Fraudster jailed after spending illegal proceeds on giant classic car collection

An American businessman has been sentenced to eight years behind bars for defrauding US banks of $US180 million ($AU280 million) over eight years – and using the proceeds to build a collection of more than 250 classic cars.

As reported by AP, the court found 70-year-old Najeeb Khan used a process known as 'cheque kiting' – artificially inflating the amount of money in his bank accounts, and deceiving banks into honouring cheques from accounts with insufficient funds – to 'earn' $US180 million ($AU280 million) from 2011 and 2019.

Mr Khan reportedly used the funds to support a luxury lifestyle, as well as building a collection of more than 250 classic cars.

Known as the Elkhart Collection, the inventory included a 1969 Lamborghini Miura P400S, a 1955 Mercedes-Benz 300SL Gullwing, a 1967 Toyota 2000GT and a Dodge Viper V10-based Alfa Romeo TZ3 Stradale Zagato.

Mr Khan’s fraud was discovered in 2019, with his car collection sold by RM Sotheby’s in 2020 to try and recoup some of the funds.

A total of 588 lots (cars, parts and memorabilia) went under the hammer but only raised $US44 million ($AU68 million) of the $US180 million total.

The most valuable car was a 1952 Ferrari 225S Berlinetta by Vignale that sold for $US2.8 million ($AU4.3 million), where the most affordable was a 1961 Hilman Minx Convertible that sold for $US3360 ($AU5160).

All lots were listed without reserve, so the entire collection has been sold, along with any other assets that could be liquidated.

It took the court until this month to sentence Mr Khan, who pleaded guilty to all charges.

As well as jail time, he has been ordered to repay $US121 million ($AU185 million) to the bank at the centre of the fraud as well as $AU42 million to clients and $AU15 million in taxes.