US v. Mikhail Gokhman, et al.

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US
v. Mikhail Gokhman, et al.


NHTSA/Odometer Fraud

Most recent update 1/13/11 (See end of document)

7/27/07 Update:

United States v. Mikhail Gokhman, Yan Hershman, Edvard Khakhan, 2:07-cr-00017 (E.D. Pa)

 On January 11, 2007, a federal grand jury in Philadelphia, Pennsylvania, returned an indictment charging Mikhail Gokhman, Edvard Khakhan and Yan Hershman with thirty-six felony counts for their participation in an odometer fraud scheme. The indictment charges that Gokhman, Khakhan, and Hershman bought high-mileage vehicles, rolled back the odometer readings on these vehicles, altered the titles to reflect lower-mileage odometer readings, and sold the vehicles at wholesale automobile auctions, directly to automobile dealers, and on Internet auction websites. The indictment charges the men with conspiracy, wire fraud, securities fraud, and giving false odometer statements. Hershman was also charged with four counts of using a fraudulently obtained Social Security number to open bank accounts used in the odometer scheme. A copy of the Indictment can be found here.

On January 31, 2007, Gokhman and Hershman were arrested. Both entered not guilty pleas. Hershman is detained without bond. Gokhman was released on a $250,000 bond.

Khakhan remains at large.

There is no current trial date.

Over 600 owners of vehicles that are linked to this roll-back scheme have been notified under the Crime Victims’ Rights Act by the U.S. Attorney’s Office in the Eastern District of Pennsylvania. Also notified were insurance companies and automobile dealers who are victims of the scheme.

A related case, United States v. James Russell Bradbury, 1:CR-05-407 (M.D. Pa.) was resolved and a summary of that case can be viewed under Closed Cases on this website.

12/18/07 Update:

No change in status.

3/26/09 Update:

No change in status.

12/31/09 Update:

On September 18, 2007, defendant Mikhail Gokhman pled guilty to one count each of conspiracy, mail fraud, and securities fraud, and two counts of false odometer statements.  On October 2, 2008, Mikhail Gokhman was sentenced to 120 months’ imprisonment and was ordered to pay $4,098,165 restitution.  Upon his release from prison, he will be placed on three years of supervised release, during which time he is not to be involved in any business related to the purchase or sale of automobiles.

On September 18, 2007, defendant Yan Hershman also pled guilty to one count each of conspiracy, securities fraud, wire fraud, false odometer statements, and use of a social security number based on false information.  On July 16, 2008, Yan Hershman was sentenced to 48 months' imprisonment and ordered to pay $3,046,012 restitution.  Because he is an illegal alien, he will be deported to Israel after serving his sentence.

On June 4, 2009, a 39-count Superseding Indictment was returned by the grand jury.  Edvard Khakhan, a defendant in the original Indictment, and Yakov Babchinetskiy, were charged with conspiracy, securities fraud, wire fraud, and false odometer statements in the same odometer fraud scheme as set forth above.  Yakov Babchinetskiy was arrested on September 23, 2009.  He entered a plea of not guilty and was released on a $250,000 bond, with 24-hour home detention and electronic monitoring.  He is pending trial.  Edvard Khakhan remains at large.  Upon Yakov Babchinetskiy’s arrest, the government filed a motion, which the court granted, asking that the documents related to the guilty pleas and sentencings of Mikhail Gokhman and Yan Hershman be unsealed.  Yakov Babchinetskiy’s arrest also triggered the unsealing of the Superseding Indictment.

4/20/10 Update:

No change in status.

1/13/11 Update:

On September 14, 2010, defendant Yakov Babchinetskiy pled guilty to one count each of conspiracy and wire fraud, and two counts of false odometer statements. On January 11, 2011, Yakov Babchinetskiy was sentenced to 100 months’ imprisonment and was ordered to pay $4,098,165 restitution. Upon his release from prison, he will be placed on three years of supervised release, during which time he is not to be involved in any business related to the purchase or sale of automobiles.