A federal jury recently convicted a dealership owner in a massive fraud case, and the details are insane! James Pinson owned a dealership in Kentucky that sold used cars, including Toyota trucks. He cooked up a scheme that allowed him to fraudulently sell cars back to Toyota, which was quite lucrative. Until the FBI caught on.
James Pinson took advantage of the Toyota Customer Support Program
The United States Department of Justice recently convicted Pinson of a slew of charges. The first charges were three counts of wire fraud, six counts of mail fraud, one count of aggravated identity theft. The Department of Justice also convicted him of two counts of conspiring to commit money laundering.
Pinson owned Big Blue Motor Sales, a used car dealership in Kentucky. He was explicitly working with Toyota by using the Toyota Customer Support Program. Pinson would purchase Toyota trucks at wholesale price through auctions to pull this off. He would then obtain Kentucky and West Virginia residents’ driver’s licenses and fraudulently had Toyota repurchase the trucks at 150% of the retail value.
Toyota wrote 350 checks in these Kentucky and West Virginia residents’ names between 2013 and 2015. After that, Pinson forged the signatures on all 350 checks and deposited the checks into his bank account.
Toyota would repurchase vehicles at 150% of the retail value
After depositing the checks, Pinson would use the money to buy more Toyota trucks. He would purchase the trucks at wholesale and repeat the scam each time. Toyota had a warranty program that allowed the company to repurchase used cars with extensive rust damage for 150% of the value as long as individuals and not a dealership owned the trucks.
He bribed a service manager at Toyota with cash to keep the scheme going. He also bribed a Toyota Customer Support Program staff member with money. After he had enough cash lying around, Pinson purchased a house on the beach in Pawley’s Island, South Carolina.
There were a lot of people involved in bringing Pinson to justice. The U.S. Postal Inspection Service, the FBI, and the West Virginia State Police worked together. On top of that, the West Virginia Office of the Insurance Commissioner and the National Insurance Crime Bureau worked with the other groups to bring him in.
Due to the laundry list of charges, Pinson is facing 22 years in prison. He will also serve a mandatory two-year sentence from the aggravated identity theft conviction. He will have to pay back all 4.3 million to Toyota and forfeit all property and items bought with the money.
There were more people involved in the scheme
Pinson did not work alone in this scheme, either. Tammy Newsome pleaded guilty to a single count of mail fraud last year. The DOJ also charged an individual named Gary Conn but dismissed the charges earlier this year. Frank Russo and Kevin Fluharty were brought up in a separate case related to this one. Russo pleaded guilty to a count of wire fraud. Fluharty pleaded guilty to mail fraud but died last month due to natural causes.
In conclusion, it probably isn’t advisable to try and scam one of the largest automakers out of millions of dollars. James Pinson learned this lesson the hard way and will be in prison for an extended period. The DOJ will sentence Pinson on March 3, 2022.