A federal grand jury has returned indictments on charges of mail and wire fraud against a New York auto freight broker in connection with a scheme that federal investigators say bilked customers out of hundreds of thousands of dollars.
The indictment alleges that from 2007 to 2014, Gregory Sclafani, 62, of Southampton, N.Y., engaged in a scheme to defraud consumers by advertising long distance auto transport on the internet, according to a release from the Office of Inspector General.
The investigation has identified at least 100 victims who have been double-billed for the service or defrauded, via the unauthorized bank account withdrawals, with a monetary loss to consumers of approximately $600,000.
A criminal complaint alleges that from January 2008 to his arrest, Sclafani, the owner of various auto transport broker entities, engaged in a scheme to defraud consumers by advertising long-distance auto transport on the Internet. After consumers booked the trips and deposited funds, their cars were often not shipped and Sclafani absconded with their money. Additionally, it is alleged that Sclafani routinely committed bank fraud by withdrawing money from customers' bank accounts without their authorization or knowledge.
The OIG release notes that the interstate transport of vehicles by brokers is regulated by the Federal Motor Carrier Safety Administration, which had previously revoked Scalfani’s operating authority under at least one company – A USA Logistics – in January 2012.
The release states that despite the revocation, Sclafani created a new brokerage entity, named New Logistics LLC, which did not have FMCSA operation authority. The company’s business address in North Carolina was later found to be a graveyard. Authorities estimate Sclafani has created as many as 45 differently named companies for engaging in his fraudulent activities.
The New York State Attorney General’s Office already has a pending civil contempt action against Sclafani for similar fraudulent vehicle transport brokerage schemes. That complaint stems from an October 2011 settlement in which Sclafani agreed to a stipulated settlement requiring, among other things, that he be permanently barred from participation in the business of auto transport brokerage. The OIG release states that to date, Sclafani has not certified his compliance with said stipulated settlement.
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