#CAR DEALER CHARGED WITH MONEY LAUNDERING

Latest News Dealer Faces Money Laundering Charges A used-car dealer and two associates in Commerce City, Colo., were arrested for structuring and money laundering. Raul Mendoza, Julia Castillo-Caraveo, and Isidro Noe Mendoza-Ortiz, were named in a sealed indictment returned by a federal grand jury in Denver on Feb. 14. In addition to the three arrests, agents and officers executed search warrants at a residence and an automobile business. Twenty automobiles with clear titles from the car dealership were seized. According to the indictment, beginning in February 2008, and continuing through May 2012, Mendoza and Mendoza-Ortiz conspired with each other and others to structure currency by depositing transactions with the intent to evade the reporting requirements as required by law. Daily cash receipts from Mendozas business, Chopeque Auto Sales, were received at the business and structured into separate accounts at various banks to avoid the $10,000 reporting requirements. From Feb. 26, 2008 through May 29, 2012, they structured over 700 deposits totaling $4,543,714. As part of the conspiracy, on June 4, 2011, Mendoza, Mendoza-Ortiz and Caraveo knowingly caused Chopeque Auto Sales to fail to file a Federal IRS Form 8300, a report required by law for all currency transactions over $10,000 received by a business. Particularly, they sold a 2004 Dodge Ram 1500 in exchange for $10,500 that was represented by undercover law enforcement officers to be the proceeds of drug distribution and that they did so with the intent to conceal the nature of the proceeds of the specified unlawful activity and to avoid IRS Form 8300 reporting requirements. On March 8, 2012, Mendoza and Castillo-Caraveo followed a similar pattern and sold a 2008 Chevrolet Silverado 1500 in exchange for $20,900 that was represented by undercover law enforcement officers to be the proceeds of a drug distribution; no IRS From 8300 was filed. The defendants conspired to conceal the nature and source of the specified unlawful activity and attempted to launder drug proceeds. Particularly, Chopeque Auto Sales sold automobiles to known drug dealers, prepared false documents relating to the sale of vehicles to known drug dealers, structured currency deposits to conceal the source, falsely claimed to law enforcement authorities to be a valid lien holder of a seized vehicle in order to assist a known drug dealer in seeking the return of the vehicle. Upon conviction of the offenses above, they shall forfeit to the United States all of the defendants right, title and interest in all property, real or personal, involved in such offenses, or all proceeds traceable to such property, for which the defendants are joint and severally liable. Mendoza was charged with three counts of structuring and three counts of money laundering. Castillo-Caraveo was charged with two counts of structuring and three counts of money laundering. Mendoza-Ortiz was charged with two counts of structuring and two counts of money laundering. If convicted, each count of structuring and money laundering carries a penalty of not more than 10 years in federal prison, and a fine of up to $500,000. Agents with IRS-Criminal Investigation (IRS-CI), the Drug Enforcement Administration (DEA) and the Department of Homeland Security investigated this case. In addition, Denver Police Department, Commerce City Police Department, Thornton Police Department, and Department of Revenue Auto Industry Division assisted in the execution of the warrants.

BUY HERE PAY HERE LOTS STRONGEST MARKET SHARE

Latest News New Car Terms Hit High; Used Terms Flat Experian Automotive released data that shows average loan terms for a new vehicle in the fourth quarter jumped to an all-time high of 65 months, up from 63 months in the fourth quarter of 2011. Terms for used vehicles stayed flat at 60 months. Findings from the State of the Automotive Finance Market analysis showed that the average interest rate for new and used vehicle loans dropped in Q4, and average monthly payments dropped versus the same time period in Q4 2011. The report also showed that the average loan amount for a new vehicle was $26,691 in the fourth quarter, up $272 from the fourth quarter of 2011, while the average used vehicle loan was $17,629, up $239. However, while consumers are taking out larger loans, lower interest rates and longer loan terms for new vehicles helped bring down the average monthly payments. For example, the average interest rate for a new vehicle loan in the fourth quarter dropped to 4.36 percent, from 4.52 percent in the fourth quarter of 2011, while the average interest rate for a used vehicle loan dropped to 8.48 percent, from 8.67 percent. Additionally, the average monthly payment for a new vehicle dropped to $460 from $468. More consumers also were able to obtain financing in Q4, as average credit scores for both new and used vehicles dropped. For new vehicle loans, the average consumer credit score was 755 in Q4 2012, down six points from Q4 2011. For used vehicle loans, the average consumer credit score dropped to 665 in Q4 2012, down five points from Q4 2011. Automotive loans for new vehicles with terms from 73 to 84 months increased by 19.4 percent over the fourth quarter of 2011. New lease share of new financing increased to 24.79 percent, up from 10.45 percent. The total subprime market for all new vehicle financing increased to 24.77 percent, up from 22.59 percent in the fourth quarter of 2011. The total subprime market for all used vehicle financing increased to 55.4 percent, up from 53.58 percent. Buy-here, pay-here organizations and credit unions showed the strongest market share growth of 4.3 percent and 3.9 percent for overall automotive loans. Banks have the highest market share of automotive loans at 41.2 percent.

MISSOURI CAR DEALER CHARGED WITH ODOMETER FRAUD

Missouri Attorney General Chris Koster filed criminal charges against a Springfield, Mo., used-car dealer for misrepresenting the true mileage on two cars he sold. Ashley Bolton, owner of Excel Auto Group, is charged with two counts of unlawful merchandising practices. The attorney general's investigation revealed that in 2011 and 2012, Bolton misrepresented the actual mileage of vehicles being offered for sale by Excel to two different consumers. In one count, Bolton allegedly bought a car with more than 180,000 miles then sold it representing it had 99,000 miles. In the other case, Bolton bought a car with nearly 220,000 miles then sold it less than a month later with 119,000 miles. Unlawful merchandising practices is punishable by two to four years in the Department of Corrections, or up to one year in the county jail, and/or a fine up to $5,000 or double the amount the defendant gained from the commission of the crime, not to exceed $20,000. The Missouri Department of Revenue and the Office of Odometer Fraud in the National Highway Transportation Safety Administration assisted Koster's office in the investigation. The AG's office also has a civil investigation against Bolton underway. The charges were announced during National Consumer Protection Week. Attorney General Chris Koster announced he was using the event to highlight areas where consumers can protect themselves from scammers, including when purchasing a used car.

CARS SALES SAME EVEN WITH HIGHER TAXES

f Higher Taxes For the month of February, Kelley Blue Book analysts predict new-car sales will maintain the momentum from the previous three months and hit 15.3 million seasonally adjusted annual rate (SAAR), a 3.4 percent year-over-year improvement. Although shy of the 14 percent annual gain the auto industry experienced in January, sales should improve more than 7 percent after adjusting for the number of selling days in February. Although sales are expected to maintain a steady course in February, a recent Quick Poll among in-market car shoppers conducted by Kelley Blue Book 's Market Intelligence team indicates that many consumers are beginning to feel the pinch from the expiration of the 2 percent payroll tax holiday. When asked if the increase in the payroll tax impacted their new-vehicle purchase timeline, 39 percent indicated that they planned to delay their purchase, 28 percent responded that the tax increase didn't impact their purchase timeline in any way, while 27 percent indicated that they would reduce the amount they planned to spend on their next purchase.

IPHONES AND COMPUTERS OVER WHEELS

eNews Millennials Favor Phones over Wheels Zipcar, Inc. released the findings of an independent study of Millennials (18- to 34-year-olds), which examines the attitudes and behaviors of this generation related to urban transportation, technology and car ownership. Overall, the study found that the increasing availability of on-demand mobility services (such as car sharing, ride sharing and vehicle sharing) helps many Millennials drive less and makes it easier to for them to live without owning a car. The study, conducted in December by KRC Research, reveals that mobile devices and on-demand transportation apps are more important to Millennials than car ownership: Nearly two in three (65 percent) of Millennials say losing their phone (30 percent) or computer (35 percent) would have a greater negative impact on their daily routine than losing their car (28 percent). One in four Millennials (25 percent) say transportation apps have reduced their driving frequency, compared to less than 12 percent of those 45+. Considering how youth has changed over the years. The baby boomers saved their money and could not wait until their 16th birthday in order to drive. The new generation places the importance of wheels at the bottom of their lists.

USED CAR SALES SLOWING DOWN

Used Car Sales Slow Used car sales are expected to slow this month. Edmunds.com estimates that 3.35 million used cars will be sold in February, for a SAAR of 37.2 million (compared to 3.12 million - or a SAAR of 38.7 million - used car sales in January). Edmunds.com forecasts that 1,198,538 new cars and trucks will be sold in the U.S. in February for an estimated SAAR this month of 15.5 million light vehicles. The projected sales will be a 14.9 percent increase from January 2013, and a 4.3 percent increase from February 2012. Retail SAAR will come in at 12.4 million vehicles in February, with fleet transactions accounting for 20.3 percent of total sales. Considering the fact that fuel prices are rising unemployment is staying the same and income tax refund checks are being delayed dealers are feeling the pitch and prices of used vehicles are expected to topple.

USED CAR DEALER ARRESTED

Police Arrest Dealer for Not Paying Tax A former Florida used-car dealer has been arrested on charges that he stole more than $130,000 in sales tax he collected from customers, but failed to send in to the state. Biel Semexant, Jr., the former owner of Smart Carz, LLC, and Auction Access USA, was arrested by the Broward County Sheriff's Office on Dec. 4 on felony charges relating to theft of state funds, filing a false or fraudulent return, and failure to file six consecutive returns. If convicted, he faces up to 15 years in prison and up to $10,000 in fines, as well as possible repayment of stolen tax, interest, penalty and investigative costs. Semexant's dealerships were located on North Dixie Highway in Wilton Manors. According to Florida Revenue Department investigators, Semexant collected tax from customers at both of his former dealerships. However, during various periods beginning in 2006 and lasting through periods in 2012, he failed to send in to the state all of the sales taxes that he had collected or file tax returns as required by law. Under state law, sales tax is the property of the state at the moment of collection.