The Federal Trade Commission reported that Volkswagen and Porsche repaid a total of more than $9.5 billion since 2016 to car buyers stemming from the companies’ deceptive “clean diesel” advertising of VWs and Audis fitted with illegal emission defeat devices.

Given a choice between returning their vehicle to VW or Porsche in exchange for compensation, or having the car modified to comply with clean-air rules, more than 86 percent of those who concluded the claims process chose to return their car through a buyback or early lease termination, the FTC noted in a Final Status Report filed with the U.S. District Court for the Northern District of California. 

“Most important, the FTC orders and related private class settlements provided redress sufficient to compensate consumers fully,” the FTC said in its July 27 final summary report.

VW's clean diesel Golf TDI
VW's clean diesel Golf TDI won World Car of the Year 2009

The FTC’s final report to the court marks the end of the largest consumer redress program in U.S. history, set up in 2016 and 2017 to compensate purchasers and lessees of more than 550,000 deceptively marketed “clean diesel” VW and Audi cars. In a complaint filed in federal court in March 2016, the FTC alleged that Volkswagen’s seven-year ad campaign was based on false claims that the cars were low-emission, environmentally friendly, met emissions standards, and would maintain a high resale value. In reality, however, the cars were fitted with illegal emission defeat devices designed to mask high emissions during government tests.

The FTC orders settling the case, approved in conjunction with class action plaintiffs, required payments to consumers that included compensation for their vehicles’ full retail value, plus all other losses they suffered because of the deception, such as time spent shopping for new vehicles, sales taxes and registration fees, and the additional amount consumers paid for a low-emissions vehicle feature. 

In addition to the FTC order on consumer redress, the Department of Justice and the Environmental Protection Agency obtained court orders providing billions more for environmental relief. In the final report, the FTC reported to the court that despite the large volume of claims, Volkswagen had “successfully managed the settlement administration process effectively,” working together with a court-appointed independent claims supervisor tasked with monitoring compliance. 

A Los Angeles man was arrested on federal charges that allege he conned victims into giving him their high-end and exotic vehicles with bogus promises he would find other people to take over their leases.

Investigators have, so far, identified approximately 115 victims from around the nation. The estimated losses in this case exceed $1 million.

Geoffrey Eldridge Hull, 40, who maintained offices on Sunset Boulevard in Hollywood, was arrested recently by special agents with Homeland Security Investigations. Hull was arrested pursuant to a federal grand jury indictment that charges him with six counts of wire fraud related to his “lease consignment” program. Hull allegedly marketed himself and the various companies he operated as being able to find people to take over luxury automobile leases from individuals who wanted out of the leases on their Bentleys, Ferraris, Porsches, Maseratis and other high-end automobiles. Hull agreed to cover monthly lease payments and promised leaseholders that he would quickly find a “credit-qualified buyer to legally assume the lease through the original finance company,” according to the indictment, which further alleges that Hull used a longtime friend and business associate to vouch for the quality of the program.

Despite assuring victims that his venture was successful, Hull and his companies did not find people to take over these leases, the indictment alleges. Instead, Hull offered the luxury cars for rent and passed little of the rent money onto the original leaseholders, who were still responsible for lease payments. Furthermore, Hull allegedly made few, if any, timely car lease payments.

Hull routinely ignored victims’ requests for the return of their vehicles, prompting some to make stolen car reports to law enforcement agencies, according to court documents. When some victims’ cars were returned after law enforcement seizures, repossession and other means, the cars were often damaged, had incurred toll and parking violations, and had been driven over the allotted mileage.

“Customers and local and federal law enforcement repeatedly told Hull his business was fraudulent, Hull was sued civilly several times for fraud and intentional misrepresentation, he received dozens of demand letters from attorneys, and he was interviewed by the media about his failure to make lease payments as promised,” according to a criminal complaint previously filed in this case.

When victims posted negative reviews online about Hull and his company, Hull would change his company name and resume the scheme, court documents allege.

A woman was sentenced to state prison for her role in a theft scheme in which “straw buyers” obtained car loans and high-end cars by fraud. The leader of the scheme previously pleaded guilty and was sentenced to state prison.

Jacqueline Reyes-Keegan, 60, formerly of Fairview, N.J., now of Sherman Oaks, Calif., was sentenced to six years in state prison by Superior Court Judge Robert M. Vinci in Bergen County. She was found guilty on Feb. 4 following a jury trial of second-degree conspiracy related to thefts from one car dealership. She was acquitted of a theft charge. On June 11, 2020, Reyes-Keegan pleaded guilty to an additional charge of second-degree theft by deception contained in a separate indictment involving thefts from a second dealership. She was sentenced to six years in state prison on the trial conviction and a concurrent six years in prison on the guilty plea.

The leader of the scheme, Spencer Crump, 45, of Teaneck, N.J., pleaded guilty to second-degree conspiracy and was sentenced to five years in prison on July 12, 2019. Another man, Abdul B. Seedat, 64, of Fairview, N.J., pleaded guilty to third-degree theft by deception and is awaiting sentencing.

Crump and a company he controlled, SLC Logistics LLC, recruited “straw buyers” with assistance from Reyes-Keegan. The scheme targeted a car dealership in Tenafly and a second dealership in Hackensack. The trial of Reyes-Keegan related to the Tenafly dealership, where the defendants stole $275,191 in loan proceeds to purchase four luxury vehicles. The straw buyers were promised payments from Crump to sign for the car loans, and the cars were turned over to Crump and Reyes-Keegan. There was never any intention that the loans would be paid back. The thefts occurred between June and December 2015. Reyes-Keegan’s guilty plea related to the Hackensack dealership, where loans totaling $301,213 were fraudulently obtained to buy five vehicles. Seedat, a dealership employee, participated in that scheme.

Three men face federal drug trafficking charges after officers seized almost 80 kilograms of cocaine from a Dayton, Ohio, used car dealership.

A federal indictment charges Jerry Timothy Vaughn Jr., 40, of Dayton, and David Scott, 41, of Dayton with narcotics conspiracy, distribution of a controlled substance and possession with intent to distribute a controlled substance. It was unsealed after Scott’s arrest on July 1. A Cincinnati man, Shannon Jamar Higgins Sr., 47, pleaded guilty on July 14 to one count of possession with intent to distribute a controlled substance.

According to court documents, DEA agents and Cincinnati police officers investigating cocaine trafficking in Cincinnati determined that Higgins was traveling to

Luxury Sports Auto Sales in Dayton to purchase cocaine from Vaughn and Scott, who is the co-owner of the used car dealership.

Investigators executed a federal search warrant at Luxury Sports in January and found approximately 79,970 grams of cocaine in a metal cylinder. They also searched Vaughn’s residences and found cash, more cocaine and a firearm.

Narcotics conspiracy and possession with intent to distribute more than 500 grams of cocaine is punishable by a term of imprisonment of at least five up to forty years. Distribution of a controlled substance is punishable by up to 20 years imprisonment and possession with intent to distribute five kilograms or more of cocaine is punishable by a term of imprisonment of at least ten years up to life.

Florida law enforcement officials arrested five suspects, with two more pending, in connection with a new-car dealership’s complex fraud scheme.

Attorney General Ashley Moody’s Office of Statewide Prosecution, in coordination with the Florida Highway Patrol, reported that they identified a criminal enterprise operating out of Auto Sports of South Florida, a dealership in Broward County and Osceola County.

Investigators established that suspects were fraudulently taking possession of vehicles and applying for duplicate titles by using fictitious documents and methods.

“These scammers fraudulently took possession of vehicles and created fake documents to obtain titles, all to make a dishonest dollar at the expense of consumers,” Moody said. “I’m proud to have my office partner with local law enforcement to take these criminals down.”

According to the multi-agency investigation, members of the criminal organization submitted documents, including fraudulent power of attorney documents, to the Florida Department of Highway Safety and Motor Vehicles making it appear as though the financing for the fraudulently obtained vehicles was paid in full and the loans satisfied.

The investigation revealed that the fraudulent documents allowed members of the group to obtain duplicate titles to the cars. Because the duplicate titles appeared legitimate, the members of the criminal organization, including the owner of Auto Sports of South Florida, were able to sell the cars to others, including good faith purchasers for a large profit. The investigation took place over a span of 12 months and involved seven Florida counties.

The suspects, David Cruz, Janine Eid, Nickelson Fervil, Pedro Negret, Nigil Parker, Mark Solomon and Reynold Vergara, are charged with 51 counts of offenses that include racketeering, grand theft, identity theft, money laundering and insurance fraud. Cruz, Eid, Fervil, Parker and Solomon were all arrested. Arrest warrants for Negret and Vergara are pending at press time.

If convicted, the defendants face up to 30 years in prison for each of the numerous first-degree felonies charged.

Trending News

NIADA President Tedeschi Takes Reins

NIADA President Tedeschi Takes Reins

Sep 23, 2020 Rate: 5.00

AiM Hits Milestone

AiM Hits Milestone

Sep 23, 2020 Rate: 0.00

CDK Installs DMS at Auto Group

CDK Installs DMS at Auto Group

Sep 23, 2020 Rate: 0.00