17 Arrested In Vehicle Fraud Ring

Investigators say a Costa Mesa firm sold luxury cars without paying off loans used to obtain them.

Lisa Munoz, Orange County Register, Apr. 29

Police arrested 17 people before dawn today in Orange and southern Los Angeles counties in a massive bust of what officials are calling the largest auto-theft fraud ring in Orange County history.

Duty Free Auto Club in Costa Mesa defrauded buyers, banks and finance companies out of more than $8.5 million, according to the Department of Motor Vehicles.

Investigators said six principals who ran Duty Free recruited co-conspirators, or “straw-buyers,” through advertisements in Southern California Vietnamese-language newspapers.

Those buyers used false credit profiles to buy high-end autos such as Hummers, BMWs and Cadillac Escalades at new-car dealerships. The co-conspirators then handed over the keys to Duty Free, which ceased making payments after two or three installments, then sold the car to an unsuspecting buyer, police said.

More than 200 DMV and local law-enforcement officers conducted the surprise undercover sweep. They raided 29 locations to serve the warrants on suspects at their homes or businesses. The arrests are the result of a two-year investigation by the Anaheim DMV Investigations office.

Based on that agency’s findings, the Orange County District Attorney’s Office filed a 167-count felony complaint against Duty Free. The complaint accuses the used-car dealership of grand theft auto, conspiracy, burglary, forgery of DMV registration documents and making false financial statements.

Arrest warrants were issued for the six key suspects, who allegedly organized a scheme to purchase and sell 207 luxury vehicles, and for 15 co-conspirators.

The company’s Costa Mesa showroom was shut down months ago. When officers served the warrant there today, they found nothing, said Pete Pierce, an Orange County deputy district attorney.

Duty Free has previously denied any wrongdoing. The company could not be reached for comment Thursday.

One of the operators charged Thursday was Quang Thanh Nguyen, a principal in the dealership. In December, Nguyen was convicted in an unrelated case of 11 felony counts for defrauding banks and auto finance companies out of more than $140,000. He has not been sentenced, and he remains in custody.