ORANGE, Calif. – Four former managers at a local car dealer were arrested Wednesday and charged with inflating the value of used cars to defraud consumers and area lenders, including Wescom Central CU and TruVision FCU.
The scheme involved manipulating the Kelley Blue Book values of used vehicles by falsely reporting to lenders that the vehicles had upgrades such as leather interiors, DVD players, navigation systems and premium wheels, according to prosecutors.
After finding out how much per month a buyer could afford to pay for a vehicle, the dealers would arrange a loan to roughly match that payment. Both the lender and the buyers were defrauded when the dealership reported phantom upgrades on the vehicles, thus inflating the loan amount and the price of the car, said prosecutors.
The fraud targeted primarily unsophisticated, Spanish-speaking customers, especially those who didn't have proper identification. In some cases, the defendants would falsely inflate a customer's income to qualify for a bigger loan.
In cases wre customers didn't have sufficient credit to qualify for a loan, the defendants sometimes obtained loans using stolen identities.
Other lenders allegedly defrauded were: Americredit Financial Services, Bank of America, Capital One Auto Finance, Nissan Motor Acceptance Corp.,Wachovia Financial Services and Wells Fargo Bank
