Dealer Fraud

Peter Moutafis the owner of Riverhead Suzuki, also known as Moutafis Motors and Prestigious Motors, has been charged with filing fake warranty claims for vehicle repairs. According to the police these repairs were never performed.

Police claims that Moutafis, 35, the car dealership owner created bogus records of mechanical failures on the used vehicles with extended warranties bought at his dealership. Later without the owners’ knowledge the dealership owner fraudulently billed warranty companies for repair work done by the dealership.

Police reported that yesterday Moutafis, of 181 Cranford Blvd., surrendered to Seventh Precinct detectives and was charged with insurance fraud, grand larceny, falsifying business records, and possession of a forged instrument, police said.

__________________________________________________

[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]

A 33-year-old Erin Mills man and a Sarnia woman are each facing 15 charges under the Motor Vehicle Dealers Act after damaged cars were sold to unwary buyers.
A joint investigation Ontario Motor Vehicle Industry Council (OMVIC) investigators and Halton Regional Police led to yesterday’s arrests. The OMVIC regulates the car dealer industry in Ontario.
The investigation was sparked by a complaint in late 2007 about a man who advertised a car for sale on the internet. When he met a prospective customer on Glen Erin Dr. in Mississauga, the man showed the car and indicated he had been the original owner. He provided a false Used Vehicle Information Package to the customer, which had been altered to conceal the car’s true history, police said.
The car being sold had been in a collision and “written-off” by the insurance company. The man had purchased the car from an auto-recycler.
Further investigation revealed that the man had sold vehicles in this manner some 15 times in the last nine months to buyers from across Ontario.
Andre Campbell and Sarnia resident Derby Lane are each facing 15 counts of being an unregistered car dealer. If convicted, the pair face fines of up to $10,000 and potential jail time.
In Ontario, all motor vehicle dealers and salespeople must be registered under the Motor Vehicle Dealers Act (MVDA) before engaging in the business of buying, selling or leasing vehicles. In the industry, unregistered individuals selling vehicles are known as “curbsiders” and are subject to prosecution.

__________________________________________________ 

[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]

The California Department of Insurance reported that Robert Andrew Nelson, 44, a resident of Cathedral City, California, was arrested on April 28 for allegedly defrauding his insurance company of $26,000. On October 28, 2007 Nelson filed a false police report and knowingly presented a fraudulent insurance claim. He reported that on October 27 he hosted a gathering of about a dozen quests. He claims that his guests were still at his home, when he went to sleep at about 8 p.m. Nelson claims that in the middle of the night someone stole his 2005 Expedition from his driveway and then returned it. According to Nelson he found the wrecked and damaged vehicle next morning.

After filing a claim with his insurance company Nelson received $26,000 as the replacement costs for the damaged vehicle. However, later a witness contacted the insurance company and informed that in the morning of October 28 Nelson’s vehicle struck another car.

The further investigation revealed Nelson was the driver of the vehicle at the time of the crash. Another witnessed informed that saw how Nelson walked around his vehicle after the crash. The third witness claimed that there were no other cars present, while Nelson claimed he hosted a gathering.

If convicted, Nelson could face a two to five year prison sentence and fine of up to $50,000.

__________________________________________________

[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]

Police’s vehicle fraud investigation unit has recently informed that Albert Walta was charged with felony and misdemeanor counts for selling vehicles he did not own, as well as for not paying taxes to the state Department of Transportation. Walta, 45, is the owner of a Scranton Motorcar Co., a used car dealership located at 626 W. Lackawanna Ave.

In early July the fraudulent practices of Walta came to an end when one of his customers, Joe Schappert, informed police that he bought a Chevrolet truck on consignment from the Scranton dealership. Walta gave him a check, which was later bounced, according to a criminal complaint filed in Lackawanna County Court. Later another customer of the dealership, Jonathan Pedrick, informed the police that Walta owned him over $16,000 for a 2004 Chevrolet Colorado pickup truck, which he traded in.

Walta claimed to the police that he was $70,000 “in the hole” on vehicles he sold, but has not paid off and was in the process of getting a $180,000 loan. He made sure he was going to repay Schappert and other customers who bought vehicles from his dealership.

Weeks of investigation showed that Walta failed state sales taxes on several vehicles he sold. On Thursday the Scranton dealership was closed. According to police the number of victims who bought vehicles from Walta is as many as 20 people.

The preliminary hearing of the case is scheduled in Lackawanna County Court on Wednesday; however the efforts to reach Walta are yet unsuccessful.

__________________________________________________

[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]

Yesterday, Michael Wolfe, a car dealer was found guilty under the federal Excise Act of seven counts related to a GST scheme. Wolfe, who had no previous criminal record, was sentenced to two years in jail and was taken into custody at B.C. Supreme Court for defrauding Ottawa of that amount in a long-running GST fraud. He was also fined $7 million. Later a bail was granted pending an appeal and Wolfe was released. The case of fraud involved two co-accused, charges against whom were stayed. One is the former owner of the Rags to Riches used-car lot, Sameer Mapara, who is sentenced for a first-degree murder. The other is Jay Grant, former fleet manager of Port Chev Olds.

Wolfe’s then-dealership, Port Chevrolet Oldsmobile in Port Coquitlam claimed millions of dollars in GST rebates on 1,600 vehicles imported by the dealership. According to prosecutor Les Mackoff, this is the largest GST fraud scheme ever prosecuted. However the defense attorney Kimberly Eldred believes there had been a larger one in Ontario.

Over a two-year period this group claimed GTS on vehicles that did not exist and earned about $8 million. Mapara claimed money for the imported cars for which he had Asian buyers. These cars were exempt from the GST, as they were exports.

According to Madame Justice Kirsti Gill Wolfe had the role of a facilitator and the one planning the scheme. Other than the benefit that went to Port ChevOlds, Wolfe had no other personal benefits. The court imposed the mandatory minimum fine of $7 million, pursuant to the Excise Tax Act and gave Wolfe time until August 2014 to make the payments. However Gill noted that its unlikely he will be able to repay the amount.

__________________________________________________

[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]

When you are buying a car or a truck and you are not paying cash for the full purchase price car dealer sells you two separate things - the vehicle itself and the means to pay for it. The customers almost always test drive the car, however, they don’t always test their financing. One of the things the car buyer should remember is that he/she is paying one amount for the car and another amount for the lease. Your car dealer probably gets separate profit from each of these items.

If you are not well informed you can become a victim of one of the tricks dealers use to force you into the deal. Car buyers should know that they can negotiate not only the cash price of the vehicle, but also the terms of financing. It’s a good idea to have the copy of the ad of the vehicle. Make your own notes on what was sad. Do you want to buy or lease the vehicle? Make this kind of decisions before going to the dealer. Take a calculator and count the total amount you are able to pay over a set period of time.

The next step is financing the vehicle and meeting with the finance manager of the dealership. The finance manager of the dealership may try to trick you by speaking about “win-win” situations. That’s when you should “test drive” the financing:

1. If your credit application is not accurate don’t sign it in blank.

2. Is the contract labeled Lease or Retail Installment Sales Contract (loan)?

3. Know exactly what is the cash price of the vehicle and how is that different from the total amount you will pay?

4. Find out the highest and lowest interest spread the bank is willing to offer.

5. If there is a rebate, make sure it is stated on the contract.

6. If you are purchasing add-ons and accessories, does the contract list these items? Are these items included in the price you negotiated to pay (“Itemization of Gross Capitalized Cost”)?

7. In case of trading in your old car, are you being given a credit or being charged a negative?

8. Make sure there are no mandatory arbitration clause in the contract.

9. Calculate the monthly payments you will be making, as well as the number of months. Calculate the total amount you are to pay and make sure you will be able to pay it.

10. Make sure the VIN on the contract is the same as the VIN on the car you actually test drove?

__________________________________________________

[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]

An auto lease fraud class action against Autowest Dodge and its parent Auto Nation was certified as a class action last week in San Francisco Superior Court. The class claims that the dealer failed to disclose the itemization of capitalized cost in the precise manner required by law. According to the class the dealer altered the lease agreement after the consumer signed it and left the dealership. This is an unauthorized alteration of documents.
Lease agreements are filled in at the dealership in several copies and most of the customers think that all of these copies of the lease agreements are identical. However, this is far from being a reality and the bank, as customers discovered later, got more information than they did. The basic problem is that most of the customers did not keep their lease agreements or cannot find them to compare the documents to those produced by the dealer and/or the bank. This is why we strongly advise car buyers to keep their lease agreements or any such documents, even after the lease has expired.

__________________________________________________

[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]

Previously, some dealers falsely told their customers that theft protection cost only, say, $3/month, when in reality the cost was $35/month. The dealer was hiding the true of the monthly payment on the loan. This fraudulent practice is very common among dealers and is known as loan packing.
Under the new Car Buyers Bill of Rights which was adopted in California in July, dealers cannot misrepresent the cost of debt cancellation insurance (GAP protection), service contracts, surface protection, and theft protection products, called after-market items.

__________________________________________________

[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]

Previously, wrecked, damaged ,flooded and poorly repaired vehicles were sometimes sold as “certified.” However, now a new California law prohibits the sale of used cars as certified if they had rolled back odometer reading, had been in a flood or had been previously wrecked (unless properly repaired). California car dealers can’t also sell certified cars “as is.”
Pursuant to the new law if cars previously damaged in a wreck or flood and not properly repaired and if the repairs did not make the car safe, then the car cannot be sold as “certified”. Also if the repairs of wrecked, damaged and flooded cars substantially impaired the use of the vehicle, it cannot be sold as certified.

__________________________________________________

[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]

When you are buying or leasing a car these days you will have to sign purchase or lease agreements. The car dealer will give you the exact copy of the documents you’ve signed. However, your dealer will probably be completing his own file – the Deal File, sometimes called the Deal Jacket.

What documents does the dealer keep in the Deal File? Most important the Deal File will contain information on the transaction and the profit maid by the dealer. The ‘recap sheet’ or sales summary, vehicle invoice, credit application, DMV information, repair history, inspections, finance papers, trade-in calculations, different documents relating to after-market items and other internal documents that reflect the transaction and documents of such kind are kept in dealer’s file. Customers don’t get to see most of these documents.

Why is this folder so important for the customer? If you suspect any dealer fraud it will probably show up here. Obviously car dealers are in business to make a profit. However, the Deal File can disclose dealer deception and common dealer scams. You can get information about extras and add-on products that have nothing to do with the vehicle itself, including but not limited to, a “theft protection” product that costs $37 and for which paid hundreds or even thousands more, or a service contract that costs the dealer only $250 and is charged to the buyer at $2,500. An experienced can help you disclose dealer fraud and get your money back.

In a case called Lewis v Robinson Ford Sales, Inc. the “Deal File” was used as an evidence to certify a class action for violation of the Rees Levering Act. After this action the court wanted to leave the case unpublished, however the customer attorneys offered the California Court of Appeals to publish the case clarifying the use of the Deal File as standard evidential document. 

__________________________________________________

[ To Learn more our services and areas of practice, please visit our website at

www.DealerFraud.org]