One Kentucky dealership owner and two co-conspirators have been charged with ten counts of fraud and identity theft used to facilitate a warranty scheme that racked up more than $4 million in losses for a “major” auto lender, the Department of Justice announced this week.
If convicted, the perpetrators each face up to 30 years in prison, according to the U.S. Attorney’s Office of the Southern District of West Virginia.
To facilitate the scheme, James Pinson, Gary Conn, and Tammy Newsome leveraged a lender’s warranty extension program that offered to repurchase trucks for 150% of their value. The fraudsters bought trucks at wholesale prices at auction through Pinson’s dealership called Big Blue Motor Sales of Louisa.
The warranty program, however, had one condition — the trucks had to be owned by individual customers instead of the dealership. With that in mind, the trio obtained hundreds of copies of Kentucky and West Virginia residents’ driver’s licenses and fraudulently titled 350 trucks with the stolen identities and induced the lender to repurchase the trucks at 150% of the value.
The scheme ran for two years and resulted in $4.3 million in losses to the car company, the press release noted. The indictment did not name the companies victimized by the scheme.