The results of a year-and-a-half-long investigation into two Five Towns used-car dealerships were announced Wednesday by Nassau County District Attorney Kathleen Rice and members of the Nassau County Police Department’s Homicide, 4th Precinct, and Crimes Against Property squads, who were assisted by the New York State Department of Motor Vehicles. The investigation began as a homicide investigation and eventually uncovered a tangled web of financial schemes that have resulted in stolen identities and dozens of “mystery” owners driving high-end automobiles on New York streets and fraud against used-car customers.

Rice said that the investigation has resulted in the arrest of 11 individuals and charges against a corporation, now-defunct Universal Auto World in Lawrence. Two former employees of Universal have been arrested, along with three employees of nearby Victory Toyota, also on Burnside Avenue in Lawrence. Six other non-employees have been arrested and accused of participating in the financial schemes taking place at the dealerships.

“Through a multi-agency investigation, today we have crushed the fraud, the financial mismanagement, the identity theft and the outright stealing that have been commonplace at these two auto dealerships,” Rice said Wednesday. “This investigation started with a murder… Detectives and prosecutors simply followed the money.”

The investigation into the two dealerships began with the January 11, 2007 murder of Collin Thomas, a 27-year-old salesman at Universal Auto World. Thomas was shot in the back while standing outside Universal’s offices late on a Thursday night. The subsequent investigation by the Nassau County Police Department’s Homicide Squad uncovered numerous instances of potential financial fraud at the dealership. A joint investigation with the DA’s Economic Crimes Bureau, the Police Department’s Crimes Against Property Squad, and detectives from the department’s 4th Precinct and NYS DMV has now revealed numerous instances of alleged financial impropriety, including the filing of bogus financial paperwork, identify theft, and grand larceny.

It is alleged that two men, acting as middlemen, used stolen identities to purchase luxury vehicles from Universal Auto World. The identity thieves would then give the vehicles to a third party for use and for their payments on the car loan. By using stolen identities and a middleman to broker the purchase, the eventual “owner” of the vehicle would avoid identification as long as they paid the car loan on time and in full. In one instance, the identity of an unsuspecting 75-year-old Suffolk County woman was used to purchase more than $250,000 in automobiles, including a 2005 Maserati, a 2007 Jaguar, and a 2006 BMW. One of the men was arrested while driving a second 2005 Maserati that was purchased using the stolen identity of a 53-year-old West Hemp­stead man. There are said to be a total of ten instances in which stolen identities were used to facilitate this type of fraudulent purchase.

Numerous instances of “straw” purchases were also discovered. In these cases, the men would set up “straw” buyers at the request of Universal. The DA said that other defendants in the case, acting as straw buyers, would receive checks or cash from Universal Auto World for allowing their identities and credit to be used to purchase high-end vehicles that they would never possess and for allowing their signatures and personal information to be used to apply for loans which they never had any intention of paying. This was done to conceal the identities of the real buyers who wanted to remain off state records. At least 20 luxury vehicles, including BMWs, Range Rovers, and Infinitis were purchased under this scheme.

In both schemes, Rice said, the loan payments were made by the third parties to avoid discovery. The payments were always made in the names of the victims of identity theft and in the names of the straw buyers. In all, 30 cars were purchased by mystery buyers at Universal Auto World. These cars have since been repossessed by the lending institutions or Universal has been forced by the lending institutions to repurchase and pay off the loans on these cars.

Rice said that the authorities may never know for certain why the drivers of these vehicles might want to distort their identity. “I can think of a lot of reasons why someone wouldn’t want their name on the books [as the owner of] an automobile, and none of them are good,” she said.

Universal Auto World has been charged as a corporation and will face up to $80,000 in fines.

The investigation was eventually expanded to include Victory Toyota, when witnesses in the Universal case told investigators similar practices were occurring at Victory, and that salesmen often switched from one dealership to another. An examination of consumer complaints raised red flags and investigators uncovered a variety of financial scams and theft at the dealership.

A Victory manager and an accomplice would tell prospective buyers that in order to get a used-car loan, it was necessary to purchase thousands of dollars of anti-theft devices and extended warranties for the vehicles. This was done to increase the purchase price of the vehicle, as well as the sales commission. The accused also had a financial interest in the anti-theft device company.

The two defendants would also file loan applications containing false income information with lending institutions in order to push through auto loans, without the purchaser’s consent or permission. In several instances where customers gave cash deposits, the deposit was pocketed by the salesman and the amount of the deposit tacked on to the amount of the loan without the customer’s knowledge. Customer signatures were also forged on applications for higher cost loans processed with lenders and at rates other than those the purchasers had originally agreed upon.

Another employee of Victory was charged earlier this month with stealing a $5,000 down payment made by a customer to find a certain car. The customer was told the vehicle couldn’t be found and his check was destroyed, but in fact it was stolen and cashed.

The investigation uncovered 25 incidents in which Victory employees are alleged to have illegally adjusted rates or financial information, stolen cash deposits, or tacked on extra items to increase their sales and pad their commissions. As a result of this investigation, Victory has allowed ripped-off consumers to return the car and pay back the loan or keep the car and renegotiate the loan with the lending institution. Some refunds have also been made to consumers who were forced to buy non-essential add-ons like “LoJacks” or extended warranties.

The investigation into the killing of Collin Thomas remains active.

Handling the case for the District Attorney’s office and the Police Department are Assistant District Attorney and Bureau Chief Diane Peress and ADA Brian Heid, of the DA’s Economic Crimes Bureau, Detective Robert Nill from the NCPD’s 4th Precinct Squad, and Detective Ronald Schepis from NCPD’s Crimes Against Property Squad. The Police Department’s homicide investigation is being led by Detective Michael O’Leary. Supervising Investigator Gerard Harrison from NYS DMV’s Field Investigations Unit assisted the NCPD and DA’s office throughout the investigation.

(5 Towns Jewish Times)