Men rolled back odometers and then sold at least 118 cars to trick buyers, feds say
In a “long-running odometer roll-back scheme,” a car dealership owner worked with his partners to “lower” the mileage on used vehicles before reselling them for more, federal authorities say.
“By deceiving purchasers into believing the vehicles had fewer miles than they actually had, (they) sold the vehicles at inflated prices, resulting in consumers paying more for the vehicles than they would have paid had they known the true mileages,” according to a May 19 news release from the Department of Justice in the Eastern District of Pennsylvania.
Now two New Jersey men have pleaded guilty in the fraud case.
Felix Granowski, 58, of Matawan — the used car dealership owner — pleaded guilty May 18 to conspiracy to commit securities fraud, according to federal court records. The next day, Alec Morgunov, 34, of Manalapan pleaded guilty to the same count “in connection with his work at Granowski’s dealership.”
Together, authorities say they were involved in selling at least 118 cars with fake odometer readings and falsified vehicle titlesfor a loss of $674,606 to consumers.
The defense attorney representing Granowski said he has no comment at this time. Morgunov’s defense attorney did not immediately respond to a request for comment from McClatchy News.
The National Highway Traffic Safety Administration says odometer schemes like this one cost U.S. car buyers at least $1 billion every year through the fraudulent sales of over 450,000 vehicles annually.
“When individuals misrepresent the mileage on used cars, they deceive consumers into paying more money for those cars while also hiding vital information that can impact vehicle safety and repair costs,” Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said in the news release.
In the case of Granowski and Morgunov, authorities say they admitted to selling “high-mileage, used vehicles with false, low-mileage readings entered on the vehicles’ odometers and titles” between 2012 and 2016.
They did so by buying the high-mileage cars, altering the odometers to show less miles and then obtaining motor vehicle titles that reflect the new readings, according to the news release.
Granowski and one of his co-conspirators would query a website with commercial vehicle history records to see if the cars had current mileage readings, according to court records. If the true, higher mileage reading was listed, they would and take the vehicles with a rolled-back odometer to get an oil change and service receipt reflecting the new, fake readings.
With the receipts, they would submit correction requests to the website by impersonating the vehicles’ previous owners, records show.
In other cases, authorities say Morgunov and co-conspirators would ask the original sellers to leave the mileage disclosures on the titles blank. If the titles were not left blank, court records say they would impersonate the sellers and request a new title to fill in a lower mileage.
They found the used cars in online and newspaper advertisements from private sellers in Pennsylvania, New Jersey and other states, according to court records.
The cars were then sold at auctions to other used car dealers, court documents say, “thereby defrauding other vehicle dealers and, ultimately, end consumer purchasers.”
On average, authorities say the vehicle odometers were rolled back 64,489 miles, providing the co-conspirators an average profit of $5,717 per car.
Granowski and Morgunov are scheduled for sentencing on Aug. 31 and Sept. 1, according to the news release. They each face at least five years in prison.
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