These are the stories of dealer fraud victims of former Whitehall Discovery Ford owner/manager Tony Nielsen, sentenced to jail for felony fraud.
Nielsen has confessed to defrauding hundreds of customers of more than $300,000 through an extended warranty scam and failure to pay off loans on traded-in cars. He pleaded no contest last month to three counts of larceny by conversion of more than $1,000 but less than $20,000.
Prosecutors said more charges would not have lengthened his sentence.
Judge ordered Nielsen to jail for 10 months, with eligibility for work release — but only for 48 hours a week, if he gets one. The judge vetoed a defense request that Nielsen, 43, now of Wayland, either get extra time off jail to work at an existing job in that area, 100 miles from here; or continue his current trade of flying around the country conducting “tent sales” for days at a time.
Judge also placed Nielsen on probation for 30 months, ordered him to perform 100 hours of community service in the County, and ordered him to pay full restitution to his victims.
Much of that has already been paid — more than $300,000 worth, authorities say. Judge also ordered Nielsen to pay another $78,052 to Universal Warranty, the insurance company that covered the extended warranties. Additional restitution to other victims will be determined later.
Authorities say Nielsen began keeping customers’ payments for extended warranties without buying the policies, and failing to pay off the outstanding loans on traded-in cars, so he could pay his own creditors’ bills when his business began to falter about three years ago.
The dealership also failed to forward customers’ payments for “gap insurance” to cover the difference between the value of a car totaled in an accident and the amount owed on a new car.
At the time of the frauds, from April 2005 through August 2006, Nielsen owned and operated Discovery Ford at 3001 W. Holton-Whitehall in Whitehall Township. The dealership has had a new owner since November 2006 and a new name, Whitehall Ford. Nielsen has no connection to the current dealership.
The criminal case was the outcome of a complicated, yearlong investigation by the state police that included repeated interviews with more than 400 people. Investigators also painstakingly scrutinized reams of financial documents.
The investigation began in August 2006 after police were contacted by a customer who had taken a vehicle to another Ford dealer for service and learned the car never was registered for an extended warranty. Investigators quickly found Nielsen’s dealership had failed to forward money paid by customers for the warranties. In many cases, the payment was $2,000.
Nielsen’s victims say his criminal actions ruined their credit ratings and, at least for a time, their lives.
The consequences for some included garnisheed paychecks, daily calls from creditors and the inability to borrow money — all because they were innocent victims of a crime.
“He robbed us of our credit-worthiness,” said victim Cindy Guerrero. “He robbed us of our life … Our creditors, they’re hounding us all the time.”
Guerrero and fellow victim Mary Beth McDonald spoke to Judge in court before sentencing. Both bought vehicles from Discovery Ford; both traded in their old vehicles to the dealership; and both — like some two dozen other customers — were burned when Nielsen failed to pay off the liens on the old cars.
Like other victims of the crooked dealer, Guerrero and McDonald found their lives turned upside down soon after buying vehicles from him.
McDonald told a financial and emotional horror story in court.
The young Fremont resident, now 27, was five months pregnant with her fourth child when she bought a minivan from Discovery Ford in April 2006 because she needed more car seats for her growing family.
Within two weeks, she got a letter from the credit union that had the lien on the smaller car she had traded in: She was past due on a payment for a car she no longer owned.
“So I called Discovery Ford,” she said. “They said, ‘The check’s in the mail.’”
It wasn’t.
After considerable back-and-forth, none of which got the loan paid or satisfied the credit union, she and her husband, Nick — both names were on the old loan — were sued. Eventually the credit union won a default judgment because McDonald missed a court date — she says she wasn’t notified of the hearing — and by December 2006 her paychecks were being garnisheed. She hired a lawyer. It didn’t solve the problem but added a new $880 bill.
In the meantime, she got a surprise. On the very day in August 2006 that she entered the hospital for the birth of her son, Travis, she heard the news: Discovery Ford was being criminally investigated. Soon she was telling her story to investigators.
But it didn’t ease the McDonalds’ plight.
Because of the judgment, their credit rating was ruined. Recently they submitted to credit agencies a letter from a County Prosecutor, provided to all of Nielsen’s victims, attesting that they were victims of a crime.
Mary Beth McDonald hopes that succeeds, “so that I’ll be able to apply for loans.”
McDonald, Guerrero and other individual victims also will be awarded restitution after the correct amount is decided. Hicks ordered that determination to be made by Feb. 15.
In court, Senior Assistant Prosecutor argued passionately for the toughest possible sentence — in this case, a year in jail, which would have been above sentencing guidelines.
“These innocent individuals are still fighting with their credit reports, and they didn’t do anything wrong,” Hilson said. “These folks’ trusts were violated. They got screwed.”
Nielsen declined the opportunity to speak. Defense attorney argued for leniency, given the ex-dealer’s ongoing efforts to pay complete restitution once he was caught.
The judge said restitution “doesn’t wash away the crime.” Hicks said when Nielsen’s business faced tough times, the car dealer responded by turning to criminal acts that victimized others.
“You exported the hurt to people who are less able to bear it,” Judge said.
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