Published: August 7, 2021 5:07 pm
Tags: Local News, News
The owner of a Miami-Dade County car dealership was arrested for selling a vehicle after tampering with the odometer.
Used Car Dealer Sentenced to 60 Months in Prison for Odometer Tampering Scheme
|BROOKLYN, NY – Yesterday, in federal court in Brooklyn, Shmuel Gali was sentenced by United States District Judge Kiyo A. Matsumoto to 60 months’ imprisonment for his role in a long-running odometer tampering and money laundering scheme, and ordered to pay $3,936,000 in restitution. The defendant pleaded guilty in August 2020 to conspiracy to commit money laundering, conspiracy to commit odometer tampering, making false odometer statements and securities fraud.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, Brian M. Boynton, Acting Assistant Attorney General of the Justice Department’s Civil Division, and Thomas Fattorusso, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation (IRS-CI), announced the sentence.
“The sentence sends a warning that this Office will prosecute those who engage in odometer tampering and deliberately dupe consumers into unknowingly paying inflated prices for their motor vehicles,” stated Acting U.S. Attorney Kasulis. “With the defendant being sentenced to prison and ordered to pay restitution to his victims, he is being held to account for his greed in contriving this fraudulent scheme.”
“An automobile is one of the biggest purchases many consumers make,” stated Acting Assistant Attorney General Boynton. “Misrepresenting used car mileages defrauds buyers and hides important information concerning safety and reliability. The Department of Justice will continue to work with law enforcement partners to prosecute odometer fraud.”
“Automobile sales stand as one of the pillars of the American economy requiring transparency and integrity,” stated Acting IRS-CI Special Agent-in-Charge Fattorusso. “The financial expertise of IRS-CI was needed to uncover this criminal enterprise perpetuated by Shmuel Gali who received a just sentence relative to his criminal activity.”
Between 2006 and June 2011, Shmuel Gali, while conspiring with his brother Chaim, defrauded buyers of used motor vehicles by misrepresenting the mileage of approximately 690 vehicles that they sold. They used fictitious dealer names to purchase high mileage, used motor vehicles from a national vehicle leasing company, altered the odometers of the vehicles to reflect false, lower mileages, and then sold the vehicles at wholesale automobile auctions. On average, the odometers on the vehicles were rolled back by close to 70,000 miles. Consumers who purchased the vehicles at dealerships did not know the true mileage and paid inflated sales prices.
This matter was investigated by the U.S. Department of Transportation National Highway Traffic Safety Administration (NHTSA) Office of Odometer Fraud Investigation, and the Internal Revenue Service-Criminal Investigation.
Assistant United States Attorney Catherine M. Mirabile of the Eastern District of New York and Senior Litigation Counsel Linda I. Marks of the Civil Division’s Consumer Protection Branch prosecuted the case.
SHMUEL GALI (also known as “Sam Gali”)
E.D.N.Y. Docket No. 14-CR-652 (KAM)
ARLINGTON, Va. (7News) — Scroll to the bottom of this story for 7News On Your Side tips for how to protect yourself from buying a car with a rolled-back odometer.
Forty million times a year, Americans buy a used car. They rely on the accuracy of the odometer to help them measure wear and tear on the vehicle.
“I bought a 2010 convertible Mustang from a used car outlet that was also a reputable dealer here in Virginia Beach,” said Cheryl Mansfield. “Within barely two months my air conditioning went out, the transmission went out, and something happened with what we later found out was second gear.”
Cheryl Mansfield bought her car with 47,000 miles on it. Or so she thought. In reality, her car had closer to 147,000 miles.
The odometer had been rolled back.
“We had no idea that it had that many miles on it,” said Mansfield.
To find out just how easy it is to roll back the miles on a modern digital odometer, we went to see Josh Ingle, owner of Atlanta Speedometer in Georgia.
He says most consumers believe that a digital odometer can’t be rolled back.
“Depending on the manufacturer, it’s pretty simple to do if you’ve got the right equipment,” said Ingle. “The equipment used to be $5,000 to $10,000, and some of these things are $300 now. You don’t have to disassemble anything. You can plug it into the car, change your number, unplug it. And outside of finding some written records somewhere, there’s no trace.”
For Cheryl Mansfield, it meant the value of her $14,000 Mustang convertible dropped to $1,000.
And she’s not alone.
According to the National Highway Transportation Safety Administration, more than 450,000 vehicles a year are sold with odometers that have been rolled back, costing Americans more than a billion dollars.
It’s a federal crime that the agency is in overdrive to control.
“Odometer fraud is a covert crime,” said David Sparks, NHTSA’s Director of the Office of Odometer Fraud. “And so, it’s not like you come home and you know your house has been burglarized.”
Odometer fraud, you have to look for it to find it. And in my experience, said Sparks, wherever we look for it, we find it.
Beyond the loss of value, Sparks says high mileage vehicles can pose safety risks because owners assume the vehicle is in better condition than it actually is.
Josh Ingle showed us the hand-held device that makes it all so easy as he demonstrates a rollback. “I purchased this off of eBay,” he said. “It was a little bit less than $300. All you simply do is go down, choose your manufacturer. General Motors, this is a GMC Envoy. And there it is. We’ve got 203,000 miles. Let’s give it 600 miles.”
In less than 30 seconds, Ingle changed the mileage and in doing so, changed the value from $2,200 to more than $10,000.
According to Carfax, the vehicle history report service, the problem has been steadily getting worse.
In 2020 at least 30,800 odometers were rolled back in the Washington, D.C. region. That’s a 19% increase since 2019.
The federal government says it is prosecuting major cases, especially those involving criminal groups working on a large scale.
In victim Cheryl Mansfield’s case, she was one of 57 victims, and the perpetrator of her fraud, Lawson Basnight, went to prison. She receives small restitution checks but doubts they will ever cover her loss.
According to Ingle, some manufacturers do a better job than others of thwarting criminals.
“The Germans are doing a much better job at trying to defeat it,” said Ingle. “For instance, a Mercedes10 years ago will have the mileage stored essentially in three separate places. It’s not truly a mileage, but it’ll have a separate piece of code that has to check with another module to say, ‘Hey, I’m the correct part that was originally installed.’ But you can still change that information. It is more difficult.”
Ingles says manufacturers like Tesla make it very difficult for the odometer to be rolled back because the vehicles are connected and constantly keeping track of the car’s systems.
As for the future, experts say until all automakers produce connected vehicles or add redundancy systems to track accurate mileage, the numbers will keep rolling back.
TIPS ON HOW BEST PROTECT YOURSELF FROM BUYING A CAR WITH A ROLLED-BACK ODOMETER
1.Buy from reputable used car dealers
2.Get a pre-purchase inspection of the vehicle from a mechanic you trust. Tell him or her that you are particularly interested in seeing if there are any indications the mileage may have been rolled back.
While you might be tempted to skip this step and save the money, experts told us this is really the only way you will get an indication that the mileage may have been rolled back. How?
For starters, there will be wear and tear on the vehicle that isn’t consistent with the mileage. Some of this may be visible, like armrests, steering wheels, and floor mats (although these things can be pretty easily changed out). More important is what the mechanic will notice in the guts of the vehicle. Is there more wear on parts than what he or she would normally see with a vehicle of that make, model, and year with that amount of mileage?
3.Get a vehicle history report – but remember they are not fool-proof. Vehicle history reports rely on information being reported. All states do not have the same reporting requirements. Vehicle history reports can show an inconsistency in mileage and may even reveal it going up and down.
4.Remember: Vehicles 10 years or older are not subject to Federal Odometer Disclosure laws, meaning the seller does not have to sign documentation attesting to the accuracy of the vehicle’s mileage.
5.Ask for the documented service history of the vehicle. Typically, mileage is recorded when the vehicle is serviced. This provides a helpful glimpse into the vehicle’s history and mileage against which you can measure the existing mileage displayed in the car or truck.
SAN FRANCISCO – A criminal complaint was unsealed today in federal court charging Seymur Khalilov, Ramil Heydarov, and Orkhan Aliyev with conspiracy to commit wire fraud, announced Acting United States Attorney Stephanie M. Hinds, Homeland Security Investigations Special Agent in Charge Tatum King, and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.
According to the complaint, between 2016 and the present, Khalilov, 32; Heydarov, 31; and Aliyev, 31, all of San Jose, conspired to purchase high-mileage vehicles, roll back the odometers, and falsify documentation to make the vehicles appear newer. The co-conspirators then allegedly sold the vehicles on Craigslist at significant profits. The complaint alleges defendants fraudulently sold at least a dozen vehicles in this way for a total of at least $300,000. In addition, the complaint states that the number of cars and amount of money at issue will likely change as the ongoing investigation into the scope and extent of the scheme continues.
The complaint describes the multiple steps taken by the coconspirators to defraud purchasers of the cars. For example, the complaint describes how defendants purchased high-mileage or old-model vehicles and then, with the assistance of other co-conspirators, rolled back the odometers of the vehicles. Further, the defendants altered documentation related to the vehicles, including titles and registrations, to reflect the lower mileage amount and other fraudulent information. The complaint alleges the fraudulent alterations were made with the goal of increasing the prospective sale price of the vehicles. In addition, when selling the vehicles, the defendants portrayed themselves as the prior owners of the vehicles, including by altering California identification cards, so that the defendants’ true names would not appear in the vehicles’ transaction history.
Each defendant is charged with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349. The conspiracy charge carries a maximum statutory penalty of up to 20 years in prison and a $250,000 fine. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing imposition of a sentence, 18 U.S.C. § 3553.
The charges contained in the criminal complaint are mere allegations. As in any criminal case, the defendants are presumed innocent unless and until proven guilty in a court of law.
The defendants each made their initial federal court appearance earlier today before U.S. Magistrate Judge Thomas S. Hixson. Aliyev’s next court date is May 6, 2021, and Khalilov and Heydarov’s next court date is May 7, 2021.
Assistant U.S. Attorney Ankur Shingal is prosecuting the case with the assistance of Marina Ponomarchuk and Soana Katoa. The prosecution is the result of an investigation by Homeland Security Investigations and the Federal Bureau of Investigation with assistance from the California Department of Motor Vehicles Investigations Division in Vallejo, the San Ramon Police Department, and the National Highway Transportation Safety Administration Office of Odometer Fraud Investigations.
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Wednesday, April 28, 2021
Two Texas Men Plead Guilty in Odometer Fraud Scheme
Two Texas men pleaded guilty today, to for their roles in an odometer tampering scheme.
According to court documents, Nepthali Luna, 61, of San Antonio, pleaded guilty to one count of conspiracy to make false odometer statements and commit securities fraud, while his son, Devon Luna, 36, also of San Antonio, pleaded guilty to two counts of making false odometer statements and two counts of securities fraud.
As part of their plea agreements, the defendants admitted that between 2016 and 2018, they engaged in a scheme to sell high-mileage, used vehicles with false, low mileage readings entered on the vehicles’ odometers, titles and odometer disclosure statements. According to court filings, Devon Luna purchased high-mileage vehicles through his company, Pioneer Auto Finance. The defendants then caused the vehicles’ odometers and titles to reflect false, low mileages, and they sold the vehicles for inflated prices to unwitting consumers.
“The Department of Justice remains steadfast in its commitment to protect consumers against deceptive practices, including odometer fraud schemes,” said Acting Assistant Attorney General Brian Boynton of the Justice Department’s Civil Division. “Consumers are entitled to truthful information about the vehicles they purchase, including the amount of miles that a used vehicle has been driven.”
In pleading guilty, the Lunas admitted that they caused at least 225 vehicles to be sold with “rolled back” odometers. The defendants admitted that the scheme resulted in consumer losses of more than $550,000.
Both defendants are scheduled to be sentenced on Aug. 3, 2021. Nepthali Luna faces a maximum sentence of five years in prison on the conspiracy charge. Devon Luna faces a maximum penalty of 10 years in prison on the securities fraud charges and three years on the false odometer statement charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The National Highway Traffic Safety Administration Office of Odometer Fraud Investigation (NHTSA), assisted by the San Antonio Police Department, investigated the case.
Trial Attorney Arturo DeCastro of the Civil Division’s Consumer Protection Branch is prosecuting the case with assistance from the U.S. Attorney’s Office for the Western District of Texas.
NHTSA estimates that odometer fraud in the United States results in consumer losses of more than $1 billion annually. Individuals with information relating to odometer tampering should call NHTSA’s odometer fraud hotline at (800) 424-9393 or (202) 366-4761. More information on odometer fraud is available on the NHTSA website at https://www.nhtsa.gov/odometer-fraud and tips on detecting and avoiding odometer fraud are available at www.nhtsa.gov/staticfiles/nvs/pdf/811284.pdf.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Western District of Texas, visit https://www.justice.gov/usao-wdtx.
Press Release Number:
Updated April 28, 202
Former Missouri Resident Admits Role in Odometer Roll Back Scheme
SUSAN L. CUNNINGHAM, 48, of Monroe, Connecticut, formerly of Blue Springs, Missouri, pleaded guilty today before U.S. District Judge Michael P. Shea to one count of wire fraud stemming from the sale of numerous used vehicles with altered odometers.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the court proceeding occurred via videoconference.
According to court documents and statements made in court, between approximately August 2014 and October 2015, Cunningham and Wilfredo J. Albanese, while residing in Missouri, sold more than 40 vehicles with altered odometers to unsuspecting purchasers. As part of the scheme, Cunningham and Albanese purchased high-mileage used vehicles and then used a variety of means to alter or reduce the mileage shown on the vehicles’ odometers. They also concealed mechanical issues with those vehicles by removing “check engine” lights from the instrument panels, providing buyers with phony maintenance receipts and vehicle history reports, and concealing rust and other damage to the vehicle through paint or other means. Cunningham and Albanese obtained Certificates of Title for the used vehicles they purchased. Under the assumed identities of the persons listed on those Certificates of Title, they advertised and sold the vehicles to customers on Craigslist.org. Most of the victim purchasers resided in Missouri.
On May 22, 2019, a grand jury in the Western District of Missouri returned a 20-count indictment charging Cunningham and Albanese with offenses related to this scheme. The case was subsequently transferred from the Western District of Missouri to the District of Connecticut for further prosecution.
Wire fraud carries a maximum term of imprisonment of 20 years. Judge Shea scheduled sentencing for April 30, 2021. Cunningham is released pending sentencing.
On July 15, 2020, Albanese pleaded guilty to one count of wire fraud and one count of aggravated identity theft. On October 9, 2020, he was sentenced to 42 months of imprisonment and ordered to pay $51,600 in restitution.
This matter has been investigated by the U.S. Department of Transportation, National Highway Traffic Safety Administration (NHTSA), Office of Odometer Fraud Investigation, and the Missouri State Highway Patrol, with the assistance of the U.S. Marshals Service. The case is being prosecuted by Assistant U.S. Attorney Natasha Freismuth of the District of Connecticut, and Assistant U.S. Attorney Brian Casey of the Western District of Missouri.
NHTSA estimates that odometer fraud in the U.S. results in consumer losses of more than $1 billion annually. Individuals with information relating to odometer tampering should call NHTSA’s odometer fraud hotline at (888) 327-4236 or (202) 366-4761. More information on odometer fraud is available on the NHTSA website at https://www.nhtsa.gov/odometer-fraud.
December 22, 2020
NHTSA’s Changes to Odometer Disclosure Requirements Starting January 1, 2021
WASHINGTON – The U.S. Department of Transportation’s National Highway Traffic Safety Administration is reminding consumers that, starting January 1, 2021, odometer disclosures will be required for every transfer of ownership for the first 20 years, beginning with Model Year 2011 vehicles. Model Year 2010 and older vehicles will continue to be subject to the previous 10-year disclosure requirements and thus are exempt from extended Federal odometer disclosure requirements.
The U.S. fleet of vehicles is, on average, older than ever, and NHTSA finalized this rule late last year to address an increase in odometer fraud involving older vehicles.
Model Year 2011 or newer vehicles will only be exempt from the odometer rules after 20 years. To comply with Federal law, anyone transferring ownership of a Model Year 2011 or newer vehicle will be required to provide an odometer disclosure to the new owner.
Model Year 2010 and older vehicles will continue to be exempt from federal odometer disclosure requirements. Sellers of Model Year 2011 vehicles must continue to disclose odometer readings until 2031.
By Pat Reavy@DNewsCrimeTeam Aug 6, 2020, 10:09am MDT
SALT LAKE CITY — A man who has several pending cases on charges of changing the odometers of vehicles and selling them has been charged yet again.
Steve Stone, 25, of Lehi, was charged Thursday in 3rd District Court with fraudulently changing an odometer, a third-degree felony.
On July 11, 2019, a man met with Stone to buy a vehicle he found online, according to charging documents. After purchasing the vehicle, the victim “checked the Carfax history and discovered a mileage discrepancy of over 90,000 miles,” the charges state.
The victim then found an article that originally appeared in the Deseret News that talked about Stone being accused of doing the same thing, and recognized Stone as the person who sold him the vehicle, according to charging documents.
For Stone, it’s the latest in a series of investigations involving odometer tampering.
He and two family members were charged in April 2019 with five counts of communications fraud and five counts of odometer violation. A pretrial conference for that case was scheduled for Aug. 24.
Stone was charged with similar crimes in April, July and October of 2018, and July 2017. A preliminary hearing regarding all of his pending cases was scheduled for Aug. 24.
Man pleads guilty in federal auto fraud case
By Tara Gray
Published: Sep. 2, 2020 at 6:25 PM EDT
DAVENPORT, Iowa (KWQC) – One of six men charged in an auto fraud scheme involving a now-closed Moline used vehicle business has pleaded guilty in federal court.
Court records show Kendric Vendrell McCray pleaded guilty Tuesday to conspiracy to commit wire fraud in U.S. District Court, Davenport. The charge carries a sentence of up to 20 years in prison, according to the written plea agreement.
He will be sentenced Jan. 14.
McCray and co-defendants Bradley Shane McCorkle, Isaac Bell, Derek Martinez, Keithen Deone McCorkle, and Nicholas T. McFarlin were indicted in November.
According to the plea agreement in McCray’s case:
4th Avenue Auto Sales, a used motor vehicle business at 4130 4th Avenue, Moline, was owned and operated by Bradly McCorkle and Bell.
The two men, through the business, bought cars from local auto dealers and auto auctions and accepted vehicle trade-ins.
McCray was acquainted with Bradley McCorkle for many years and, at times between 2012 and 2018, he worked for the business and performed odd jobs, such as mowing and driving cars for the business.
Generally, he was paid in cash by Bradley McCorkle.
Sometime between 2013 and 2018 or earlier, McCray, Bradley McCorkle, Bell, and others conspired to defraud the state of Iowa and purchasers of used motor vehicles by materially false and fraudulent pretenses, representations and promises, and by the intentional concealment of material facts.
McCray helped to conceal the price paid for used motor vehicles, the identity of the true owner and seller of used motor vehicles, and concealed the vehicle history of the used motor vehicles.
He also helped to conceal the actual mileage on more than 150 used motor vehicles, as well as the vehicles’ operating conditions and sale price.
McCray acted as a straw buyer of used vehicle for 4th Avenue and assisted in having his name used on sale documents, applications for vehicle titles, and titles of dozens of used motor vehicles.
He as strictly as “nominee buyer” for 4th Avenue, Bradley McCorkle, Bell, and sometimes Keithen McCorkle and McFarlin.
McCray was paid around $30 in cash by Bradley McCorkle for each vehicle McCray fraudulently titled in his name.
By having vehicles put in his name and applying for vehicle titles in Davenport, McCray facilitated the “washing” of the title histories, which included removing the mileage figure that appeared on the titles.
He did not reset or alter the odometers of the motor vehicles but made false and fraudulent representations when he applied for titles and engaged in “phantom, false, and illusory” transactions to that it appeared he bought the vehicles when he had not.
McCray further concealed the amount of money involved in the vehicle transactions including the prices paid for the vehicles.
McCray is not a mechanic and had no tools or other means to repair a motor vehicle. “Bills of Sale” produced by 4th Avenue in connection with motor vehicle transactions purportedly between 4th Avenue and McCray contained notations that some or all of these sales were “mechanics specials.”
These were false representations by McCorkle that allowed the vehicles to appear to have a lower value when applying for the title, thus reducing taxes and fees.
McCray was aware that the vehicles placed in his name were changing hands through 4th Avenue and being sold by third parties, including McFarlin, Keithen McCorkle, and others.
He also was aware of the vehicle he purportedly purchased as a straw buyer was being advertised for sale online, including through postings on Craigslist.
Around Dec. 5, 2014, 4th Avenue purchased a 2008 Dodge Caliber from Central Petroleum Company in Blue Grass. The vehicle at the time of purchase had an odometer reading of 177,700 miles.
Ten days later, 4th Avenue assigned the title, which listed an odometer reading of 45,584 miles, to McCray. He then reassigned it back to 4th Avenue with 45,584 miles.
Around Dec. 23, 2014, the vehicle was reassigned from 4th Avenue to an unwitting buyer showing that it had 45,708 miles on it.
McCray executed the false title application, claiming to own the vehicle, but he did not pay 4th Avenue and never took possession of it, according to the plea agreement.
Bradley McCorkle and Bell are each charged with conspiracy to commit wire fraud, six counts of wire fraud, 10 counts of tampering with a motor vehicle odometer, and securities fraud involving a motor vehicle.
Keithen McCorkle, McFarlin, and Martinez are each charged with conspiracy to commit wire fraud and six counts of wire fraud.
A trial is scheduled Sept. 29.
Copyright 2020 KWQC. All rights reserved.
Stolen cars were sold to unsuspecting buyers, police say
By Scott Gordon • Published June 11, 2020 • Updated on June 11, 2020 at 10:55 pm
Auto theft investigators say they’ve busted a “high-tech” ring of North Texas car thieves who hacked into newer-model Nissans, made their own electronic keys, and sold the cars to unsuspecting buyers.
“It can happen so fast,” said Commander Brian Sudan of the Tarrant Regional Auto Crimes Task Force. “We’ve seen thieves who can hack these cars in less than three minutes.”
The ring stole more than $1.2 million worth of cars from the streets of North Texas, some of them virtually brand new, police said.
Sudan didn’t want to give too many details on how the thieves were able to drive off in new cars but said they worked with used car dealers to get clean titles.
They do it by replacing the vehicle identification numbers so nobody knows it’s stolen, he said.
The number on a stolen 2020 Altima, for example, really belonged to another Altima which was found on a salvage lot to be sold for scrap.
Police have identified up to 62 stolen vehicles but suspect there are more. Only a small number have been recovered, Sudan said.
Gustavo Torres, 33, the alleged ringleader of the operation, was arrested.
Investigators searched three used car dealers in Dallas who took the stolen cars and sold them to unsuspecting buyers.
“They have no clue they are buying a stolen car,” Sudan said.
So two people claim to own the same car.
“We run into some very sticky situations,” he said. “Somebody bought this car, paid a lot of money for it. And then there’s a person who lost this car and lost a lot of money.”
Sudan said the courts will have to decide the rightful owners.
He said there is little owners can do to protect their cars from getting hacked and stolen but did suggest locking doors, parking in well-lit areas and in a garage if possible.
As for used-car buyers, Sudan suggested researching the title and if it shows the car has been salvaged, it may indicate a problem.
While this car theft ring targeted Nissans, he said other thieves have learned how to hack into other brands such as General Motors.