9 Accused of Scam to Finance Drug Deals
Nine people were arrested Monday in what law enforcement officials said was a complex, $4-million auto theft and real estate fraud scheme, apparently intended to finance major drug transactions. Warrants were issued for six others.
One of the suspects--Artie Gilbert Sr., 40--was indicted by a federal grand jury last year on charges of defrauding banks of more than $1.4 million. That case is pending.
Investigators said that in the latest alleged scheme, more than 100 luxury cars were purchased fraudulently by the suspects and then resold to unsuspecting buyers. Investigators said the scam involved a network of phony businesses providing credit and personnel references as well as fake paper work.
Los Angeles Police Detective John Toland said suspects--including a notary yet to be arrested--established credit at lending institutions with fraudulent deeds on property they did not own. The ring allegedly set up 89 bank accounts with that credit, then bought cars that they equipped with false registrations and certificates of ownership before selling them for cash.
When the suspects stopped making payments, the lending institutions tried to repossess cars that could not be traced because of the forged paper work or because the vehicles did not exist in the first place, police said.