To Catch A Thief: North Carolina Used Truck Operation Puts the Brakes on Sales Scam

Right out of an episode of “Hill Street Blues,” Jon Tepper, president and owner of Ameritruck, LLC, based in Charlotte, NC, found himself a target of fraud involving a Peterbilt. What transpired is pretty incredible as Jon pulled out all the stops to help law enforcement catch a thief who was trying to scam him out of about $55,000. In the process, he learned quite a lot, including how important False Pretense insurance coverage is.

It all started when Jon’s son was looking to buy a truck and posted a request on TruckertoTrucker.com. Jon has been in the used trucking business for 27 years and co-founded Ameritruck in 1995, a nationwide retail and dealer sales operation.Having bought and sold thousands of trucks all over the country and well versed in the buying and selling of trucks, Jon’s search to purchase another truck was business as usual—or so he thought.

An individual who saw the request contacted Jon’s son about a 2007 Peterbilt 379 he owned and wanted to sell. They communicated several times via email, after which Jon took over to go over all the details. Jon received photos of the truck, for which the seller was asking $60,000. They agreed to a price of $55,000 contingent on an inspection that Ameritruck would coordinate. Jon asked for an invoice coupled with a copy of the title. Subject to the inspection performed by Asset Appraisal Services, he would then wire the monies. Jon also sent the appraisal service contact information to the seller.

Jon received the bill of sale and sent a signed copy to the seller the day before the inspection. The seller also sent a copy of the title for the truck. Jon confirmed the inspection time for the following day. The seller had agreed to provide the original title to Asset Appraisal Services once the inspection was done, and they would overnight it to Jon.

The day of the inspection Jon received a call 45 minutes earlier than the scheduled inspection time from the inspector. He indicated that he was from Asset Appraisal Services and that the inspection was completed. “This wasn’t the same person with whom I had scheduled the inspection,” explains Jon. “But it was someone with clear truck knowledge. We reviewed the truck extensively. I asked a lot of specific trucking questions that a layman would not have known how to answer or even what I was talking about. For example, I asked what were the tire 32nds on the rear. He responded immediately 22/32nds, and was very versed. This guy knew trucks.”

One odd comment made at the end of the discussion, however, did catch Jon’s attention. “He said, ‘You’re getting a good deal on this truck, it’s worth $68,000-$72,000’. I immediately responded that I hope he wasn’t speaking in front of the seller and that the comment was out of line. He advised me that the seller was not there and had left the title with him. I asked him if the seller seemed legitimate and he said yes.”

Jon then had the $55,000 wired to the seller’s credit union. “As soon as the wire was sent, though, I kept thinking about his comment about the price of the truck. So I called my contact at Asset Appraiser and told him I wasn’t happy with the comment his inspector made. I was advised that their inspector had yet to perform the inspection, that he was 10 minutes away from the seller’s place. I immediately called my bank to rescind the wire transfer, under the impression that you could do so. Unfortunately, that is not the case – once it’s out of your account, it’s a done deal.”

Jon then called the seller’s credit union, explained the situation and requested that the funds not be released. The seller happened to be in the bank only minutes before and was able to get $1,000 before the credit union put a hold on the account. In the meantime, Jon contacted the police and filed a report locally as well as at the seller’s location in Minnesota. All the while, the seller was calling his credit union demanding his money and threatening he would sue if the money was not released.

This was a highly unusual case. Typically, when there is wire fraud, it’s discovered only after the money is gone. But in this case, the money was still sitting at the seller’s credit union. What’s more, Jon had all the paperwork to prove the fraudulent scheme, including records of the actual owner of the truck and how the seller had duplicated and changed the title. And, although a criminal suit was underway, the seller could not be found and served. Meanwhile, the money sat frozen in the account.

During all this activity in an effort to recoup the money, Jon had consulted with his brother who’s an attorney, and was advised to check if his commercial insurance program included False Pretense coverage. False Pretense covers losses as a result of an insured acquiring a vehicle from someone who did not have legal title to it.

“I hadn’t even heard of this coverage before,” Jon notes. When he spoke with his agent, he learned that he indeed had $25,000 of coverage and immediately filed a claim. The insurer paid the claim, and Jon was advised that they would reimburse any and all legal fees and expenses provided he was able to recoup the money.

Jon retained an attorney and filed a civil suit to get the money. It took about six months before there was a judgment. Jon was able to get all his money returned from the frozen account, excluding the $1,000 that the seller had taken. Jon returned the $25,000 he received under the False Pretense claim, less all his expenses including the $1,000 the seller had taken, which amounted to about $4,700. The perpetrator was eventually caught and received 54 months of jail time of which half will be spent locked up and the remainder under supervisory probation.

There are several key takeaways from this incident, according to Jon. “Dealers need to be aware that there are some very sharp and creative scammers out there. This seller colluded with someone who knew trucks and went to great lengths to carry out this fraud. In addition, don’t let anyone ever tell you that if you make a wire transfer it can be rescinded right away. And, be sure you check that your insurance policy includes False Pretense. Having this coverage was a blessing for us as we got part of our money back [up to the policy limit] immediately. And once we were able to recoup all the money, the insurance company paid our expenses. When my policy renewed, I increased our False Pretense coverage to $75,000.”

False Pretense coverage provides dealers with protection from unscrupulous sellers and buyers. It is designed to cover a loss when someone causes you or an employee to voluntarily part with a vehicle by trickery, scheme, or false pretense or when the vehicle is acquired from a seller who does not have the legal title or the right to transfer title. Be sure to check that your insurance program includes this essential coverage.

 

Each month in this column, BOLT Insurance provides UTA members with insights into the various exposures and risks they face. If you have any questions regarding a particular coverage issue or a story involving any type of claim you’d like to share with BOLT Insurance, please contact Brian Lawlor at 860-777-2671 or via email at [email protected].