Wednesday, August 15, 2018

FBI Uncovers $4.5 Million Classic Car Fraud Scheme to Steal from Collectors


FBI Uncovers $4.5 Million Classic Car Fraud Scheme to Steal from Collectors
It’s August in Metro Detroit, and that means it’s time for the Dream Cruise and classic cars. If you are thinking about getting in on the fun with a classic car purchase, you will want to know about a $4.5 million classic car fraud scheme recently uncovered by the FBI, and how to make sure you’re not taken advantage of too.

25 Men Steal $4.5 Million from Classic Car Collectors in Auto Fraud Scheme

Imagine scouring the internet to find your favorite classic car. You finally locate it and negotiate a price with the seller, but then the vehicle never arrives. You lose thousands of dollars and may be forced to pay an auto loan for years for a vehicle you never owned.

That has been happening for the last two years in a classic car fraud scheme recently uncovered by the Federal Bureau of Investigation (FBI). According to the federal indictments filed in the District Court of Southern New York, 25 co-conspirators worked together between November 2016 and July 2018 to collect $4.5 million and smuggle the money out of the country to accounts held in Eastern Europe.

How the Classic Car Fraud Scheme Worked

The men involved acted as auto dealers and collectors, posting classic cars on well known Internet auction and trading websites, claiming the cars were for sale. When a collector contacted them to purchase the classic cars, they would negotiate a price and then refer the would-be buyers to a supposed automotive-transportation company for payment and delivery. 

But those companies were shell companies. They would demand the money from collectors up front and then deposit the funds into corporate bank accounts controlled by the co-conspirators. Quickly – sometimes the same day – the men would start to withdraw the funds and transfer them to accounts overseas. They were careful to withdraw the funds in small and varying amounts, to avoid the banks reporting them for wire fraud. The collectors were left without the classic car they thought they had purchased and were often not able to recover their money.  

Following an investigation, the FBI filed indictments against all 25 co-conspirators, charging them with conspiracy to commit wire fraud and conspiracy to commit concealment money laundering. 

How Not to Fall for a Classic Car Fraud Scheme

If you are a collector, you need to protect yourself against classic car fraud schemes like the one that hit the courts last week. In the sale of any used vehicle, information is key. Before you commit to payment, get specific details about the car in question. Ask for the VIN and the history of the vehicle. Get an accident report, like CARFAX, to find out the classic car’s condition and make sure it is what the seller claims it is. 

If possible, ask for a new and different photo of the vehicle not already available on the internet listing. This helps ensure that the seller actually has access to the vehicle. 

As time consuming as it can be, arrange to pick up the vehicle yourself. This will allow you to inspect the vehicle in person before handing over the purchase price. If you can’t do it yourself, insist on an independent inspection by a local mechanic who can validate the quality of the vehicle and its condition.

Protecting yourself against a classic car scheme takes diligence and a willingness to travel for your passion. If you cut corners or allow the seller to direct the transportation, you could find yourself without the money, or the car. 

Dani K. Liblang is a consumer protection attorney at The Liblang Law Firm, PC, in Birmingham, Michigan. She helps the victims of car fraud schemes recover their payments and stop collection companies from coming after them. If you have been the victim of auto fraud, contact The Liblang Law Firm, PC, for a free consultation.

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