A California dealership won a major victory against an illegal car exporter that used an intricate scheme to buy dozens of high-end pickups and then sell them overseas. The dealer was on the hook for hundreds of thousands of dollars, but was able to take the culprits to court, and win.
Huntington Beach Chrysler-Dodge-Jeep-Ram was the victim of a fraud, as reported by Automotive News. Ram pickups sold by the dealership were illegally exported to China and the store was forced to pay back $405,717 worth of incentives to Fiat-Chrysler.
Through some detective work, dealer principal, Pete Shaver was able to track down and successfully sue the man who created an elaborate scheme to purchase several high-end pickups with the purpose of exporting them.
The lawsuit named Mark Lin as the defendant and according to the complaint, Lin set up Quadrant Armored Sales and Leasing Inc. as a buyer for his company AM Legend that would sell cars to Chinese customers with huge profits. Lin arranged for the purchase of 55 Longhorn edition Rams that had a sticker price of over $50,000.
Court documents detail how Lin managed to get so many trucks, as noted by AN:
Lin used a former business partner, Brian Van Cleave, an unlicensed automobile broker who had worked as a new-car salesman at various dealerships in Southern California, as a middleman.
To acquire the trucks, Van Cleave reached out to a former dealership colleague, Bryan Hopkins, a fleet manager with the Huntington Beach store, in 2012. Hopkins and Van Cleave had worked together at the dealership when it was under previous management. Hopkins agreed to help in exchange for a $200 kickback paid by Lin and Van Cleave on every Ram purchased.
The buyers told the dealership that they would be registering the trucks in Arizona under another company name.
It all fell apart in 2014 when Fiat-Chrysler issued an audit forcing the dealership to check the registration on those trucks. When the Arizona DMV, showed no recorded of the VINs in their system, they dealership knew they were duped. Local authorities and the U.S. State Department got involved in the case.
Further complicating the situation, the dealer was stuck with 55 big-ticket Ram trucks with no buyers. They had to liquidate those units and sell them at a loss of over $100,000.
After Hopkins confessed to being involved and was terminated, Peter Shaver acquired legal representation to sue Lin under the Racketeer Influenced and Corrupt Organizations Act.
During the trial, Lin and his associates claimed that they were not doing anything illegal. In a statement from Shaver’s attorney:
“The defendants were aggressive...They said, ‘There’s nothing illegal about exporting cars,’ but we pointed out that there were signed dealer agreements and contracts that didn’t allow for exporting. The jury understood that.”
In October, a jury found Lin his business liable for fraud, breach of contract intentional misrepresentation or concealment and violation of the RICO act. The dealership was awarded damages totaling $1,647,330.
Unfortunately, the dealership doesn’t get to collect that money yet, AM Legend and Mark Lin have filed one motion for a new trial and another that claims there was not enough evidence to support the jury’s verdict on RICO and fraud. Only if and when a court denies those motions can the dealership start the process for collecting what is owed to them.