1st Prison Term Given for Illegal Auto Subleasing : Crime: Laguna Beach man gets 28 months on that charge, declared a felony in California in 1989, and two other counts.

A Laguna Beach man has become the first person sentenced to state prison on charges of illegally subleasing automobiles, which was declared a felony in California in 1989.

Dennis Gireth, 31, of Laguna Beach was also charged with two other felony counts: illegally possessing a handgun and illegally possessing a small amount of methamphetamine. Gireth was sentenced to two years and four months. He could be released in 14 months on good behavior.

Joseph D’Agostino, the deputy district attorney who prosecuted the case, said Gireth’s auto subleasing charges account for only half the 28-month prison sentence.

Others charged with auto subleasing have spent time in jail or on probation, but Gireth’s sentence was harsher because of his having a previous prison record, D’Agostino said on Wednesday. Gireth had earlier been convicted of check forgery and possession of narcotics.

Gireth’s attorney, Vicki Briles of the public defender’s office, said she does not believe that Gireth knew that auto subleasing was a crime. “It’s pretty hard to know what was going on in his mind, but I bet he’ll think twice about doing it again,” she said Wednesday.

This is how auto subleasing scams work: People with bad credit pay auto sublessors between $2,000 and $5,000 to arrange for the “purchase” of a car by taking over monthly payments from the owner, who usually wants to sell a car but cannot get enough money through a normal sale to cover the outstanding car loan from a bank or finance company.

The sublessor promises that, after six months, he will pay off the car loan of the original owner and begin accepting payments himself from the buyer. However, the sublessor closes his business before six months, taking the buyer’s money and leaving him with no real legal claim to ownership of the car. Often, the original owner never recovers the car.

Gireth pleaded guilty to four counts of auto subleasing in South Orange County Municipal Court on Tuesday. He had been running a business in Mission Viejo with a Laguna Niguel man named Scott Koehler, and a warrant is out for Koehler’s arrest. He is being charged with 10 counts of auto subleasing.

Authorities from the Department of Motor Vehicles closed down the business, First Western Finance, in early April and estimated that Gireth and Koehler had made about $50,000 in their two or three months in business at that location. Koehler allegedly ran a similar scheme in Anaheim before moving to Mission Viejo, D’Agostino said.

Rande King, a senior investigator for the DMV, closed down the Mission Viejo business and said he was pleased with the Gireth conviction. “We hope it will set a precedent,” he said.