N.J. Dealer Admits to Fraud
The operator and manager of Klause Cars and Trucks Inc. pleaded guilty to wire fraud charges associated with a scheme to defraud finance sources and customers who traded in and bought vehicles at his dealership.
CAMDEN, N.J. — Harry Klause, the operator and manager of Klause Cars and Trucks Inc., pleaded guilty Aug. 9 to wire fraud charges associated with a scheme to defraud finance sources and the dealership’s customers.
Klause purchased trade-in vehicles from customers of his Ocean City, N.J.-based dealership, and applied the purchase price against the price of vehicles they purchased. Though Klause agreed to pay off any existing loan the customers had on the trade-in vehicles, he didn’t do so in a timely way, causing damage to his customers’ credit scores. Klause then sold trade-in vehicles to other customers even though he had neither paid off the loans nor gotten the vehicle titles from the lenders.
Klause steered buyers of the trade-in vehicles to various lenders to finance the purchases, but he didn’t immediately — or ever — send the titles to those lenders. If a customer stopped paying his or her car loan, the lender would be without recourse to repossess the vehicle.
During his guilty plea proceeding, Klause admitted specific acts of fraud concerning individual transactions.
The wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled for Nov. 15, 2013.
More F&I
Amplify 2026 Billed as Turning Innovation Into Results
Reynolds and Reynolds says its annual retail summit will connect dealers with practical strategies, peer insight, and technology-driven ideas.
Read More →
Own Your Outcome: F&I in the Digital Customer Journey
Finance has historically been the last step in the car-buying process, but it doesn’t have to be. The customer’s journey starts long before they arrive at the dealership, and so should F&I’s involvement.
Read More →
Tariffs Could Raise Insurance Premiums
As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.
Read More →
Smaller Loans, Longer Terms
The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.
Read More →
New Lifetime Battery F&I Product Meant to Drive Dealer Traffic
EFG Cos. offering is intended to create lifetime auto dealer engagement with customers.
Read More →
The Psychology Behind Menus That Increase Add-On Sales
There is a science to crafting a menu that gives customers confidence in the choices presented, and moving the process outside the F&I office can further boost results.
Read More →
Why Your F&I PVR Is Misleading You
Here’s a handy checklist of the numbers to track in 2026 instead.
Read More →
Auto Consumer Anxiety Presents Opportunity
A survey of U.S. drivers found the majority are concerned about finances and the economy, but those fears make many ready to buy vehicle-protection products.
Read More →
Humble and Hungry: 12 Rules for an F&I Life
Dustin Gingerich, with a decade in the F&I business under his belt, shares his thoughts on leadership, building trust with customers, and the importance of learning and innovation.
Read More →
Focus on the Opening
F&I managers must learn as much as possible about their customers, starting before they walk into their offices. The bulk of today’s consumers expect that, and good results will follow.
Read More →