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A Pennsylvania Buick dealer pleaded guilty in federal court to a charge of conspiracy to commit wire fraud in a case where he and two accomplices lied on their auto finance applications.From May 2015 to March 2016, Adam James Weaver, along with Douglas Alan Groom and Adam Brayton Coover, engaged in a scheme to defraud auto finance providers by using two straw purchasers to buy vehicles in their own names from Rick Weaver Buick GMC in Erie, Pa. Weaver is the son of founder Rick Weaver and was the dealership’s president.  Adam Weaver is leaving the store and turning over the controlling interest to his father.The three lied on the finance applications to make the straw purchasers appear more credit worthy and by not revealing that the straw purchasers were buying multiple vehicles at the same time. The value of many of the vehicles was also inflated to increase the funds received by the co-conspirators.
Published in Compliance News
Saturday, 19 August 2017 12:46

Dealership Pays for VIN Etching Claims

A New York Nissan dealership paid almost $300,000 to settle charges that the store deceived customers by selling VIN etching.
Pana Nissan LLC, d/b/a Nissan of New Rochelle, will pay a $298,000 settlement to the New York attorney general for deceptively charging hundreds of consumers for VIN etching that cost up to thousands of dollars per consumer. The cost of the etching was often added onto the final cost of the vehicle without the consumer’s knowledge or consent, after the customer had agreed upon the purchase price of a vehicle but before the sale transaction was finalized.
Following a consumer complaint in August 2015 that Nissan of New Rochelle had fraudulently sold an after-sale product, the attorney general's office started an investigation into the dealership’s practices. The investigation found that Nissan of New Rochelle sold these packages to hundreds of consumers, charging from $215 to over $5,000. 
Furthermore, Nissan of New Rochelle failed to clearly disclose the nature of the after-sale product to its customers. The “Total Loss Protection” or “Total Loss Protection Guarantee” product was advertised as a permanent etch or engraving of the vehicle’s VIN, or a registered serial number, on the windows of the vehicle – supposedly to deter theft. 
However, Nissan of New Rochelle did not actually etch the VIN onto the windows of the vehicles. Instead, for some vehicles, the dealership placed sticker decals with assigned registration numbers on the inside of the door or door-jamb where no one could see them, thus having no deterrent effect. 
For other vehicles, the dealership did not even provide stickers or decals.
Consumers were also led to believe that there would be a guaranteed credit up to either $3,000 or $5,000 toward the purchase of a new vehicle should their car be stolen. However, there were numerous conditions and limitations – such as that the credit would not be applied if it eliminated the dealership’s profit on the sale – which rendered the “credit” illusory. Only one consumer ever received a credit through the Total Loss Protection program.
Under the agreement, Nissan of New Rochelle will refund $276,127 to 298 consumers who were charged an add-on fee for the Total Loss Protection product. In addition to restitution, the dealership will also pay $22,084 in penalties, fees, and costs to the state.
Published in Crime
Friday, 11 August 2017 17:46

Dealership Faces Charges of Finance Fraud

A dealership located in Erie, Pa., and three men have been indicted on charges of conspiracy to commit wire fraud and wire fraud.The 13-count superseding indictment named Rick Weaver Buick-GMC Inc., along with Adam James Weaver, Douglas Alan Grooms, and Adam Brayton Coover.According to the superseding indictment, from May 2015 to March 2016, Coover, Grooms and Weaver engaged in a scheme to defraud auto creditors by utilizing two straw purchasers to buy vehicles in their own names from Rick Weaver Buick-GMC. The vehicles would then remain in Coover’s possession. The three facilitated the scheme by falsifying the finance applications to make the straw purchasers appear more credit worthy and by not revealing that the straw purchasers were buying multiple vehicles at the same time. The value of many of the vehicles was also inflated to increase the funds received by the co-conspirators.The law provides for a maximum total sentence of 340 years in prison, a fine of $8.5 million, or both, for each defendant. Under federal sentencing guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Published in Crime
Monday, 12 June 2017 22:44

Former GM Admits to Floor Plan Fraud

The former general manager of a New Jersey Chevrolet dealership was sentenced to 60 months in prison for his role in a scheme to defraud a bank and for filing a fraudulent tax return.Richard T. Pepe previously pleaded guilty to one count of conspiracy to commit bank fraud and one count of fraud and false statements on his 2008 U.S. tax return. According to court documents, Pepe and others acting on his behalf defrauded M&T Bank of almost $3 million from 2004 through October 2008.Pepe, acting as general manager of Chevrolet 73, received funds from M&T intended for floor planning by providing phony information to the bank, including false liabilities and profits on Chevrolet 73’s monthly financial statements. Pepe then used that money for personal expenses.Pepe also admitted falsely claiming that his income was $36,628 on his 2008 individual tax return when he knew his actual income exceeded that amount.In addition to the prison term, Pepe was sentenced to three years of supervised release and ordered him to pay forfeiture in the amount of nearly $3 million.
Published in Crime
Thursday, 23 February 2017 19:40

Salvage Dealer Admits to Clocking

A Virginia dealer pleaded guilty to operating an odometer fraud scheme involving over 100 vehicles.   Paul Robinson pleaded guilty to one count of conspiracy to commit securities fraud and odometer tampering.   Robinson owned and operated Affordable Auto Body Repair, a repair shop and licensed salvage vehicle dealer located in Chesapeake, Va.  Robinson purchased older vehicles, many of which had been involved in accidents, from an automobile auction specializing in vehicles from insurance companies.   On over 100 of these vehicles, Robinson altered or replaced the odometer to reflect a false, lower mileage.  He then obtained fraudulent Virginia motor vehicle titles with mileage readings matching the false, lower mileage on the new odometer, and passed these falsified title documents on to the auto purchasers.   Robinson obtained many of these fraudulent titles from a former DMV Select clerk named Steven Bazemore.  In many instances, Robinson asked Bazemore to return the documents used to procure the fraudulent titles rather than retaining the documents in the DMV file system.  This made it more difficult for the DMV to detect the fraud.   Bazemore previously pleaded guilty to his role in the conspiracy.  Bazemore was sentenced in September to one year of home confinement and ordered to pay restitution to the ultimate purchasers of the vehicles.   Robinson’s sentencing is scheduled for June 8.    
Published in Crime
Wednesday, 01 February 2017 00:42

Dealer Admits He Lied to Bank

An Iowa used-car dealer was sentenced to 13 months in federal prison for two counts of making a false statement to a financial institution. The 13-month sentences are to be served concurrently. Gretter was also ordered to serve five years of supervised release following his prison term, pay $200 to the Crime Victims’ Fund, and pay a total of $1,185,704.77 in restitution to Hills Bank & Trust Co. Gretter pleaded guilty to these charges on Sept. 20. According to the plea agreement, between Dec. 18, 2013, and Oct. 6, 2014, Gretter obtained loans from Hills Bank. As security for each of these loans, Gretter pledged multiple items of collateral that he knew included false statements, and were unavailable to Hills Bank as security. Specifically, Gretter forged the signatures of multiple people on items of pledged collateral and provided those documents to Hills Bank in order to influence Hills Bank to make the loans.
Published in Legal
Thursday, 19 January 2017 00:46

Floor Planner Says Dealer Stole Millions

A New Jersey used-car dealer has been charged with theft, money laundering and fraud for stealing money from a floor planner. In October of 2016, the Bergen County Prosecutor’s Office received a complaint from a floor planner regarding the theft of proceeds of the sale of motor vehicles by Antonio L. Gutierrez, the owner of The Luxury Haus. The complainant claimed that Gutierrez had defaulted on motor vehicle liens valued in excess of $5 million. As a result of an action to foreclose on the dealership, the floor planner suspected that proceeds in excess of $1 million were missing and/or had been stolen.An investigation revealed that Gutierrez had received the proceeds from the sales of numerous motor vehicles and had failed to report the sales or remit the monies to the floor planner. He then tried to conceal the proceeds by completing transfers of the monies to bank accounts unknown to the floor planner and unrelated to the initial sales transactions. The proceeds, in excess of $1 million, were then used by Gutierrez for his own purposes.
Published in Crime
Tuesday, 10 January 2017 22:41

Dealer Admits to Clocking

A Missouri automobile dealer was sentenced for a mail fraud scheme in which he sold dozens of vehicles with fraudulent titles that greatly underreported the actual mileage of the vehicles. Kenneth W. Smith, who operated Cars Unlimited in Lebanon, was sentenced to 18 months in federal prison without parole. The court also ordered Smith to pay a $50,000 fine. Smith pleaded guilty to mail fraud on June 21. When Cars Unlimited bought used cars at auction, the titles would show the correct mileage. Smith admitted that, instead of filing those titles with the state of Missouri, he requested replacement titles that showed a lower mileage. Smith could then sell the vehicle at a higher price. When investigators executed a search warrant at the business, they found instrument clusters used to replace odometers in vehicles. Smith obtained fraudulent replacement titles for dozens of vehicles that were sold by Cars Unlimited between February 2010 and Nov. 7, 2011. Smith (operating through Cars Unlimited) applied for and received 54 replacement titles from the state, each of which underreported the vehicle’s actual mileage. Smith resold these 54 vehicles at auto auctions using the fraudulent replacement titles. These 54 vehicles were sold for an aggregate total of approximately $346,450. When Smith purchased vehicles (through Cars Unlimited) at auto auctions, the vehicle titles he received showed each vehicle's actual mileage. After purchasing a vehicle, Smith submitted an "Application for Missouri Title and License" seeking a replacement title for the vehicle. Although he sought a replacement title, he in fact possessed the original title for the vehicle. In each of those instances, Smith forged the signatures of the previous owner of the vehicle. The state of Missouri prepared a replacement title that was mailed to Smith at Cars Unlimited.
Published in Crime
Friday, 11 November 2016 01:46

J.D. Power Awards Top Rental Brands

For the fifth consecutive year, the Enterprise Rent-A-Car, National Car Rental and Alamo Rent A Car brands have secured the top three spots in the annual J.D. Power 2016 North American Rental Car Satisfaction Study. Enterprise Holdings, the world’s largest car rental company, owns all three car rental brands, which are operated through a network of 9,600 regional subsidiaries and franchise locations.The Enterprise brand ranked highest in this year’s study and excelled in all six factors: costs and fees, pick-up process, rental car, return process, reservation process and shuttle bus/van. This is the 11th time the brand has topped the list. The annual 2016 study surveyed leisure and business travelers who rented vehicles at North American airports. Enterprise Holdings’ three car rental brands were the only ones to finish above the industry average.“When we acquired National and Alamo in 2007, our airport market share in the U.S. accounted for approximately 28 percent,” said Christine Taylor, executive vice president and chief operating officer of Enterprise Holdings Inc.“Today, our three car rental brands make up more than 37 percent of U.S. airport market share – a direct result of Enterprise, National and Alamo employees all coming together with a shared vision and a collective focus on customer service excellence.”VP
Published in Finance
Wednesday, 09 November 2016 19:23

Dealer Faces Tax Charges

Thomas G. Duke, operator of Automac USA Inc., has been arrested on charges for the theft of more than $359,000 in sales tax he collected from customers, but failed to send to the state, according to the Florida Department of Revenue.  If convicted, Duke faces up to 30 years in prison and up to $10,000 in fines, as well as possible repayment of stolen tax, interest, penalty and investigative costs. Automac USA, now closed, was located at 7505 Blanding Blvd., Jacksonville. According to Revenue Department investigators, Duke collected sales tax from customers at his car lot.  However, during various periods from November 2013 through November 2015, he failed to send to the state all of the sales taxes that he had collected from his customers. Under state law, sales tax is the property of the state at the moment of collection.
Published in Legal
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Men Face Charges of Defrauding Auto Creditors

Men Face Charges of Defrauding Auto Creditors

Two Pennsylvania men have been indicted by a federal grand jury on charges of conspiracy to commit wire fraud and wire fraud involving straw buys from a used-car dealership.According to...

Auto Stocks Outperform Market

Auto Stocks Outperform Market

The Kerrigan Auto Retail Index (The KAR Index), a composite of the seven publicl...

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