US v. Arthur Korn; US v. James Nance

NHTSA/Odometer Fraud (CLOSED)

Most Recent Update 10/02 (See end of document)

Interstate Auto Exchange:

6/01 Update:

On February 28, 2001, Arthur Korn pled guilty in federal district court in Kansas City, Kansas, to a one-count Information that was filed in the District of Kansas. This information charged Arthur Korn with participating in a conspiracy to commit odometer fraud and related offenses. Mr. Korn is presently not in custody.

Arthur Korn is scheduled to be sentenced by U.S. District Judge John W. Lungstrum on July 16, 2001, at 1:30 p.m. at the United States District Court, 500 State Avenue, Kansas City, Kansas. It is possible, however, that this date will change.

As part of Mr. Korn's guilty plea agreement, he has agreed to make restitution to the victims of his offense. Please note, however, that no restitution order has yet been entered by the court, and it is unclear whether Mr. Korn has the financial resources to pay restitution.

The government is in the process of attempting to locate and advise the owners of the vehicles of their legal rights and obligations. The government is mailing letters to all identifiable victims of the offenses committed by Mr. Korn to inform them of the status of this prosecution and to offer them the opportunity to notify the United States Probation Office of their losses. Those letters include the government's notification letter and a consumer declaration form. On-line versions of these documents may be accessed by clicking on the words above. The consumer declaration should be filled out and returned to the following address no later than June 29, 2001:

Please fill out this form to the best of your ability. Any additional expenses incurred as a result of owning the vehicle (for example, repairs) should also be listed. You also may include an attachment if you have additional information to submit to the probation officer. Make sure to include your name, the Vehicle Identification Number ("V.I.N."), and signature on any attachment. Due to the large number of victims notified, please call the contact person listed only if necessary.

7/01 Update:

On June 21, 2001, James Nance, pled guilty in federal district court in Kansas City, Kansas, to a three-count Information that was filed in the District of Kansas. This information charged James Nance with one count of participating in a conspiracy to commit odometer fraud and related offenses, one count of odometer tampering, and one count of mail fraud. As part of his guilty plea, Mr. Nance admitted that he was a co-conspirator with Arthur Korn in the operation of Interstate Auto Exchange. Mr. Nance is presently not in custody.

James Nance is scheduled to be sentenced by Senior United States District Judge G. Thomas Van Bebber on September 17, 2001, at 3:00 p.m. at the United States District Court, 500 State Avenue, Kansas City, Kansas. It is possible, however, that this date will change.

As part of Mr. Nance's guilty plea agreement, he has agreed to make restitution to the victims of his offense. Please note, however, that no restitution order has yet been entered by the court, and it is unclear whether Mr. Nance has the financial resources to pay restitution. As part of the sentencing process for Arthur Korn, the government is in the process of attempting to locate and advise the owners of the vehicles of their legal rights and obligations. The information obtained with respect to Mr. Korn's sentencing will also be utilized at Mr. Nance's sentencing. (If you are a victim and have already submitted a loss declaration form, you do not need to submit a second loss declaration form.)

7/16/01 Update:

The sentencing dates for both Arthur Korn and James Nance have been rescheduled. Arthur Korn is now scheduled to be sentenced by U.S. District Judge John W. Lungstrum on Monday, August 27, 2001, at 1:30 p.m. at the United States District Court, 500 State Avenue, Kansas City, Kansas. James Nance is now scheduled to be sentenced by Senior United States District Judge G. Thomas Van Bebber on September 25, 2001, at 1:30 p.m. at the United States District Court, 500 State Avenue, Kansas City, Kansas (rescheduled, see 9/24/01 Update).

9/24/01 Update:

On September 6, 2001, United States District Judge John Lungstrum sentenced Arthur Korn to 37 months in federal prison for selling cars with rolled-back odometers. Judge Lungstrum also ordered Arthur Korn to pay a criminal fine of $5,000, and to pay restitution in the amount of $43,000.11. Upon release from prison, Judge Lungstrum ordered Arthur Korn to serve three (3) years supervised release, with a special condition that Arthur Korn not operate a used car business or participate in the sale of used motor vehicles. James Nance, Arthur Korn's co-conspirator, was scheduled to be sentenced on September 25, 2001. However, that sentencing date has now been moved to October 22, 2001, at 3:00 p.m.

12/01 Update:

On October 22, 2001, United States District Judge T. Thomas VanBebber sentenced James Nance to eight months (four months in prison/four months home confinement) for participating in odometer fraud and in various insurance fraud schemes. Judge VanBebber also ordered Nance to pay $80,753.19 in restitution. Upon release from prison, Judge VanBebber ordered Nance to serve three (3) years supervised release, with a special condition that Nance not operate a used car business or participate in the sale of used motor vehicles.

3/02 Update:

Case complete, no change in status.

6/02 Update:

Case complete, no change in status.

10/02 Update:

No change in status.