NHTSA/Odometer Fraud (CLOSED)
Most Recent Update: 12/04 (See end of document)
2/01 Update: Briefs in the case before the Fourth Circuit Court
of Appeals were filed by both sides in August and September 2000, and
the matter is now pending, oral argument tentatively set for April 2001.
General Information: In 1998, multiple defendants were sentenced
after being convicted by a jury or pleading guilty in the United States
District Court for Maryland, US v. Theodore Schecter, et al.
(Dkt. No. Cr. CCB-96-0362).
Asset forfeiture proceedings were instituted by the United States to
recover monies for restitution. A third-party claim was filed against
one of the properties in the restitution proceeding. Although we succeeded
in defeating that claim in the district court, that decision was appealed
to the U.S. Court of Appeals for the Fourth Circuit, US v. Lee Parsons
(Dkt. No. 00-1707).
In November 1998, identified victims of the fraud were notified and
invited to submit petitions for remission pursuant to 28 C.F.R. § 9.1
- 9.9, which provides for the use of forfeited property to provide restitution
to qualified victims. The Department of Justice will make a determination
on the petitions after the conclusion of Court proceedings in US
v. Schecter v. Parsons (see below)..
6/01 Update:
United States v. Schecter v. Parsons, (4th Cir., May 24, 2001,
Dkt. No. 00-1701). On May 24, 2001, the Fourth Circuit affirmed a forfeiture
judgment in this case. After a jury trial in summer 1997, the jury found
that defendant Schecter had used illegally laundered money to purchase
a specific piece of property. In the forfeiture proceeding, a third-party
(Lee Parsons) claimed an interest in the property, claiming that the
defendant was in default on a land installment contract, giving the
claimant a superior interest in the property. The claimant also asserted
he had reacquired the property in good faith. The Fourth Circuit accepted
the government's arguments that it had recognized and paid for the claimant's
interest when the property had been sold. As a result, the balance of
the funds from sale of the house ($130,000) are available to compensate
victims of the offenses. The process of working out the details of restitution
is ongoing. The court's opinion is available at the court's website:
http://207.41.17.117/ISYSquery/IRLEDEE.tmp/1/doc
9/01 Update:
No restitution made to date, still awaiting resolution of details surrounding
process, see 6/01 Update.
12/01 Update:
No restitution made to date, still awaiting resolution of details surrounding
process, see 6/01 Update.
3/02 Update:
No restitution made to date, analyzing and evaluating data for eligible
claimants.
Update 6/02:
Final review of restitution petitions underway in preparation of payment
to victims.
Update 9/02:
Final review of restitution petitions still underway in preparation
of payment to victims.
Update 12/02:
Final review of restitution petitions still underway in preparation
of payment to victims.
Update 3/03:
Final review of restitution petitions still underway in preparation
of payment to victims.
Update 6/03:
Final review of restitution petitions still underway in preparation
of payment to victims.
Update 11/03:
Final review of restitution petitions still underway in preparation
of payment to victims.
Update 2/04:
Eligible claimants were notified in November 2003 of expected monies
to be sent to them. The U.S. Marshals' Office in Baltimore, Maryland
is gathering the Schecter forfeited funds and will prepare checks to
be sent to claimants after all the monies are secured.
Update 8/04:
The case status information above covers a period from 2001 to the
present. This case began 1996, when an indictment named 11 individuals
as defendants in an odometer tampering conspiracy. In August 1997, after
a six week trial, a Baltimore jury convicted Theodore Schecter and others
on conspiracy, odometer tampering, securities, and money laundering
charges that grew out of a decade-long odometer roll-back scheme that
involved thousands of vehicles and $5,000,000 to $10,000,000 in consumer
fraud. The jury also acquitted three of the defendants. Schecter was
facing a lengthy prison term when he failed to appear for his scheduled
December 1997 sentencing. After almost seven years on the lam, Schecter
was arrested in Atlantic City, New Jersey, on July 31, 2004, and will
now be sentenced. His wanted poster is on the FBI web page at: http://www.fbi.gov/mostwant/fugitive/july2004/julyschecter.htm
.
Update 9/04:
Sentencing has been scheduled for November 19, 2004, at 2:30 p.m. Sentencing
will occur at the Federal Court in Baltimore, Maryland, 101 West Lombard
Street, in the Courtroom of the Honorable Catherine C. Blake.
Update 12/04:
On November 19, 2004, Theodore Schecter's sentencing went forward before
Judge Catherine C. Blake. Schecter received a prison sentence of 97
months (8 years and one month). The court departed downward from the
range called for by the money laundering guideline, finding the case
to be outside the heartland of money laundering cases, and stating that
the range overstated the seriousness of the conduct.
In March 2004, the Court had entered a forfeiture order for $5.5 million;
401 consumer victims received restitution totaling $409,348 from funds
generated by the sale of forfeited property.
** If you submitted a petition, and your address has changed since
November 1998, please contact us by sending an e-mail to Consumer.Litigation@usdoj.gov.
You should note in the "Subject" line the word "Schecter"
and include in the text of your e-mail the VIN (Vehicle Identification
Number aka serial number which consists of the 17 alpha-numeric
characters) of your car.
