December 16, 2011
Case # 08CF2755
PART-OWNER AND TWO MANAGERS OF DOUGLAS NISSAN SENTENCED FOR DEFRAUDING CUSTOMERS AND BANKS IN THEFT CONSPIRACY *A fourth co-defendant is a fugitive in this case
SANTA ANA - A part-owner and two managers of Douglas Nissan in Orange were sentenced today for their role in an elaborate conspiracy to steal unsuspecting customer identities and defraud banks in the sale of used cars. Part-Owner Frank Ignacio Urbano, 57, Anaheim, and desk managers Luz Belem Corral, 29, Costa Mesa, and Kevin Allen DeRosier, 31, Anaheim, pleaded guilty May 6, 2011, to felonies including 43 counts of forgery, 31 counts of grand theft, and two counts of conspiracy. Corral additionally pleaded guilty to one felony count of perjury by declaration. Urbano was sentenced to one year in jail and 10 years in state prison suspended pending successful completion of five years of formal probation. DeRosier was sentenced to 240 days in jail and five years of formal probation. Corral was sentenced to 360 days in jail and five years of formal probation.
A fourth defendant is a fugitive with a $2 million warrant in this case. Marwan Abdellatif, 49, formerly of Lakewood, was charged Nov. 5, 2010, with one felony count of failing to appear in court. He is also charged in the Douglas Nissan case with 43 felony counts of forgery, 31 felony counts of grand theft, one felony count of conspiracy to defraud another of property, and one felony count of conspiracy to commit a crime. If convicted, he faces a maximum sentence of 38 years in state prison. Anyone with information regarding his whereabouts is asked to call their local police department's non-emergency number or Supervising District Attorney Investigator Eric Akerlind at (714) 347-8691.
ORIGIN OF CASE
In April 2007, the Orange County District Attorney's Office (OCDA) began investigating possible fraudulent activity at Douglas car dealerships. The OCDA discovered that between 2005 and 2007, more than two dozen relevant police reports were filed with the Orange Police Department regarding Douglas Nissan of Orange. More than 100 complaints had been filed with the DMV and Better Business Bureau about Douglas Nissan and the other dealerships for unfair business practices.
Investigators from the OCDA searched Douglas Nissan at 1140 West Katella Avenue in Orange on July 9, 2007. Evidence was seized including two computers, electronic data from four additional computers, and approximately 350 boxes containing approximately 12,000 car transaction dealer jackets. Each dealer jacket contained several documents including contracts, credit reports, applications, warranty and insurance information, and other documentation relevant to the sale or lease of a vehicle. The felony charges in this case represent only the most egregious acts, focusing on 31 fraudulent transactions and representing a small percentage of the large volume of evidence.
At the time of the crime, Urbano was a minority share owner and general manager of Douglas Nissan responsible for day-to-day operations. Corral, DeRosier, and Abdellatif were desk managers who supervised dealership sales staff, secured documentation and financing for vehicle sales, and signed off on all car sale deals.
Between February 2005 and June 2007, the defendants participated in an elaborate ongoing conspiracy to sell used cars at prices above their value to drive up the cost of monthly payments by the customer. They participated in illegal business practices by submitting false loan information to defraud lenders and defrauded vulnerable customers by securing unaffordable loans in the customer's name.
When making a lending decision related to the purchase of an automobile, banks rely on Kelley Blue Book to determine the value of a vehicle. In order to justify high loan values for cars on their Douglas Nissan lot, the defendants falsified electronic Kelley Blue Book records by overstating the value of certain vehicles and falsifying features of the car. They defrauded the banks out of an estimated $911,500 in financing through the submission of the falsified records. Eight known banks and lending institutions were defrauded in the scheme. Bank of America, who had received dozens of identity theft affidavits from consumers, had stopped conducting business with Douglas Nissan in June 2007 because of the high number of fraudulent vehicle loan packages from the dealership. The other seven banks and institutions included Americredit Financial Services, Capital One Auto Finance, Nissan Motor Acceptance Corporation, NuVision Federal Credit Union, Wachovia Financial Services, Wells Fargo Bank, and Wescom Credit Union.
In addition to the banks, the increased loan also victimized customers. Urbano, Corral, DeRosier, and Abdellatif primarily targeted Spanish speaking customers who did not have proper identification or understand the process of buying a vehicle. They obtained or created false identities and assigned the identities to customers without their knowledge in order to qualify for higher loans. They created fake customer pay-stubs to support the falsified claim of higher income. The defendants encouraged victims to sign loan and purchase documents that had not been completed, and later filled in the documents with information that overstated the victims' loan payment abilities.
The defendants intentionally overstated the income of customers without the customer's knowledge in order to qualify the victim for a higher loan. In many cases the victims could not afford the payment on the higher loans and lost their cars. The defendants engaged in "loan packing," or having customers purchase extra insurance and warranty coverage by deceiving them about the amount charged for add-on items.
Victims also included non-customers, whose identities had been stolen and used to purchase cars. This resulted in victims with loans and vehicles in their names about which they did not know and to which they did not consent. In some cases, the defendants misled victims into believing they were acting as a reference for another customer, and instead used that victim as a co-signer without the victim's knowledge. These victims were left with the responsibility of the high loan if the original customer defaulted on the payments.
In addition to the conspiracy, Corral also committed perjury for using a fake social security number on her application for a sales license, which is required in order to sell cars.
Senior Deputy District Attorney Doug Brannan of the Major Fraud Unit prosecuted this case.