Reports from the Better Business Bureau and FOX News indicate a growing trend in car repair fraud, with federal authorities and the FBI now taking notice. Victims across the nation are fighting back, but recovering the stolen or embezzled vehicles and lost money is proving to be a daunting task, with losses amounting to millions, leaving many consumers with nothing but painful memories (source: FOX News).
One of the most notable cases involves Defenders Northwest, LLC, a car restoration business in Gig Harbor, Washington. This shop, operated by Michele and Brian Hall, has become the center of multiple lawsuits alleging a multi-year fraud scheme that defrauded customers out of millions of dollars (source: Better Business Bureau).
The Allegations
The lawsuits against the Halls and Defenders Northwest, LLC allege a complex fraud operation that spanned several years. Customers entrusted their valuable vintage vehicles to the shop for restoration, only to face fraudulent billing, significant delays, and, in some cases, never seeing their cars again. The Halls are accused of using various tactics, such as false claims of third-party vandalism and fraudulent mechanics’ liens, to delay or avoid delivering the restored vehicles.
Moreover, the Halls are alleged to have launched harassing and defamatory attacks against the victims and their attorneys when confronted. Philip H. Lo, a partner at a major insurance defense law firm, and Shawn Harju of Federal Way, Washington, are the lawyers representing Defenders Northwest. Both attorneys have become embroiled in the controversy, with Harju facing a separate lawsuit for an unrelated $20 million invoice scam. Additionally, Lo has been sanctioned by the court for refusing to allow inspection of a vintage car alleged to have been embezzled by Defenders Northwest (source).
Victims Fight Back
In a related case, Clark P. Rittersbach, the owner of Concours Classic Motor Cars in New York, was recently criminally charged with wire fraud for a scheme similar to that of Defenders Northwest. Rittersbach allegedly defrauded customers out of $1.15 million by billing them for restoration work that was never completed (source: U.S. Department of Justice).
The impact of this alleged scam has reached beyond Washington. A car enthusiast in Hawaii wired over $250,000 for a Mercedes Brabus G63, which was never delivered. This case, among others, highlights the dangers of relying on positive social media reviews and endorsements, which could be fake.
What You Need to Know
Authorities and victims alike are urging car collectors to exercise extreme caution when dealing with car restoration shops. Here are some tips to protect yourself:
- Do Your Research: Go beyond social media profiles and positive reviews. Investigate the company’s history, check for any legal actions or complaints, and seek recommendations from trusted sources.
- Get Everything in Writing: Ensure all agreements, timelines, and costs are documented. Avoid paying large sums upfront and consider using escrow services for payments.
- Verify the Work: If possible, visit the shop regularly to inspect the progress of your vehicle. If you are unable to do so, consider hiring a third-party inspector.
- Be Wary of Red Flags: Unexplained delays, sudden price increases, or requests for additional payments without documented reasons are all signs that something may be amiss.
If you believe you have been a victim of car restoration fraud, contact your local authorities, the Better Business Bureau, and consider seeking legal advice. The sooner you take action, the better your chances of recovering your vehicle and any lost funds.
Stay vigilant, and protect yourself from becoming the next victim of car restoration fraud.
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