DUTCHESS COUNTY, New York – The owners of a Dutchess County auto dealership, who face criminal charges in an alleged car loan scam, were ordered in June to pay more than $200,000 for selling bogus VSCs to nearly 100 of their customers, reported the Poughkeepsie Journal.
New York State Supreme Court Judge Christine Sproat issued the order against Jorge Manzanarez and Nilson Cortez. The two men are co-owners of Mega Auto Group, which had used car dealerships in Poughkeepsie and LaGrange.
Manzanarez and Cortez knowingly defrauded customers by selling a $2,000 VSC called SafeChoice, to customers multiple times without their consent, and then failed to submit the money to the VSC company.
After reviewing 100 sales contracts to which the VSC was attached, the Attorney General's Office found the dealership only submitted nine contracts to licensor SafeData for VSC activation. The remaining contracts were never filed with the licensor. Instead, the dealer kept the $2,000 per contract and left at least 91 consumers with no VSC coverage for their vehicles.
In a related matter, Manzanarez, Cortez and a third defendant, Shane Gordon, were indicted in April on grand larceny charges, a felony punishable by up to 25 years in state prison. They are accused of obtaining more than $1 million in fraudulent auto loans from TEG Federal Credit Union.
Gordon was employed as a loan officer at the credit union at the time of the alleged thefts. He has since been fired from his job, credit union spokeswoman Stephanie Molinelli said.
Manzanarez and Cortez are accused of creating and submitting forged pay stubs and bogus tax records on more than 80 auto loan applications for customers who otherwise would not have qualified for the money. Gordon allegedly accepted cash payments from Mega Auto Group in exchange for approving an estimated $1.4 million in phony loan applications.
The crimes allegedly took place between May and September 2007. About $340,000 of the loans are already in default and others are delinquent, according to Senior Assistant District Attorney Edward Whitesell.
The scheme was discovered during a joint investigation by the credit union, the District Attorney's Office, the state Attorney General's Office and detectives from the Dutchess County Sheriff's Office, Whitesell said.