$4.5 million classic car fraud scheme shut down by FBI
{{#rendered}} {{/rendered}}"Dartmouth, Nova Scotia Canada - July 19, 2012: A front end shot of a 1970 Ford Mustang antique car in Dartmouth, Nova Scotia, Canada. This classic car was parked by the owner in a parking lot at a local weekly gathering with other classic cars and car enthusiasts." (iStock)
As classic cars become more than just aspirational items and more investment pieces, buyers should always stay vigilant. Today, it's easy for criminals to scam would-be buyers out of a sale with a little creativity and the Internet. Many enthusiasts found that out the hard way over the past two years.
The FBI and the United States Attorney for the Southern District of New York exposed a $4.5 million classic car fraud ring and unsealed an indictment detailing the criminals' doing last month. In total, 25 defendants were charged with conspiracy to commit wire fraud and conspiracy to commit concealment money laundering.
The criminals, most of Eastern European descent, launched the nationwide fraud ring in November 2016 and the criminal activity continued through July of 2018. U.S. officials said the scheme involved posting fake classic car ads online, luring buyers, and setting up shell corporations to transfer money out of the U.S.
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Victims responded to ads for various classic cars on popular car sale sites, and once the two parties agreed on a final price, the defendants would direct the buyers to automotive transportation companies. The transport companies were actually the shell corporations ready to receive payment and wait for one of the 25 criminals to withdraw the funds. Victims never received the car they thought was being delivered.
Upon receiving payment, the group would begin withdrawing money from the shell corporations' bank accounts sometimes the same day victims wired money. The group worked to ensure withdrawals were in varied denominations to not tip off financial institutions or authorities to the illegal activity. The money was then sent to various Eastern European countries. Most of the victims were never able to recover the money sent and some have been left paying for auto loans without ever purchasing a car.
{{#rendered}} {{/rendered}}Each defendant could be in for up to 50 years in prison for their crimes and victims will be eligible for restitution.