Trio from Kentucky charged in alleged $4M warranty fraud scheme
A federal grand jury in West Virginia has indicted three people from Kentucky in an alleged scheme to defraud a major car company of more than $4 million.
Federal prosecutors say James Pinson, 44, Gary Conn, 56, and Tammy Newsome, 53, of Kentucky, are each charged with ten counts of fraud and identity theft.
According to the indictment, the trio organized and participated in a scheme to misuse a car company’s warranty extension program. The program offered to repurchase certain trucks for 150 percent of their value, so long as those trucks were owned by individual customers rather than a dealership.
Participants in the scheme bought the trucks at wholesale prices through auction at Pinson’s car dealership, Big Blue Motor Sales in Louisa, Kentucky.
They then allegedly obtained hundreds of copies of Kentucky and West Virginia driver’s licenses, fraudulently titled the trucks in the name of those residents, and were then able to get the car company to repurchase the trucks at 150 percent of the value.
According to United States Attorney Mike Stuart's office, the trio ran 350 trucks through the scheme between 2013 and 2015, causing approximately $4.3 million in losses to the car company.
Newsome is also charged with aggravated identity theft.
Frank Russo, 68, of North Carolina, and Kevin Fluharty, 58, of West Virginia, have also been indicted for their roles in the same scheme.
If convicted, the three defendants face up to 30 years in prison.
“This is the second indictment setting forth very serious allegations of a long-term warranty fraud scheme,” Stuart stated in a press release. “Five individuals have now been charged in connection with the alleged fraud scheme that resulted in $4 million in losses.”