A former Iron Range businessman was sentenced to just over six years in prison after swindling classic car collectors out of more than $1 million, the U.S. Attorney's Office said.
Edwin Scott Verdung, 27, pleaded guilty to one count of wire fraud and one count of transaction money laundering last August. He was sentenced on Tuesday.
In a plea deal, Verdung admitted that from April 2007 to May 2010 he was paid to provide or restore classic cars at Memory Lane Classics, the business he operated in Chisholm with his father. Despite accepting funds, he failed to provide the cars or the restoration services he promised, the Hibbing Daily Tribune reports.
In some instances, Verdung would make false claims that he was making progress on rebuilding or restoring a customer's vehicle, the Star Tribune says. He also admitted to requiring some customers to make "progress" payments after providing fake photographs as proof of the progress he claimed to have made on the vehicle.
Verdung was sentenced to 75 months in federal prison and three years of supervised release and an order to pay restitution to his victims, the Hibbing Daily Tribune says. He could have faced up to 20 years on the wire fraud count and 10 years on the money-laundering count.
Memory Lane Classics quickly shut down in 2010 as authorities investigated the business' financial records, the News-Herald reports. Before closing the shop, Edwin Verdung and his father, Scott, 61, had been sued more than a dozen times since 2007, the Star Tribune reports.
Scott Verdung has not been charged in federal court. In February 2013, he was convicted in Hibbing of passing a bad check, the Star Tribune says. Scott Verdung and his wife, Barbara, had previously operated Memory Lane Classics in Florida, but they filed for bankruptcy in 2005, according to court records obtained by the Star Tribune.