As consumers, most of us understand that cars with a lower mileage fetch higher prices upon resale. But in the $153 billion used car industry, dealerships are often tempted by the exponential profitability of that lower mileage when selling to an unsuspecting public or auction facility. Consequently, odometer fraud is rampant in the used car industry.
Last month, Brooklyn used car dealer Shmuel Gali was sentenced to 5 years imprisonment for odometer tampering and money laundering. Last August, he pleaded guilty to charges of conspiracy to commit odometer tampering, making false odometer statements, money laundering, and securities fraud.
He was also ordered to pay $3,936,000 in restitution to those he defrauded and paid inflated prices because of his scheme.
Gali and his brother were charged with offenses related to odometer tampering and money laundering that affected the mileage of nearly 700 cars they sold, some as early as 2006, through at least the year 2011.
What is Odometer Fraud?
Odometer fraud is the unlawful practice of disconnecting or altering a motor vehicle’s odometer with the intention of changing the mileage. The National Highway Traffic Safety Administration has estimated that over 450,000 vehicles are sold on an annual basis with odometer falsifications and costs consumers billions of dollars each year.
Organizations and individuals that engage in odometer fraud typically roll back odometers and then resell or wholesale them to the public, getting a higher price for the cars based on a lower mileage. In the case of the Galis brothers, they created an elaborate scheme of tampering and money laundering, providing buyers with titles bearing mileages sometimes more than 100,000 miles less than the actual mileage of the vehicle.
What Does the Law Say?
Because of the widespread nature of odometer fraud and its immense cost to consumers, the federal government has made it a felony with serious consequences. Under U.S. Code §32703, known as the Federal Odometer Law, it is unlawful to
- Advertise, sell, use, install, or have installed any device that alters the odometer of a vehicle
- Disconnect or otherwise alter an odometer of a vehicle
- Operate a motor vehicle with the intent to defraud, knowing that the odometer has been altered
- Conspire to violate the odometer fraud laws
Individuals charged with rolling back mileage, disconnecting an odometer, or otherwise tampering with an odometer can find themselves in serious trouble, often facing criminal as well as civil penalties.
Anyone who alters an odometer is also often committing other separate offenses under federal laws, which will be added to the federal criminal penalties for odometer tampering.
Getting Skilled Legal Assistance
It’s critical to understand that if you have been charged with odometer fraud offenses, these are federal charges and should not be taken lightly. Civil penalties can be imposed per violation, which can be extremely costly to your business and your reputation. A skilled New York City criminal defense lawyer knows that proving odometer fraud can be difficult and understands how best to defend individuals against these charges.
If you have been charged with odometer tampering, contact the experienced New York criminal defense lawyers at Bukh Law Firm, PLLC to understand your legal rights and options.