Statements by District Attorney Tony Rackauckas – Douglas Nissan of Orange arrests

Douglas Nissan of Orange arrests
Statements by District Attorney Tony Rackauckas
September 25, 2008

Thank you for coming.  We are honored to have here Doug Brenn, Deputy Chief for the Investigative Division of the Department of Motor Vehicles, Sgt. Dave Vullo and Detective Dave Pasino from the Orange Police Department, Senior Deputy District Attorney Doug Brannan and Senior Assistant District Attorney Joe D’Agostino of the Orange County District Attorney’s Office.

Four defendants were arrested on warrants yesterday in the largest fraud case against a car dealership in Orange County’s history. 

In April 2007, the Orange County District Attorney’s Office began investigating consumer complaints of fraudulent activity at Douglas car dealerships.  Between 2005 and 2007, 27 identity theft police reports were filed with the Orange Police Department regarding Douglas Nissan of Orange.  More than 100 complaints had been filed with the Department of Motor Vehicles and Better Business Bureau about Douglas Nissan of Orange and other Douglas dealerships for unfair business practices.

Many of you may remember reporting that law enforcement officers from the Department of Motor Vehicles, Orange Police Department, and Orange County District Attorney’s Office searched Douglas Nissan last July.  The evidence we seized included two computers, electronic data from four additional computers, and 350 boxes containing 12,000 car transaction dealer jackets.  Each dealer jacket contained several documents including contracts, credit reports, applications, warranty and insurance information, and other documentation relevant to the sale or lease of a vehicle. 

This case reflects some of the most egregious crimes with similar fraudulent fact patterns.

The four defendants who were arrested yesterday have been charged with 43 counts of forgery, 31 counts of grand theft, and one count of conspiracy to defraud.  Frank Urbano is a part-owner of Douglas Nissan of Orange, which has since changed its name to Stadium Nissan.  Mr. Urbano was the general manager who oversaw the day-to-day operations of the dealership.  Luz Coral, Kevin DeRosier, and Marwan Abdellatif were former desk managers at Douglas Nissan who supervised the dealership sales staff, secured documentation and financing for vehicle sales, and signed off on all car sale deals. 

Between February 2005 and June 2007, the defendants are accused of participating in an elaborate ongoing conspiracy to sell used cars at prices above their value, driving up the customers’ monthly payments. The higher the price, the higher their profit. This conspiracy resulted in three types of victims:  the defrauded customers, persons whose identity information was used without permission, and the banks that were tricked into issuing bad loans. 

Here is how the scheme worked. The defendants are accused of submitting false loan information to cheat lenders and defraud vulnerable customers by securing unaffordable loans in the customer’s name.

Let me turn your attention to a sample Kelley Blue Book chart. When making a lending decision related to the purchase of an automobile, banks rely on the Kelley Blue Book to determine the value of a vehicle. In order to justify high loan values for cars at Douglas Nissan, the defendants are accused of falsifying electronic Kelley Blue Book records by overstating the value of certain vehicles and misrepresenting certain features of the car. They are accused of defrauding banks out of an estimated $911,500 in financing through the submission of these falsified records. Eight known banks and lending institutions were defrauded in the scheme.

In addition to the banks, the increased loans also victimized consumers. The victims were hand selected by the defendants. The targeted victims were primarily Spanish speaking customers who did not have proper identification or understand the process of buying a vehicle – there were false identities, fake paystubs, for cars with phantom features.

The defendants are accused of encouraging victims to sign loan and purchase documents that had not been completed, and they would later fill in the documents with information that overstated the victims’ ability to pay. In many cases, the victims could not afford the payment on the higher loans and lost their cars. One victim, with a monthly income of $2,000, was pressured into signing a contract without having the opportunity to read or understand it, and later found that Douglas Nissan has inflated the income on his application to $4,300 a month. A victim in Texas discovered that her social security number and identity had been stolen and used to purchase a car at Douglas Nissan.