US v. Theodore Schecter, et al.

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.

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.Protection@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.