U.S. Attorney's Office for the District of Southern West Virginia issued the following announcement on Sept. 5.
A federal grand jury returned an indictment today charging two people with nine counts of wire and mail fraud relating to a scheme to defraud a major car company of more than $4 million.
According to the indictment, Frank Russo, 68, of North Carolina, and Kevin Fluharty, 58, of West Virginia organized and participated in a scheme to misuse a car company’s warranty extension program that offered to repurchase certain defective trucks for 150% of their value, so long as those trucks were owned by individual customers rather than a dealership. Participants in the scheme bought the trucks at wholesale prices at auction through a car dealership in Kentucky. They then obtained hundreds of copies of Kentucky and West Virginia residents’ driver’s licenses, fraudulently titled the trucks in the name of those residents, and induced the car company to repurchase the trucks at 150% of value.
According to the indictment, the indicted defendants ran 350 trucks through the scheme between 2013 and 2015, causing approximately $4.3 million in losses to the car company.
“These allegations are very serious. The alleged fraud scheme caused over $4 million in losses,” said United States Attorney Mike Stuart. “I appreciate the tremendous work of the investigators in this case that resulted in today’s indictment.”
If convicted, the two defendants each face up to 30 years in prison.
The United States Postal Inspection Service, the Federal Bureau of Investigation (FBI), the West Virginia State Police and the West Virginia Office of the Insurance Commissioner conducted the investigation. Assistant United States Attorney Stefan Hasselblad is handling the prosecution.
Original source can be found here.