Tag Archive | "odometer fraud"

Georgia Dealer, State Employee Arrested for Odometer Fraud

WASHINGTON — A used car dealer and a state employee were charged in a 25-count indictment with securities fraud, making false odometer statements, and conspiracy to commit these offenses, according to a release by the Department of Justice.

Rojen Burnett, the owner and operator of Lifestyle Auto Broker LLC, and Amber McLaughlin, a customer service specialist for the Motor Vehicle Department of the Georgia Department of Revenue, were arrested last week. They now face up to 10 years in prison if convicted on the most serious of charges, according to the indictment.

“Individuals who buy and sell used vehicles cannot alter odometers and the associated paperwork to increase their value,” said Principal Deputy Assistant Attorney General Benjamin J. Mizer, head of the Justice Department’s Civil Division. “Consumers who purchased used vehicles need accurate mileage information to assess the value and safety of a potential vehicle purchase. We take seriously our obligation to prosecute those who violate these statues and prey upon unsuspecting consumers.”

Burnett and McLaughlin devised a scheme where they would purchase high-mileage, used motor vehicles from auctions in Maryland and Virginia and then alter the odometers in the vehicles to reflect lower mileage numbers, according to the indictment. Burnett was charged with tampering with the odometers, while McLaughlin allegedly provided newly issued, clean Georgia titles that matched the tampered odometer numbers.

With new, clean titles in tow, Burnett would sell the vehicles to other dealers at auction, according to the indictment. This went on from as early as February 2012 through at least May 2013, the indictment alleges.

The case was investigated by the Auto Crimes Title Fraud Unit of the Georgia Department of Revenue and the U.S. Department of Transportation, National Highway Safety Administration. Trial Attorneys Kerala Thie Cowart and David Sullivan of the Civil Division’s consumer Protection Branch are prosecuting.

Posted in Auto Industry NewsComments Off on Georgia Dealer, State Employee Arrested for Odometer Fraud

Transportation Bill Paves the Way Toward Digital Vehicle Transactions

WASHINGTON, D.C. — Billed as a down payment for building a 21st century transportation system, the recently passed Fixing America’s Surface Transportation Act, or Fast Act, contains a provision that clears a key hurdle in the industry’s drive toward a fully digital transaction.

Inside the 1,300-page bill President Obama signed into law on Dec. 4 is language that allows states to begin digitizing odometer disclosures, notices and related materials. The language’s inclusion also means states will no longer have to apply to begin accepting electronic signatures on odometer disclosures — a cumbersome process that took years to complete and often didn’t result in approvals.

The law, which will also direct $305 billion in funding toward transportation projects over the next five years, places the responsibility on states to implement appropriate data authentication and security measures.  John Brueggeman, an executive with the Motor Vehicle Software Corp. — a Southern California-based firm founded in 2005 to help states modernize the vehicle registration process — said the e-odometer language removes a key deterrent for states looking to go paperless.

“The paper registration process is outdated,” Brueggeman said. “We live in a digital economy and this new law will not only allow for a faster and more convenient process for automobile buyers, it will also increase accuracy and efficiency at state motor vehicle departments across the county.”

F&I managers should expect immediate benefits once states move to electronic signatures for odometer disclosures, Brueggeman said. They will no longer have to mail handwritten disclosures to the DMV, nor wait for the DMV to receive and manually process the documents before mailing back verifications.

In states that move to electronic disclosures, Brueggeman said dealers will receive immediate confirmation once they input a customer’s signature into their database and then electronically submit it to the DMV. The time saved, he added, should allow F&I managers to spend more time presenting and selling their products to more customers.

“We know that in our business, sending paper to the DMV and back to the dealer was not adding any value in the process of selling a car. It was simply taking time,” Brueggeman said. “The focus for us was to make it more efficient, more transparent, and faster.”

The e-odometer provisions should also help reduce odometer fraud, as the information dealerships enter into a state database will become permanent record. And, if an odometer is altered, there will be a record of that change as well. Either way, Breuggeman said, electronic signatures offer a form of transparency paper can’t match.

“The amazing thing about digital is that we always have a record of what happened and when it happened,” Brueggeman said. “And so you can’t always prevent fraud, but at least this [digital] gives investigators a better chance to track it.”

States have, for the most part, embraced the move to a paperless transaction, with California being the first to adopt electronic lien and titling in 1989. Today, 24 states have implemented some sort of electronics titling program, with five additional states looking to pass legislation that would allow them to digitize the titling process.

The last hurdle was digitizing the federal disclosures. A provision was included in the 2012 federal transportation bill that directed the National Highway Traffic Safety Administration to develop rules to allow for electronic odometer disclosures, but the agency has yet to propose those rules. The 2016 transportation bill means states no longer have to wait for the agency to act.

“The e-odometer language included in the transportation bill removes one of the last major impediments to fully electronic consumer vehicle purchase transactions,” said Brian Maas, president of the California New Car Dealers Association in a press release. “This opens up the field for entrepreneurship and innovation for dealers to move from paper-based transactions to an electronic transaction system.”

Posted in Auto Industry NewsComments Off on Transportation Bill Paves the Way Toward Digital Vehicle Transactions

Missouri AG Targets Dealer for Odometer Fraud

JEFFERSON CITY — A Springfield dealership there charged with odometer fraud was ordered to halt sales yesterday after Missouri Attorney General Chris Koster obtained a temporary restraining order.

In addition to the restraining order, the attorney general filed a lawsuit against Excel Auto Group LLC, accusing the dealership of advertising, marketing and selling vehicles that the business claimed had lower mileages than they actually did.

On at least two occasions, Excel Auto Group advertised a 2002 Toyota Sequoia for sale that it claimed had 119,600 miles on the odometer.

The actual mileage on the vehicle was more than 200,000 miles.

The temporary restraining order entered by Judge Jason Brown against the company prohibits Excel from violating Missouri’s consumer protection laws; from advertising, transferring, hiding, or selling motor vehicles; from altering the mileage reading and/or odometer reading of a motor vehicle; and from disposing of any documents related to the company’s advertisement or sale of motor vehicles.

“Consumers should be able to trust that a car they purchase has the correct mileage,” Koster said. “I want to continue to assure consumers that this office will be aggressive in going after those who engage in this illegal behavior.”

Koster recognized the Missouri Department of Revenue for its assistance in the investigation. A court hearing on the Attorney General’s request for a preliminary injunction is scheduled for June 21 at 1:30 p.m.

Posted in Auto Industry NewsComments (0)