A onetime Iron Range businessman has admitted to swindling classic car buffs out of more than $1 million with false promises to restore their vintage vehicles.
Edwin S. Verdung, 26, pleaded guilty Thursday in federal court in Minneapolis to one count of wire fraud and one count of money laundering as part of a three-year scheme.
According to his plea agreement, from April 2007 through May 2010, Verdung was paid to provide or restore classic cars at Memory Lane Classics, the business he operated in Chisholm with his father. However, he failed to provide the cars or the restoration services as promised.
In some instances, he falsely claimed that he had made progress in the work, according to his plea agreement. He also required some customers to make “progress” payments, providing them with bogus photographs of the restoration.
Edwin Verdung could face up to 20 years in federal prison on the wire fraud count and 10 years on the money-laundering count. A date for sentencing has not be set.
His father, Scott Verdung, 60, has not been charged.
Edwin Verdung has moved to Michigan, where he pleaded guilty May 3 in connection with other car transactions.
Scott Verdung was convicted in Hibbing in February of passing a bad check. Court records at the time listed him with a Duluth address and said he was given three years’ probation.
Memory Lane Classics hastily shut down in the spring of 2010. As word spread online, customers rushed to Chisholm to pick up their cars and parts. Many who had paid between $30,000 and $80,000 found their cars in various stages of completion.
Before closing the shop, the Verdungs and Memory Lane had been sued more than a dozen times since 2007.
Scott Verdung and his wife, Barbara, had previously operated Memory Lane Classics in West Palm Beach, Fla., but they filed for bankruptcy in 2005, according to court records.