Q: A few weeks ago you reported an update on the case of a Granite Bay man, Michael Sahlbach, who was originally arrested in 2014 for alleged bank fraud in connection with National Credit Acceptance Co. I heard that he was exonerated and the federal indictment was dismissed. Is that true?
David, Granite Bay
A: Michael T. Sahlbach was arrested in May 2014 on six counts of bank and wire fraud following indictment by a federal grand jury.
According to court records available online, Sahlbach signed a plea agreement May 13 in which he pleaded guilty to subscribing to a false tax return, and the government agreed to move to dismiss the indictment. The indictment was subsequently dismissed May 27, and Sahlbach is scheduled for sentencing Oct. 14 for the false tax return offense.
The 2014 indictment stemmed from his activity as owner and operator of National Credit Acceptance Inc., a Sacramento-based debt collection business. The firm purchased debt from other companies at a discount and then attempted to collect on the debt. For that operation, according to the indictment, Sahlbach opened a $25 million line of credit with First bank by agreeing 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.
He allegedly told the bank on several occasions that he had contracted with Lender Exchange to purchase debt pools, but did not tell 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 alleged that Sahlbach transferred funds he received from First Bank to other bank accounts he controlled. The funds then allegedly were 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.