PHOENIX – Seven people were arrested this month after investigators broke up an East Valley curbstoning operation. The fraudsters involved illegally produced tens of thousands of titles for vehicles being sold in 42 states.
Search warrants were served at six locations last week, including homes in Chandler and Gilbert and at a storefront in Mesa.
Scott Bandy, James Johnson, Oscar Valenzuela, James Edward Fialko and Lon Isaiah Chaneyfield were named in the criminal complaint.
The Arizona Curbstone Enforcement Joint Task Force combats vehicle sales made in violation of state laws governing dealer licensing. Curbstoning involves selling vehicles in a way that violates the parameters set by a dealer’s license. That could mean selling more than six vehicles in a consecutive 12-month period for an unlicensed dealer, or selling vehicles away from the designated area of sale for a licensed dealer.
In this case of curbstoning, licensed dealers are accused of illegally consigning their licenses out to other individuals in other states, allowing those individuals to bypass paying taxes, registration fees and laws regarding vehicle dealers. The individuals allegedly subscribed to one of several websites identified by investigators to obtain wholesale and retail dealer license credentials from the suspects, rather than the state, for a monthly fee, usually in the hundreds of dollars.
The fake credentials allowed about 1,500 individuals to attend and bid on vehicles at wholesale auctions in their states.
The operation also altered vehicle titles from these subscribers for about $100 per title to make it appear as though the individuals bought the vehicles from one of the suspects’ 31 operations with dealer licenses. More than 31,000 titles were processed this way over the past couple of years, and many of the vehicles involved were never in Arizona.
The fraudulent operation has generated around $7 million over the past couple of years for the schemers.
Each suspect is facing multiple charges, including the felonies of fraudulent schemes and artifices, money laundering and tax evasion.