Multi-million-dollar title scam arrests net 7 in EV The Chandler Arizonan

Multi-million-dollar title scam arrests net 7 in EV

Multi-million-dollar title scam arrests net 7 in EV
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ARIZONAN NEWS STAFF

Seven East Valley residents face criminal charges for fraudulently issuing thousands of car titles and netting millions in revenue.

Scott Bandy, 29, of Chandler was indicted on Feb. 24 for his part in conducting an illegal enterprise meant to sidestep state regulations of the auto dealership industry.

Six other suspects were arrested on Feb. 19, including Ivan Valenzuela, 32, and Oscar Valenzuela-Pena, 31, both of Chandler; Gilbert residents James Nickolas Johnson, 41, Mary Judy Fialko, 65, and James Edward Fialko, 59; Lon Isaiah Chaneyfield, 56, of Mesa.

According to court records, Bandy and his co-conspirators allegedly sold unauthorized dealer’s licenses to car sellers, allowing them to bid on vehicles at wholesale auctions from outside the state.

Arizona law requires car dealerships to obtain a license through the state Department of Transportation, which obligates applicants to pay taxes and undergo criminal background checks.

Authorities claim Bandy and his partners helped up to 1,500 people skirt around this licensing process in an illegal scam known as “curbstoning.”

This type of scheme most often involves unlicensed sellers flipping beat-up cars and attempting to sell them to naïve consumers.

But curbstoning can branch out to involve a broader network of sellers trying to game the system.

The East Valley suspects are also accused of altering more than 31,000 car titles to make them look like the vehicles were sold through a licensed dealer.

Bandy and the others would allegedly charge $100 for each fraudulent title.

State authorities believe this scheme generated up to $7 million in revenue over the last couple of years – making it the biggest curbstoning operation to be taken down in Arizona.

State agencies opened an investigation  last March after an auto dealer association in California filed a complaint.

A task force consisting of investigators from ADOT, the Department of Revenue, and Arizona Attorney General’s Office worked together and got evidence from a Mesa business and homes in Chandler and Gilbert.

The seven suspects have all been charged on multiple counts of money laundering and fraud. They’re scheduled to be arraigned in Maricopa County Superior Court on March 3.

In 2018, the Arizona Curbstoning Enforcement Task Force was formed to crack down on the growing prevalence of fraudsters trying to evade the state’s dealership regulations.

Individuals in Arizona can only sell up to six cars within a 12-month period without a state license.

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