• Four Individuals Charged in $7 Million Car Loan Scheme Throughout the New York City Area

    Author : The Blanch Law Firm May 27, 2016

    Press Release: Four Individuals Charged in $7 Million Car Loan Scheme Throughout the New York City Area 

    https://www.justice.gov/usao-sdny/pr/four-individuals-charged-7-million-car-loan-scheme-involving-dealerships-throughout-new

    Who:
    The defendants:
    Julio Alvarez, owner and operator of several NYC-area businesses and corporate entities including a livery cab dispatch service.
    Christopher Campos, a New Jersey attorney.
    Marco Blasio, a car dealership employee who worked in the financing department.
    Geuris Ramos, a “straw buyer.”

    What: Each defendant has been charged in federal court with: one count of Conspiracy to commit bank and wire fraud, which carries a maximum sentence of 30 years in prison, one count of Bank Fraud, which carries a maximum sentence of 20 years in prison, and one count of Wire Fraud, which carries a maximum sentence of 20 years in prison.

    Where: New York, New York and Bronx, New York

    When: The alleged crimes happened from about October 2012 to September 2013. The complaint was unsealed on March 9, 2016.

    Why: According to the complaint, the defendants, working together, orchestrated a scheme in which they used “straw buyers” with good credit histories to obtain car loans for new vehicles by completing fraudulent car loan applications to several lenders.

    A “straw buyer” is a person who purchases something for someone else in order to commit fraud or get around legal restrictions.

    This scheme involved about 20 “straw buyers,” 200 new vehicles purchased, and more than $7 million in loans from several different lenders. Most of these loans went into default.

    How: When borrowers apply for loans for vehicles, they are typically asked whether the vehicle will be used for personal use or commercial use. This is because lenders generally charge higher interest rates and less favorable financing and insurance terms for vehicles that are used commercially, mostly because these vehicles are usually subject to more wear and mileage.

    Authorities received information from two cooperating witnesses (Cooperating Witness 1 and Cooperating Witness 2) that led to the arrest of these four individuals. These two individuals have already pled guilty to Wire and Bank Fraud and are cooperating with law enforcement in the hopes of receiving a more lenient sentence. The complaint includes that their information has proven to be reliable and has been corroborated by independent evidence like financial records.

    Some of the information they received from these cooperating witnesses that led to the arrest of the four defendants are:

    • Alvarez and Cooperating Witness 1 entered into a deal to purchase vehicles and lease them to livery cab drivers. They intended to use the initial lease payments to pay off the vehicles, and divide the subsequent payments among the participants in this deal.

    • Cooperating Witness 2 was a finance manager at a car dealership. Cooperating Witness 2 and Cooperating Witness 1 discussed that the most financially profitable way to obtain new vehicles was to use people with good credit as straw buyers, and purchase multiple cars simultaneously from different lenders. Cooperating Witness 2 explained that they would not disclose to these lenders that the straw buyer was obtaining multiple loans for additional vehicles.

    • Ramos agreed to participate in this scheme as a straw buyer.

    • Cooperating Witness 1 and Alvarez opened a corporate entity they would use as a leasing company for livery cab drivers in which they gave Alvarez, Ramos, and Cooperating Witness 1 a one-third interest in any profits and losses.

    • Alvarez was in charge of business operations, including collecting lease payments from the livery cab drivers and making the loan payments.

    • Cooperating Witness 2 used Ramos’s personal information to complete several applications for car loans at the dealership Cooperating Witness 2 worked for, and Ramos applied for several loans for several vehicles in which he made false statements, including that the vehicles were being used for his personal use.

    • Ramos, Cooperating Witness 1 and Alvarez recruited more straw buyers. Cooperating Witness 1 accompanied several straw buyers, and Cooperating Witness 2 helped them fill out the applications at the dealership he worked for. At least one straw buyer filled out multiple loan applications to different lenders where he misrepresented his income and whether the vehicle would be used for personal or commercial use. This straw buyer submitted false loan applications for about 18 vehicles.

    • Blasio, a finance manager at a different car dealership, helped facilitate the same scheme for more straw buyers.

    • Campos, a New Jersey attorney, agreed to help Alvarez and Cooperating Witness 1 recruit additional straw buyers in exchange for a portion of the profit from the livery businesses.

    • On at least one occasion, Campos accompanied a straw buyer he’d recruited to a dealership to submit multiple car loan applications for multiple vehicles using the same false information. Alvarez and Cooperating Witness 1 and Alvarez also personally accompanied other straw buyers to the dealerships when the applications were filled out.

    • Loan payments started to be missed after these purchases.

    A review of the loan applications referred to revealed that the straw buyers, including Ramos, agreed not to use the vehicles for hire, livery, or lease. Ramos and several straw buyers fraudulently inflated their incomes in order to increase their chances of being approved, as well as reported different incomes on different applications that were completed around the same time.