Michael Sahlbach of Granite Bay was arrested on suspicion of a $6.8 million bank fraud. I’ve seen nothing in the paper since then. Can you tell me what has happened to the case?
Paul, Granite Bay
A: Michael Sahlbach is awaiting trial on bank and wire fraud charges stemming from his activity as owner and operator of National Credit Acceptance Inc., a Sacramento-based debt collection business.
According to federal court records available online, his next court date is May 13 for a status conference.
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The Sacramento Bee reported that National Credit Acceptance Inc. purchased pools of consumer debt from other companies at a discount and then attempted to collect on the debt. For that operation, Sahlbach opened a $25 million line of credit with First Bank by agreeing with the bank that his firm would buy debt by providing 15 percent of the purchase cost and the bank financing 85 percent of the debt’s cost.
The federal indictment said that, on several occasions in the fall and winter of 2008, Sahlbach told the bank he had contracted with Lender Exchange to purchase debt pools. As a result, First Bank wired $6.8 million to Lender Exchange. But Sahlbach had not told the bank that he controlled Lender Exchange or that he had registered Lender Exchange under the alias M. Hansen, with a phony address.
The indictment alleges that Sahlbach transferred funds he received from First Bank to other bank accounts he controlled. The funds were then used for business expenses and to provide money for National Credit Acceptance’s required 15 percent contribution to get additional funds from First Bank.
Sahlbach later defaulted on his entire line with First Bank, federal authorities said.