Alleged scheme yields lawsuit

DealMaker Auto Group is expected to file suit today against one of its former managers and the owner of a used car dealership claiming the pair teamed up in a scheme to defraud the company.

David Grandeau, a spokesman for DealMaker, said the state Supreme Court action will name Junior Stefanini, DealMaker's former wholesale manager, and Kevin J. Caldwell, operator of KC Auto Sales, 19208 Route 11.

Mr. Grandeau said the suit stems from a year-and-half-long investigation into financial irregularities at DealMaker.

"This is the first chapter of the novel on what happened to DealMaker," he said. "The first chapter is that they got ripped off."

Mr. Grandeau said the suit will allege that the pair knowingly pre-dated forms submitted to the state Department of Motor Vehicles, making it appear that vehicles owned by DealMaker had been conveyed to Mr. Caldwell when they were actually still owned by DealMaker. The forms, a state Retail Certificate of Sale (MV-50), are submitted to the DMV once clear title to a vehicle is ascertained by the purchaser of the vehicle.

Mr. Stefanini's job included reselling used automobiles and he did business with Mr. Caldwell, a wholesale used car dealer who would take DealMaker's used vehicles to a wholesale auction. Between 2001 and 2008, DealMaker sold about 1,300 vehicles, totaling almost $4 million, through KC Auto.

It is expected to be alleged in the suit that Mr. Stefanini and Mr. Caldwell schemed to transfer vehicles from DealMaker's inventory to Mr. Caldwell without first obtaining clear title and payment.

In the event a car sold at auction for more than its expected value, it will be claimed that Mr. Stefanini and Mr. Caldwell would arrange to pre-date the MV-50 to show that the used vehicle had first been conveyed to KC Auto, even though it was still owned by DealMaker. The purchaser of the vehicle would then make payment to Mr. Caldwell, rather than DealMaker, and he would issue an MV-50 to the purchaser, which could only occur because the form had been pre-dated, it will be claimed.

Mr. Caldwell would then allegedly make a lesser payment, in the amount that the automobile had been expected to sell for, to DealMaker. The difference between what Mr. Caldwell paid DealMaker and what KC Auto collected from the purchaser, profits which should have gone to DealMaker, was then kept by Mr. Caldwell and Mr. Stefanini, the suit will claim.

"(Mr. Caldwell) was betting on the race after it was run and he was able to do that because DealMaker employees were assisting him," Mr. Grandeau said.

He said DealMaker does not know for certain how many vehicles were involved, but believes it to have been "well in excess of two thousand vehicles."

"We believe the damages far exceed seven figures," he said. "It's hard to get all the facts. We had to bring the lawsuit to get access to all of the information."

Mr. Grandeau said, "To add insult to injury, DealMaker would pay to have the vehicles transported to the auction," which he estimates cost the company an additional $200,000.

He said the matter of possible pre-dated MV-50 forms arose when a DealMaker title clerk said that a date was wrong on one of the forms, as it was dated prior to her coming to work there. When she was asked what was wrong with that, she responded, "It has my signature on it," according to Mr. Grandeau.

He said the Jefferson County district attorney's office "is aware of the allegations" surrounding the alleged pre-dated forms.

Mr. Grandeau said the investigation into the financial irregularities within DealMaker is continuing and that more action may be forthcoming.

"If you want to know what happened to DealMaker, this is what was happening," he said. "DealMaker was getting picked clean by these vultures. It was a business that was hemorrhaging cash because everyone tried to get their piece of the pie before the company did."