A Salem man allegedly defrauded an Albany auto dealer of more than $200,000 via a scheme involving credit cards and the online payment service PayPal, according to police.

Albany police arrested Patrick Martin Luther Smith, 40, Wednesday at a business in the 300 block of Church Street S.E. in Salem.

Back in August, Bill Rogers Honda, 4120 Santiam Highway S.E., told Albany police it had fired Smith in July and believed that he had misappropriated funds during his time with the dealership. The company thought the thefts occurred between 2008 and July 2009.

Smith had been service manager for the Albany business since 2003.

According to Detective Cpl. Steve Dorn, Smith allegedly set up a credit card in Bill Rogers' name.

The owner noticed something was wrong when he tried to redeem credit card points, police said. He noticed that the card balance, which was usually around $2,000, stood at a staggering $47,000.

The company had been making payments on the business credit card, but Smith allegedly falsified business records showing a much smaller balance, police said.

Police estimate damages caused by Smith at more than $200,000.

Smith faces charges including identity theft, computer crime, first-degree theft, falsifying business records and cocaine possession.

He was booked at the Linn County Jail.

Smith was still lodged today. He was scheduled for arraignment at 3:30 p.m.