Thread: Stockton Dealerships Sell Cars to Unlicensed Drivers

http://www.sacunion.com/pages/california/articles/5369/

Stockton Dealerships Sell Cars to Unlicensed Drivers
The Associated Press
Published: July 11, 2005 05:15
STOCKTON, Calif.â€â€

Deport Illegals and GET THEM OFF THE ROADS!!

Close the Borders and KEEP THEM OFF THE ROADS!!

Veeeeery Simple!!

Problem Solved.

Judy,
You forgot to mention jailing those who are providing the illegals with autos without insurance and a proper drivers license.

I wonder how many time he will be sued when one of his cars sold to Illegals without insurance gets in a wreck. I would definately pursue him in court.

[quote]STOCKTON, Calif.â€â€

Defens--some of the manufacturers provides financing through the dealer so they can make whatever lending deal they want in all probability to accommodate this new "illegal market". They probably drew up new "forms" and everything.

Grim. Very Grim.

This story just has the smell of illegal immigrants to it. Thought is was appropriate to add it to this earlier topic. I wonder how much of this loan fraud is going on across the country to possibly sell cars to illegals?

www.charlotte.com

Posted on Thu, Jul. 28, 2005



Car dealer is accused of falsifying loans
Owner, 30 employees are charged with conspiracy totaling up to $15 million
GARY L. WRIGHT AND ANDREW SHAIN
Staff Writers

A Charlotte-area car dealer and 30 of his employees have been indicted on charges of conspiring to falsify documents to qualify buyers for car loans totaling up to $15 million.

James Keating is accused in the federal indictment, unsealed Wednesday, of pressuring employees at Five Star, South Boulevard and Monroe auto malls to do "whatever was necessary" to sell cars.

Keating's dealerships, which are now closed, processed $6 million to $15 million in bogus loan applications over six years, the indictment said. Authorities said the fraud hurt financial institutions that thought they were lending money to good credit risks. Some buyers lost their cars because they couldn't afford the monthly payments.

One dealership's finance manager was known as "Bog Doctor" because he would often doctor loan applications with bogus information in order to obtain financing for the customer, the indictment alleges.

A sales manager was known as "the closer." He is accused of being responsible for persuading customers to participate in the fraudulent financing schemes and coaching them how to respond to inquires from lending institutions.

Another finance manager is accused of creating fraudulent pay stubs for fictitious companies, such as Computer Network Associates and JKE Enterprises.

The 20-page indictment outlines more than 100 alleged acts of fraud and charges Keating and his employees with conspiring to commit mail fraud, wire fraud and bank fraud. If convicted, they each face up to 30 years in prison.

The indictment was the result of an 18-month FBI investigation called Operation Falling Star.

"Fraud permeated each of the Keating dealerships," the indictment alleges. Keating could not be reached Wednesday.

Among the fraudulent tactics used, according to the indictment: falsifying documents; concealing purchasers' bad credit history by using records of other people; creating fictitious sources and amounts of income as well as employment; lying to customers; and forging signatures when customers refused to participate in the fraud.

In one instance, the indictment says, a Keating employee inflated a buyer's annual income from $10,000 to over $50,000.

Falsifying loan documents is one of car dealers' larger problems in recent years, said Laura McCleery, counsel for auto safety at corporate watchdog Public Citizen.

In the past year, dealers or their employees have been convicted in Connecticut, indicted in Colorado, arrested in New York and sued in Oregon over these types of schemes, according to published reports. Boosting a customer's income on a credit application was part of a "Dateline NBC" investigation of Charlotte-based Sonic Automotive dealerships in late 2003. Sonic was never charged but disciplined employees and changed training after the report.

"It happens more often than anyone wants to admit," McCleery said.

Leaders in the N.C. Auto Dealers Association said they believe such fraud is rare. The association stepped up education efforts on ethical financial practices last year, holding two seminars a year on the topic instead of one and inviting lawyers to answer questions, said Cyndie Mynatt, a Concord auto dealer and president of the state group.

Dealers face more challenges, including stiffer competition and smaller profits as well as more customers who have poor credit.

The FBI raided Keating's dealerships last year, taking computers and files. This month, the FBI removed boxes of paperwork from the Harrelson Ford dealership on South Boulevard. A source said the investigation involves possible fraudulent car loans.

The FBI is continuing its investigation into allegations of fraud at other dealerships in the Charlotte area.

Keating is accused of participating directly in the fraud by creating false loan documents that inflated the income of two customers. He "encouraged the use of fraud to accomplish a sale in lieu of letting a customer leave ... without purchasing a vehicle," the indictment said.

The indictment alleges that Robert Stamper -- identified as a dealership general manager -- could create false pay stubs, Social Security benefits letters and tax returns.

Stamper, who could not be reached for comment, is accused of saving proof of income documents used for customers from previous car loans, scanning them into his computer and altering them to meet the needs of a specific customer.

"Robert Stamper began selling these false proof of income documents to other finance managers, charging as little as $25 for a false pay stub and as much as $100 for two years' worth of false tax returns," the indictment alleges.

I'm still wondering how many of these falsified loans went to illegals.

http://www.charlotte.com/mld/charlotte/ ... 298576.htm

Posted on Thu, Aug. 04, 2005



Car loans falsified, says FBI affidavit
Investigation targets workers at Charlotte dealership
GARY L. WRIGHT AND ANDREW SHAIN
Staff Writers

Employees working for longtime Charlotte car dealer Louis F. Harrelson have been falsifying loans for more than five years, court documents unsealed Wednesday alleged.

Harrelson employees are accused of creating false employment and tax documents and bogus down payment checks to qualify buyers with poor credit for loans, an FBI search warrant affidavit said. Employees also allegedly inflated incomes of customers and loan values of cars.

The FBI said a salesman had his daughter pose as an employer for buyers, a general manager taught employees how to create fake driver's licenses, and a finance manager sent falsified contracts to banks while keeping the real contracts.

Harrelson, a familiar fixture on Charlotte television and radio who has owned dealerships for 35 years, said Wednesday he was unaware of wrongdoing by employees until after the FBI seized documents at his dealerships last month.

"I tell my people, `Just run it straight,' " he said.

Harrelson's company has fired seven employees after an internal investigation.

The FBI affidavit named 15 current and former Harrelson employees. Also included was an employee at a Charlotte tax firm accused of creating false documents used by employees.

An FBI informant said Harrelson was told by managers about fraudulent documents found in a desk and computer linked to three employees, according to the affidavit.

Harrelson sent two of the employees to another of his dealerships and re-hired the third, who had stopped working there, the affidavit said. After some lenders refused to work with the re-hired employee, Harrelson is accused of going to "some lengths" to remove her name from many deals she helped broker, the affidavit said.

Harrelson told the Observer Wednesday that managers never informed him of the false documents and that he never tried to hide an employee's ties to car loans. He said none of three workers tied to the alleged bogus documents work for him now.

"If (informants) said I was told something or done something, they're lying," Harrelson said. "If I was told about this, I would have fired them. ... If I was doing something wrong, why didn't (FBI agents) come talk to me? I put on TV: `See me personally.' "

Harrelson, 76, said he leaves day-to-day responsibilities at his six dealerships to his general managers. He checks with them daily to discuss sales and lets dealership bosses handle the company's 400 employees.

"I can't keep up with these people," he said. "It's impossible."

The FBI said in the affidavit that its investigation showed many Harrelson employees were committing fraud. Among the allegations:

• A finance manager created pay stubs for her customers "by cutting and pasting new numbers onto a customer's existing pay stub," the affidavit said. "This false pay stub would then be copied and submitted to the lender as a proof of income."

• A salesman created false down payment checks for customers with fictitious account numbers and authentic routing numbers from checks received in his "ticket scalping" business, the affidavit alleged.

• Harrelson Ford employees provided military rebates to customers who were never in the armed services, according to the affidavit.

FBI agents posing as customers visited Harrelson dealerships in May and June. When one undercover agent worried out loud that his income of no more than $300 a week was too little to qualify for a loan, the salesman reportedly replied: "We can embellish it a bit." The agent's income on the loan application was listed as $3,800 a month, the affidavit said.

The FBI isn't looking only at Harrelson's dealerships.

Last week, a federal grand jury indicted Charlotte-area car dealer James Keating and 30 employees on charges of conspiring to falsify documents to qualify buyers for car loans totaling up to $15 million. Keating owned the Five Star, South Boulevard and Monroe auto malls.

On Tuesday, Harrelson Ford Inc. announced it had fired seven employees after an internal investigation alleged they faked pay stubs and tax returns and inflated income to qualify buyers with poor credit for loans.

The company's internal investigation was launched after FBI agents searched and seized records from three Harrelson dealerships on South Boulevard: Harrelson Ford, Harrelson Hyundai and Harrelson Suzuki.

Harrelson's attorney, Peter Anderson, said Tuesday none of those fired were managers and that upper management had no knowledge of their alleged activities. The affidavit describes some employees accused in the alleged fraud as managers. But Harrelson said Wednesday most were lower-level workers.

"We're pleased that Mr. Harrelson has agreed to cooperate with the investigation," said Mark Johnson, who heads the FBI's white-collar crime squad in Charlotte.

Johnson wouldn't comment on the results of the FBI search. No one has been charged.

While the affidavit alleges some Harrelson customers were coached in how to respond to lenders, they are not the main target of the FBI investigation, Johnson said.

Harrelson said he does not know why the FBI chose to investigate his dealerships.

None of the 86 consumer complaints filed during the past three years with the Better Business Bureau against Harrelson dealerships involved fraudulent loans, BBB President Tom Bartholomy said.

If car loan documents are falsified, customers can be burdened with loans they can't afford, and lenders lose money when borrowers stop repaying. Harrelson has promised to reimburse lenders.

Johnson said the FBI is continuing its probe into fraudulent auto loans. He declined to say if other dealers are being investigated. Harrelson said he believes the FBI could find forged loan documents at other Charlotte-area dealerships because employees move from dealer to dealer.

Bill Musgrave, president of the Greater Charlotte Automobile Dealers Association, disagreed: "This is the exception."

The availability of loans to people with poor credit has increased sharply during the past five years -- along with the potential for abuse, Musgrave said.

"When there's an opportunity for people to do something wrong, some are just going to do it," he said.

Bill Musgrave, president of the Greater Charlotte Automobile Dealers Association, disagreed: "This is the exception."

Hmmmm. I don't think so. And Brian, you wondered how many of these were loans made to illegals? I suspect a great many. There is some method by which these "enslaved workers" are whizzing around in BRAND NEW BRIGHT RED FORD PICKUPS...the BIG ONES!!

Good work by the FBI, eh?

Where have they been all this time?

Glad to see them on the "case".



Could this be another sign that the "tide is turning"?

I agree there were probably many illegals getting loans but the article never discloses that piece of information. I'm hoping someone will reveal it in the future. I have a feeling this type of fraud is being committed at a lot of different dealerships to get illegals into automobiles. Hopefully many more of these crooks will get busted.