17 Are Arrested in Alleged Car Scam

An automobile-fraud scheme that cost Southern California banks and dealerships $8.5 million has been unraveled after a two-year investigation the DMV called the largest in its 89-year history, authorities said Thursday.

Seventeen people were arrested and 23 vehicles -- including Hummers, Jaguars and Cadillacs -- were seized as evidence in a series of predawn raids Thursday in Orange and Los Angeles counties, police said.

“This is a well-organized, complex, large scheme to steal cars to line these people’s pockets,” Orange County Dist. Atty. Tony Rackauckas said during a news conference at the Orange County Fairgrounds. “They relied on the complexity and the massiveness of their crimes, knowing that law enforcement resources are tight and hoping that it would help them escape punishment.”

Parked behind him were eight of the confiscated vehicles, including a white, two-seat Lexus and a Toyota Sequoia.

More than 120 officers from 16 law enforcement agencies, including dozens of investigators from the state Department of Motor Vehicles, participated in the investigation.

The six main suspects could be sentenced to up to 50 years in prison if convicted of charges including grand theft auto and conspiracy. They are Quang Thanh Nguyen, 28; Martin Thien An Nguyen, 26; Paul Nguyen, 30; Thang Phuc Le, 30; Nghia Thong Phan, 26; and Tya Thuy Le, 25.

Phan is still at large. Quang Thanh Nguyen was already in custody after being convicted in December of unrelated charges, including grand theft auto, identity theft and forgery.

Police accuse the six suspects of devising a complex plot that involved their company, Duty Free Car Payment in Garden Grove, recruiting “straw buyers” through Vietnamese-language newspapers with the promise of no-interest car loans for up to $40,000.

Those buyers went to dealerships armed with false credit reports and bought vehicles that they turned over to Duty Free, police said.

Most of the buyers would purchase $300,000 to $500,000 worth of vehicles in a month, for which they would be paid $20,000, said Deputy Dist. Atty. Pete Pierce.

A Duty Free employee would then falsify the DMV registration document to transfer ownership to the firm and lease it at a normal price to people with poor or borderline credit, Pierce said.

Although Duty Free would make the payments on the cars to the original dealerships for a couple of months, eventually they would stop, forcing the lender or the dealer to take the loss, Pierce said.

A complaint from a Fountain Valley bank in January 2002 sparked the investigation, said Doug Brenn, the DMV’s chief investigator handling the case.

Police are still looking for the roughly 200 vehicles that have been leased. The people who leased them will not face charges of receiving stolen property, although their vehicles will be taken and probably returned to the dealerships, Pierce said.

The alleged scheme serves as a lesson for consumers to be skeptical of things that seem too good to be true, Brenn said.

“These are people who never would have normally qualified for those loans,” he said.

“More than likely, these people realized there was something wrong but did it anyway.”