A car dealer in Manalapan, New Jersey pled guilty Monday to theft by deception after he manipulated the titles of cars damaged in Hurricane Sandy in order to sell the cars to unsuspecting customers.
Jonathan Olin, owner and operator of D&D Auto Sales in Old Bridge, New Jersey, admits in court he used fraudulent vehicle titles to sell seven water-damaged cars as 'clean' vehicles, according to the Asbury Park Press. Olin worked with Jessie Dinome, a former employee of the New Jersey Motor Vehicle Commission, to obtain titles for the cars that omitted their salty past and even forged former owner's signatures on title transfers.
D&D Auto Sales sold seven of the eight cars Olin bought at auction. They were described as good for parts only, but with doctored titles Olin made $87,000 selling the junked cars outright. The dealership's license has been suspended and Olin faces three years in jail. He will also pay restitution to those he swindled and he will be restricted from selling cars for a period of time to be determined by the court. Dinome will serve up to 364 days in jail, according to CBS New York. Two other employees of the dealership face charges in the case as well.
According to the National Insurance Crime Bureau an estimated 250,000 cars sat in corrosive salt water for days after the mega storm crippled much of the East Coast in late October 2012. Where did all of these cars end up? Not in junkyards, but used car dealerships across the country via auction. Flood damage can ruin a car both inside and out.
With all the tricks available to unscrupulous car dealers every consumer should know the signs of a flood damaged car. Here's what to look out for:
-- Do the research. Always conduct a thorough pre-purchase inspection and title search before buying any used car. When vehicles are totaled, the insurance company issues a "branded" title indicating the type of loss, such as salvage, rebuilt wreck or flood victim, and takes possession of the vehicle for auction. By law a salvaged car must carry this warning on its title, but beware of 'title washing,' a practice in which unscrupulous dealers re-register a car in several states which have slightly different requirements until the insurance brand is removed. If the car has the original VIN, a CARFAX report can protect you from title washing.
-- Check for water lines. Look in the glove box, the engine compartment, trunk, wheel wells and door jams for tell-tale water-damage blotches. Electrical connections with a green crusty substance or seat mounting bolts with rust are also dead giveaways that a car was underwater. While you're inspecting the car check under the seat or between the seat and the center console for fine dirt or silt carried by floodwaters into the car.
-- Check the fluids. Oil, power steering fluid, transmission fluid, and differential fluid all turn milky when mixed with water. Check the fluids and take a look at the dipstick. Rust here will indicated water damage and unscrupulous techs often forget to change this simple piece of equipment when rebuilding a salvaged car.
-- Give it a sniff. Even the strongest Febreze or air freshener can't completely kill the moldy smell seats and carpeting gain from slowly drying. A strong odor right away will tell you the car was in a flood, but if you're not sure roll up the windows and let the car sit for a while. The stale air will have a telltale basement smell. Also, if carpeting and upholstery seem too new for the car or even loose that might indicate a major overhaul of the interior.
-- How are the electronics? Reach under the steering wheel and feel the wiring. Brittle wires mean water damage. Static on the radio, flickering in the headlights or any number of electrical problems can indicate water damage.