Eighteen people were indicted today for their alleged roles in two auto loan fraud schemes that resulted in nearly $2 million in losses, authorities said.
Sixteen people have been arraigned in Queens Supreme Court on charges that include grand larceny and possession of stolen property, while two others remain at-large.
Twelve of the accused scammers allegedly purchased luxury cars, such as Cadillac Escalades, BMWs and Porsches, between July 2008 and March 2010, officials said.
The defendants then used “straw borrowers” — people with good credit to front for them — to take out $1.9 million in loans in exchange for a $2,000 kickback.
Authorities said once the vehicles were turned over to the crooks, the cars were then allegedly sold or rented out on the black market. The cars were then later sold to dealers at auction, leaving the people with good credit stuck with the bill.
Queens DA Richard Brown called the scam “highly complex and sophisticated.”
“Unfortunately, [the straw borrowers] wound up with ruined credit, multiple banks suing them for money and suspended driver’s licenses for unpaid parking tickets on vehicles they allegedly ‘own.'”
In another similar scheme, nine other people were busted with conspiring with one another to commit loan fraud by recruiting borrowers with good credit to take out bank loans in a bid to buy used cars or make home improvements, authorities said.
But vehicles were never purchased and improvements were never made, officials said, and the defendants are now accused of obtaining more than $180,000 in loans.
Police Commissioner Ray Kelly said, “Straw purchasers were assured that the suspects would pay off the car loans in full and they would be left with even better credit histories in addition to a $2,000 fee. If you think that was too good to be true, you’re right.
“In fact, suspects would stop making payments after three installments and then rent or sell these high-end vehicles, often to other criminals … leaving the straw purchasers holding the bag.”