Carlsbad : Ex-Car Dealer Given 10 Years on Fraud Counts

A former North County car dealer, convicted of defrauding buyers of luxury autos, was sentenced Tuesday to 10 years in federal prison and ordered to repay $7.9 million to the victims.

Diana Devereaux, 44, of Carlsbad, was given the term by U.S. District Judge John Rhoades.

Devereaux was convicted March 18 of 60 counts of wire and mail fraud, income-tax evasion, filing false tax returns, interstate transportation of property taken by fraud and inducing interstate travel to commit fraud.

The prosecution said Devereaux operated a large-scale pyramid, or Ponzi-type scheme, aimed at people who wanted to buy luxury cars from her at cut-rate prices.

Devereaux required customers to pay for the cars well in advance of delivery, sometimes as long as six months, according to Assistant U.S. Atty. Charles Gorder Jr.

From 1981 to mid-1984, she brought in about $28 million from nearly 1,000 clients by convincing them that she could buy the cars--typically Mercedes-Benzes, but also some Porsches and BMWs--for far below market prices, usually at discounts of $10,000.

But Devereaux, a Greek citizen born in Egypt, actually bought the autos from authorized dealers and, in the waning months of her 3-year scheme, failed to deliver 185 of the vehicles.

Rhoades denied a motion by Devereaux’s attorney, Warren Williamson, that she be allowed to remain free on bail while she appeals her conviction.