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160.

Sample Trial Memorandum -- Odometer Fraud

LOURDES G. BAIRD United States Attorney

ROBERT BROSIO Assistant United States Attorney 1300 United States Courthouse 312 North Spring Street Los Angeles, California 90012 Telephone: (213) 894-2434

PETER J. AINSWORTH DANIEL G. JARCHO Attorneys Office of Consumer Litigation U.S. Department of Justice P.O. Box 386 Washington, D.C. 20044 Telephone: (202) 307-0061

Attorneys for Plaintiff United States of America

STATUS OF THE CASE

A. Trial for defendant XXXXXXX XXX XXXXXXXX is set for November 5, 1991, at 9:00 a.m., before the Honorable Terry J. Hatter, Jr., United States District Judge.

B. Estimated time for trial is 3 days.

C. The defendant is not in custody.

D. Trial by jury has not been waived.

E. An interpreter will not be required.

F. The government expects to call approximately ten to twelve witnesses.

G. The Indictment is in 36 counts.

II

APPLICABLE STATUTES

Title 18, United States Code, Section 2314, provides in pertinent part as follows:

Whoever, with unlawful or fraudulent intent, transportsin interstate or foreign commerce any falsely made, forged,altered, or counterfeited securities or tax stamps, knowingthe same to have been falsely made, forged altered orcounterfeited . . . [s]hall be fined not more than $10,000 orimprisoned not more than ten years, or both.

Title 18, United States Code, Section 513(a), provides in pertinent part as follows:

Whoever makes, utters or possesses a counterfeitedsecurity of a State or a political subdivision thereof or ofan organization . . . with intent to deceive another person,organization, or government shall be fined not more than$250,000 or imprisoned for not more than ten years, or both.

Title 18, United States Code, Section 513(c) contains the following definitions to be applied to section (a) above:

(1) the term counterfeited means a document thatpurports to be genuine but is not because it has been falselymade or manufactured in its entirety . . .

(3) the term "security" means-

(B) an instrument evidencing ownership of goods,wares, or merchandise . . .

(5) the term "State" includes a State of the UnitedStates . . .

Title 15, United States Code, Section 1984, provides in pertinent part as follows:

No person shall disconnect, reset, or alter or cause tobe disconnected, reset, or altered, the odometer of any motorvehicle with intent to change the number of miles indicatedthereon.

Title 15, United States Code, Section 1990c provides that one who knowingly and willfully violates the above provision "shall be fined not more than $50,000 or imprisoned not more than three years, or both."

III

FACTS

From October, 1988 through August, 1989, XXXXXXXX XXX XXXXXXXX bought 18 late-model, high-mileage pick-up trucks, 16 through a wholesale dealer's auto auction in Albuquerque, New Mexico and two from XXX Ford in Oklahoma City, Oklahoma. XXXXXXX had the odometers on each of the 18 trucks rolled back, sometimes in excess of 50,000 miles. XXXXXXXX then sold each of these 18 trucks to XXX Ford in Norwalk, California which, in turn, sold most to lower middle-class immigrant laborers in the Norwalk area. By having the odometers on the trucks rolled back, XXXXXXXX was able to sell each truck for thousands of dollars more than he bought it.

When buying these trucks, XXXXXXXX used his own name claiming to represent XXX Motors, a licensed California dealership run by XXX. XXXXXXXX was authorized by the auction to buy and sell cars on behalf of XXX Motors as their sole representative. XXXXXXXX sold all 18 trucks operating under the business name Happy Motors. In between his purchase and sale of the trucks, XXXXXXXX created phony transactions between fictitious companies, erased mileage figures from titles and otherwise manipulated paperwork eventually submitted to the California Department of Motor Vehicles (DMV), all in an effort to hide his odometer fraud. XXXXXXXX's scheme is best illustrated by the following transactions, which form the basis for counts 12 and 30 of the indictment. On March 9, 1989, XXXXXXXX bought a 1986 Ford F-150 pick-up truck from the Ford Motor Credit Company. The purchase was made through the XXX Auto Auction with XXXXXXXX operating as a representative for XXX Motors of Glendora, California. He paid the auction $4585 for the truck, which had 80474 miles on it at the time he bought it. To make the purchase, he used a draft drawn on his account at a bank in Henning, Minnesota. When the auction's bank presented the draft to his bank, the bank debited his account $4595 (purchase price plus the price of a cashier's check) and forwarded a cashier's check to the auction's bank. The withdrawal from XXXXXXXX's account was dated April 13th; the auction's check was deposited soon thereafter.

On March 14, 1989, this truck along with others purchased by XXXXXXXX was transported by car carrier to Southern California and dropped off at the XXX Motors lot in XXX. From there it was eventually taken to XXX Ford in Norwalk, California and sold by XXXXXXXX operating under the fictitious business name of XXX Motors. XXXXXXXX sold the truck for $9300. A check from XXX Ford in that amount dated April 11th was deposited in XXXXXXXX's Minnesota account soon thereafter. At the time XXXXXXXX sold it, the truck had 48,551 miles on the odometer. In this condition, XXX Ford sold the pick-up to XXX for $12,999 under an installment contract.

When XXXXXXXX purchased the truck through the auction, he was given a certificate of title along with other ownership documents showing the transfer of ownership from Ford Motor Credit Company through the auction to XXX Motors. After the truck entered the state of California, XXXXXXXX employed XXX to "verify" it--a procedure required by state law when a vehicle is brought into the state that involves checking the vehicle identification number and mileage for accuracy--and apply for a new California title and registration. As part of this procedure, XXXXXXXX provided XXX with the title he received at the auction but failed to provide the other ownership documents which showed that the truck had been transferred from Ford Motor Company to Sierra Motors through the auction. Instead, he provided XXX with a phony transfer of title indicating that Ford Motor Credit Company sold the truck to a fictitious entity named Coast Car Rental located at P.O. Box 9111, Portland, Oregon. This document along with XXX'S verification form, both showing the new low mileage, were submitted to DMV. Within approximately 48 hours, XXXXXXXX received a new certificate of title showing that the car was now owned by XXX Car Rental. The odometer rollback was concealed because no mileage figure and no previous owners appeared on this new title.

After receiving the new title but before selling the truck to XXX Ford, XXXXXXXX created another bogus transaction by filling out a bill of sale purporting to show that the car was sold by XXX Car Rental to XXX Motors, another fictitious entity. When XXX sold the car to Mr. XXX, this bill of sale was also submitted to DMV. By the time Mr. XXX received the car, then, XXXXXXXX had created paperwork which made it appear as if the truck had been transferred from Ford Motor Credit Company to XXX Car Rental to XXX Motors to XXX Ford. Gone from the chain of ownership was XXX Motors, a real business licensed by the state of California. Also missing was any evidence that the truck had been sold through the New Mexico auction, a potential source of records showing the true high mileage.

With slight variations from vehicle to vehicle, XXXXXXXX followed the pattern described above for each of the 18 vehicles named in the indictment. In short, for each vehicle he bought at high mileage, sold at low mileage and attempted to hide his fraudulent scheme by replacing real businesses and people in the ownership chain with fictitious names and entities.

IV

PERTINENT LAW

A. Title 18, United States Code, Section 2314

(Transportation of Altered Securities)

1. Essential Elements

The essential elements of transportation of altered securities are: (1) that the securities at issue were falsely made, forged, altered, or counterfeited; (2) that the defendant transported the securities in interstate commerce, or caused them to be so transported; (3) that the defendant knew the securities were falsely made, forged, altered, or counterfeited; and (4) the defendant acted with fraudulent or unlawful intent.

2. Automobile titles are securities as defined in 18 U.S.C. {2311. United States v. Davis, 716 F.2d 1499, 1507-08 (9th Cir. 1983).

3. Alterations, in this case erasures, need not render securities invalid in order for the securities to be considered altered under 18 U.S.C. {2314. United States v. Cotoia, 785 F.2d 497, 501 (4th Cir. 1986) (citing United States v. Bowers, 739 F.2d 1050, 1057 (6th Cir.))

4. Proof that securities were altered before being taken across state lines is not necessary so long as it is established that the defendant's transportation of altered securities within state was a continuation of the movement that began out of the state. McElroy v. United States, 455 U.S. 642, 659 (1982).

B. Title 18, United States Code, Section 513

(Possession of Forged Securities of States)

1. Essential Elements

The essential elements of possession of forged securities of states are: (1) that the security was counterfeited or forged; (2) that the defendant made, uttered or possessed the security; (3) that the defendant knew the security was counterfeited or forged; and (4) that the defendant acted with fraudulent or unlawful intent to deceive another person, organization or government.

2. State title certificates that were "washed" were counterfeited under 18 U.S.C. {513. U.S. v Davis 888 F2d 283, 285

(3rd Cir. 1989), cert. granted sub nom. Moskal v. United States, 110 S. Ct. 1469 (1990).

C. Title 15, United States Code, Section 1984

(Odometer Tampering)

1. Essential Elements

The essential elements of odometer tampering are: (1) the defendant caused the odometer of a motor vehicle to be disconnected, reset or altered; and (2) that the defendant intended to change the mileage indicated on any odometer he caused to be disconnected, reset or altered.

2. Weight and Sufficiency

Evidence that the defendant purchased automobiles and kept them in his possession and control until the date on which the altered odometers were observed is sufficient to sustain a conviction under the odometer tampering statute. United States v. Brandon, 599 F.2d 112, 113 (6th Cir. 1979) cert. denied, 444 U.S. 837. The government need not identify the person or persons who actually disconnected, reset or altered the odometers in order to gain a conviction under this statute. United States v. Hugh Chalmers Chevrolet-Toyota, Inc., 800 F.2d 737, 738 (8th Cir. 1986)

D. Evidentiary Issues At Trial

1. Records of Regularly Conducted Activity:

Federal Rule of Evidence, 803(6). Custodian or other qualified witness referred to in the rule need not be an employee of the business that has custody of the document or the business that generated the document at the time of its making. United States v. Smith, 609 F.2d 1294, 1301 (9th Cir. 1979); United States v. Hines, 564 F.2d 925, 928 (10th Cir. 1977), cert. denied, 434 U.S. 1022 (1978); Itel Capital Corp. v. Cups Coal Co., Inc., 707 F.2d 1253, 1259 (11th Cir. 1983); United States v. Veytia-Bravo, 603 F.2d 1187, 1191 (5th Cir. 1979), cert. denied, 444 U.S. 1024 (1980).

2. Opinion Testimony by Agents: Federal Rules of Evidence, 701 and 704. Admission of opinion testimony by law enforcement agents is a matter within the broad discretion of the trial judge. United States v. Fleishman, 684 F.2d 1329, 1335 (9th Cir. 1982), cert. denied, 103 S.Ct. 464 (1983); United States v. Masson, 582 F.2d 961 (5th Cir. 1978).

3. Expert Testimony on Handwriting: Federal Rules of Evidence, 702, 703 and 901.A signed writing can be authenticated by the testimony of an expert witness who has compared the handwriting with the handwriting on a specimen admitted for comparison purposes. Robles v. United States, 279 F.2d 401 (9th Cir. 1960), cert. denied, 365 U.S. 836, reh. denied, 365 U.S. 890 (1961).

4. Self-Authentication: Federal Rule of Evidence, 902(1). Documents bearing a seal of any State and a signature purporting to be an attestation or execution are admissible without extrinsic evidence of authenticity.

5. Admissibility of Duplicates: Federal Rule of Evidence, 1003. A duplicate is admissible to the same extent as an original absent a real question about the authenticity of the original or other circumstances making it unfair to admit the duplicate instead of the original.

Respectfully submitted,

Dated: October __, 1991 LOURDES G. BAIRD United States Attorney

_____________________________ PETER J. AINSWORTH Attorney Office of Consumer Litigation Department of Justice (202) 307-006555