Lancaster County Treasurer Andy Stebbing's attorney took aim at the state's case Monday, arguing prosecutors had overcharged him and investigators should have notified him of deficiencies on his tax returns before they charged him with felonies.
"They intentionally didn't do that," Sean Brennan argued at the close of a preliminary hearing in Lancaster County Court.
But Nebraska Assistant Attorney General Laura Nigro countered the evidence showed that more likely than not -- the threshold for the case to move on to district court -- Stebbing was selling vehicles as a business without a dealer's license.
Stebbing is charged with two counts of falsifying bills of sale, two counts of filing fraudulent state income taxes and one count of selling cars without a license, each a Class IV felony.
Matt Brodecky, a Nebraska State Patrol investigator in the vehicle fraud division, said Stebbing had used Craigslist and Facebook to sell 12 vehicles within a 12-month period and had tried to sell a 13th.
Under state law, anyone who sells more than eight must register with the state as a dealer. Stebbing didn't.
"That looks a lot like a business," Nigro said.
Even if it isn't, she said, it's still income that Stebbing failed to report on his tax returns.
It ultimately could come down to a matter of interpretation of state statutes and whether Stebbing's vehicle sales were "bonafide consumer transactions," as Brennan contends.
By law, vehicle owners can sell their car or truck even if they aren't a dealer if they have titled and registered it and had it for a period of time.
Brodecky said Stebbing titled and registered seven of the 12, but took issue with Brennan's assertion that they were exempt from being counted toward the eight.
"If he sold one vehicle without titling and registering it, he's not exempt," Brodecky said.
Nigro argued that Stebbing had failed to meet the requirements to be considered a consumer in five ways and twice put false purchase prices on bills of sale, according to buyers.
Brennan took issue with the charge itself, saying there is no such thing in statute as falsifying a bill of sale. If someone put the wrong purchase price on a bill of sale that's a misdemeanor, not a felony, he said.
Mark Ford, a criminal investigator in the Nebraska Department of Revenue, testified at the hearing that he had looked at Stebbing's bank records and tax returns and determined he had failed to report about $5,500 in income from vehicle sales one year and $2,500 another.
On those same returns, Stebbing reported three other side businesses involving DVD sales, lawn care and an Uber ride service. But not the car sales, he said.
Ford said Stebbing told another investigator he was struggling financially due to a recent divorce and decided to buy and sell some cars to supplement his salary as county treasurer.
Stebbing turned most of the vehicles around quickly, a day to a couple of weeks, the investigator said. One took 45 days.
Brennan pressed Ford about why he didn't send Stebbing a notice of tax deficiency, which is required by law.
"I would consider them fraudulent not insufficient," Ford said.
What prohibited him from sending a taxpayer a notice saying he owed money, Brennan asked. Then not paying it would clearly be a willful act.
At the end of Monday's hearing, Seward County Judge C. Jo Petersen gave the state 10 days to file a brief in response to Brennan's, and she told Stebbing she could bind over all, some or none of the charges.
Petersen is presiding over the case because Lancaster County judges declared a conflict.