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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of West Virginia

FOR IMMEDIATE RELEASE
Wednesday, July 8, 2020

Two Individuals Plead Guilty to Roles in $4 Million Warranty Scheme

CHARLESTON, W.Va. – Frank Russo, 69, of North Carolina, entered a guilty plea to wire fraud for his role in a scheme to defraud Toyota of more than $4 million, announced United States Attorney Mike Stuart. Previously, Kevin Fluharty, 59, of West Virginia, entered a guilty plea in the same case to mail fraud concerning the same scheme to defraud. Russo and Fluharty face up to 20 years in prison and will be required to pay restitution to Toyota. Russo’s sentencing is scheduled for October 1, 2020. Fluharty’s sentencing will be held on August 24, 2020.

“What a tangled web of deception these two men wove – from fraudulently using driver’s licenses to falsifying vehicle ownership information – and seeking more than $4 million for their deception,” said United States Attorney Mike Stuart. “Crime may pay until you get caught.”

Russo was employed as service manager by a Toyota dealership in Kanawha County and Fluharty was a notary public. Russo and Fluharty admitted they were participants in a fraudulent scheme whereby a Kentucky used car dealership, Big Blue Motor Sales, bought trucks at wholesale prices at auction, obtained hundreds of copies of Kentucky and West Virginia residents’ driver’s licenses, fraudulently titled the trucks in the name of those residents, and induced the car company to repurchase the trucks at 150% of value.

The scheme relied on Russo to ensure that vehicles brought to the Toyota dealership qualified for the extended warranty extension program and relied on Fluharty to notarize documentation used in the repurchase transactions. Russo admitted that he sent false ownership information to Toyota by electronic wire in furtherance of the scheme. Fluharty admitted that he falsely notarized documents knowing that those documents would be sent through the mail to Toyota. Russo and Fluharty admitted that they received bribes or kickbacks from Big Blue Motor Sales for their participation in the scheme.

The United States Postal Inspection Service, the Federal Bureau of Investigation, the West Virginia State Police and the West Virginia Office of the Insurance Commissioner conducted the investigation. United States District Judge Joseph R. Goodwin presided over both hearings. Former Assistant United States Attorney Stefan Hasselblad and Assistant United States Attorneys Andrew J. Tessman and Steven I. Loew are handling the prosecution.

 

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Topic(s): 
Financial Fraud
Updated July 8, 2020