Seven arrests were made Feb. 19 after investigations lead by the Arizona Department of Transportation (ADOT) busted a dealer-run scheme that generated $7 million in fraudulent vehicle sales, the department announced this week.
The scheme, perpetrated “over the past couple years,” involves “curbstoning,” a fraudulent practice in which auto dealers sell used vehicles by masquerading as private parties, ADOT said. Dealers typically use the practice to sell low-value used cars to unsuspecting consumers. Curbstoning also involves other violations, such as title fraud, odometer fraud and hidden flood damage.
In this case, the seven licensed dealers are accused of illegally cosigning their licenses to individuals in other states, allowing those individuals to bypass tax payments, registration fees and other state laws. The scheme provided 1,500 individuals with illegal dealer licenses.
According to the investigation, “Individuals allegedly subscribed to one of several websites identified by investigators to obtain wholesale and retail dealer license credentials from the suspects, rather than the state, for a monthly fee, usually in the hundreds of dollars.”
The dealer-fraud operation also altered vehicle titles for about $100 per title to make it appear they’d been purchased from one of the seven suspects’ 31 operations with dealer licenses. More than 31,000 titles for vehicles were processed this way, many of which were never in Arizona.
The suspects all face multiple felony charges, including fraudulent schemes, money laundering and tax evasion.
