New DMV Drive Against Illegal Auto Leasing : Fraud: A Garden Grove man is arrested in a raid at the office of the Greater California Acceptance Group in Santa Ana. A top investigator says more arrests are forthcoming.

A Garden Grove man was arrested and three vehicles were seized Tuesday in a raid that a state Department of Motor Vehicles investigator said was the opening shot in a stepped-up war against illegal auto subleasing.

Senior DMV investigator Rande King said a search of records at the office of Greater California Acceptance Group in Santa Ana also turned up evidence linking the operation to fugitive Thomas Charles Carter of El Toro, whom the DMV has linked to a number of subleasing businesses.

King and other DMV investigators have been looking into auto subleasing activities since 1986. A 1988 state law made many subleasing activities a criminal offense.

DMV officials say scores of victims have lost tens of thousands of dollars to unscrupulous subleasing companies.

Since November, DMV agents have arrested six Southland subleasing company operators or employees and issued warrants for two others, including Carter, who still are fugitives.

The subleasing companies apparently are fighting back, however. King was sued last month, accused of assault and battery and false imprisonment, by employees of a defunct Diamond Bar subleasing company that the DMV raided in April.

The suit was filed by Santa Ana attorney Steven Zwick, who also represents one of Carter’s former subleasing partners and who has twice filed unsuccessful motions in Orange County Superior Court to overturn the law making such commercial subleasing operations illegal.

King termed the suit a harassing tactic.

“It won’t change anything,” he said. “We don’t intend to stop any valid investigations of these subleasing businesses, whether they involve these parties or others. We are investigating, and we will be making more arrests in the future.”

Auto subleasing businesses operate by matching people who can’t qualify for car loans with car owners who are trying to sell their vehicles. They typically promise to obtain loans for the would-be buyers if the buyers are allowed to sublease the cars for six months to prove their creditworthiness.

In an illegal operation, potential buyers are told to send monthly payments to the seller so the seller’s financing source doesn’t know the car has been sublet.

Under state law, it is a criminal offense for anyone not party to an auto lease or sales agreement to arrange or assist in arranging for the vehicle to be subleased without the knowledge and consent of the lender.

King said victims of the car subleasing scams include would-be buyers who pay loan fees and never receive loans and sellers who have had cars repossessed because the sub-lessee quit making payments.

Tuesday’s raid was based on a complaint from an Anaheim man whose 1987 Buick was subleased by Greater California Acceptance.

The man, who asked for security reasons that his name not be used, said in an interview Wednesday that the sub-lessee made only one payment and abandoned the car after blowing up the engine.

When the car was recovered, its tires and custom wheel covers were missing, and there was minor damage to the body.

The victim said it has cost him $1,800 for tires, wheels, body work and to make up the payments the sub-lessee didn’t make. He said his extended warranty covered “more than $1,000 in engine repairs,” for a total loss of nearly $3,000.

Arrested in Tuesday’s raid at Greater California Acceptance was William Tieman, 45, whom King identified as an employee of the Santa Ana firm and a former employee of two other auto subleasing operations in Orange County--both of which have shut down.

One of those businesses, Consumer Consultant Network in Garden Grove, also was searched Tuesday by DMV agents. King said it appeared that the office had been shut down.

Tieman, released on his own recognizance Wednesday morning, was booked into Orange County Jail Tuesday on suspicion of illegal auto subleasing, a felony.

King raided a Diamond Bar subleasing operation on April 30 and arrested one employee, a 20-year-old Garden Grove man, Michael Wayne Pedersen, who subsequently has been charged with a misdemeanor count of illegal subleasing.

Within three weeks of the arrest, Zwick filed the assault and false imprisonment suit against King.

Zwick, who could not be reached for comment Wednesday, also represents one of the first subleasing operators arrested in Orange County--Robert Jay Papkin.

Papkin, 34, of Costa Mesa, was a partner with Carter in U.S. Financial, a defunct Santa Ana subleasing operation.

Papkin waived a preliminary hearing and, after Zwick lost two bids to have the charges dismissed, is scheduled to begin trial in Orange County Superior Court in September.

If found guilty, he faces probation violation charges in Orange County on a 1987 conviction for receiving stolen property, King said.