Trio Accused of Defrauding State of 3.5 Million Felony Tax Evasion Grand Theft Charges Filed Against Luxury Car Dealers
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SacramentoThe California Department of Motor Vehicles (DMV) and the California State Board of Equalization (BOE) announced today that three Southern California persons have been arrested and charged with a number of fraud and tax-related crimes after a joint 3-year investigation into Sherman Oaks luxury used car dealership SNS Automobile Services Inc., which was doing business as Specialty Motors.
The owners of the dealership, identified as Stuart Neil Silver, Stanley Ralph Morris and Maury Silver, have been charged with multiple counts of felony tax evasion and grand theft in alleged schemes that may have defrauded customers and deprived the state of $3.5 million in sales taxes.
“We are proud that the efforts of our joint investigation could potentially recover millions of dollars legally due Californians,” said DMV Director George Valverde. “Securing records, investigating and preventing fraud are some of the department’s most important missions.
“In addition, DMV is now armed with the ‘California Car Buyer’s Bill of Rights’ that gives us even more ammunition to use against dealers who try to defraud their customers. The combination of tough consumer protection legislation and our equally tough investigative efforts keeps DMV on the cutting edge of customer advocacy,” he said.
The case began in 2003 with customer complaints that the dealership failed to transfer vehicle titles or to reimburse customers for DMV registration fees. But as investigators delved more deeply into financial records, they realized that the Silvers and Morris allegedly:
- Failed to pay to the State of California at least $3.5 million in sales taxes collected from customers during the period May 1, 2002, to December 31, 2004;
- Filed falsified tax returns to evade the payment of the sales tax collected;
- Failed to refund the victims’ excess DMV license and registration fees ranging from $482 to as much as $1523; and
- Sold extended service contracts to the victims and failed to purchase and deliver the extended service contracts to the victims. The victims paid between $1345 to as much as $4000 for their extended service contracts.
Investigators arrested Stuart Silver, an unlicensed dealer, on October 23, 2006. Stuart Silver’s bail was originally set at $3 million but was subsequently reduced to $1 million--at which time he bonded out and was released from custody. Stanley Morris and Maury Silver surrendered themselves in Los Angeles Superior Court, Department 30 on October 25, 2006, and were released on their own recognizance. Specialty Motors has since closed its doors and Stanley Morris and Maury Silver have relinquished their dealer licenses.
The Los Angeles County District Attorney’s office will pursue the case on behalf of eight victims. But DMV and BOE investigators suspect that dozens of other customers may have been defrauded in the dealership’s alleged financial schemes. All are encouraged to file complaints and present evidence to DMV investigators, and if necessary, pursue private litigation. Customers may also call the DMV toll-free fraud hotline at 1-866-658-5758.
Details of the case will also be forwarded to California’s Franchise Tax Board (FTB) and the Internal Revenue Service for standard review and possible additional charges.
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