“Man gets 2 years for swindling car dealers”

Man gets 2 years for swindling car dealers

Posted: 08 Feb 2011 06:15 AM PST

By John Branton
Columbian Staff Reporter

Tuesday, February 8, 2011

On Monday, a Vancouver man was sentenced to two years in prison in a scheme that defrauded more than 50 used-car dealers across the country, according to a bulletin from Emily Langlie, spokeswoman for the U.S. Attorney's Office in the Seattle area.

Steven P. Drury, 47, aka Stan Davis, had pleaded guilty in August to money laundering.

Using a company he'd established in Vancouver in 2005, Auto Credit Solutions, Drury and others contacted the car dealers and offered to manage the sub-prime installment payment contracts the dealers had drawn up with folks with poor credit who bought their used cars.

Drury and his telemarketers proposed to bundle the dealers' car loan portfolios with those of other car dealers and sell them to investors, according to the indictment, filed in April in U.S. District Court.

Car dealers were told they "could get cash immediately if they sold their notes, rather than holding onto their notes and receiving payments over time," said Assistant U.S. Attorney Arlen Storm, who prosecuted the case for the Department of Justice.

In return, the dealers were to pay Drury and Auto Credit Solutions cash equal to the first two or three months' payments on each car loan, officials said.

Drury used newspaper ads to recruit out-of-state "brokers" to promote the program, also called Instant Funding Systems. The "brokers" were given false information about money they would earn, the indictment says.

Car dealers were asked to sign contracts and provide voided business checks, supposedly so the company could deposit cash into their accounts, the indictment says.

In fact, Drury had no intention of bundling and marketing the companies' loans.

"There were no investors," Storm said.

Drury planned to withdraw money from the dealers' accounts, and had no plans to pay his "brokers" anything, the indictment says.

Police brought in

In the fall of 2005, the indictment says, Drury hired telephone solicitors, including Shannon L. Huggins, 33, of Vancouver who later became a partner in the fraud, Storm said.

Officials said the scammers, based at various places in Vancouver, made it a point to defraud car dealers in other areas, used private mailboxes as addresses and changed their business names to help conceal their operation.

Eventually, however, some of the defrauded car dealers contacted the Vancouver Police Department. The investigation ended up being done by the police, U.S. Postal Inspection Service and IRS Criminal Investigations, the bulletin said.

Once Drury has completed his two years in prison, he'll be on supervised release for three years. The judge in Tacoma also ordered him to pay $219,000 in restitution to defrauded car dealers.

In November, Huggins, who pleaded guilty to mail fraud, was sentenced to four months in prison, six months on home detention and three years of supervised release.

Another Vancouver man who pleaded guilty to mail fraud in the scams, 31-year-old Ben King, is to be sentenced on March 14, the bulletin said.

There are legitimate businesses that provide services like the ones Drury promised, Storm said.

The scams boil down to "advance fee schemes" where victims pay money while anticipating something in return, and receive little or nothing, said IRS Special Agent and spokesman Dan Wardlaw, based in Vancouver.

Business operators need to research outfits that make offers, and have complex agreements reviewed by an attorney, Wardlaw said.

John Branton: 360-735-4513 or john.branton@columbian.com.

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Used Cars Dealers

Tuesday, 8 February 2011