Group pleads guilty in $4.3 million Toyota fraud

Crime
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CHARLESTON, WV (WOWK) – A Kentucky woman faces up to 20 years in federal prison after pleading guilty for her role in a plot to defraud Toyota of more than $4.3 million.

Tammy Newsome, 54, of Ashland, Kentucky, pleaded guilty to mail fraud for her role in the scheme. She now joins three other individuals who previously entered guilty pleas for their roles in the fraud scheme.

According to a statement sent to 13 News, Newsome worked as an administrative assistant for Big Blue Motor Sales, a used car dealership in Kentucky. The dealership bought trucks at wholesale prices at auction, obtained hundreds of copies of Kentucky and West Virginia residents’ driver’s licenses and fraudulently titled the trucks in the name of those residents. The dealership then persuaded Toyota to repurchase the trucks at 150% of value.

“Newsome played a critical role in perpetrating this $4 million fraud scheme,” said United States Attorney Mike Stuart. “I commend the great investigative work of the U.S. Postal Inspection Service, the FBI, the W.V. State Police, and the W.V. Insurance Commissioner. Toyota may have suffered the loss but, ultimately, it’s consumers who really pay. These fraud schemes rip off every consumer. That’s why we work so hard to hold those responsible accountable.”

Earlier this month, Frank Russo, 69, of North Carolina, entered a guilty plea to wire fraud for his role in a scheme and Kevin Fluharty, 59, of West Virginia, pleaded guilty plea mail fraud. Russo and Fluharty face up to 20 years in prison and will be required to pay restitution to Toyota. Russo’s sentencing is scheduled for October 1. Fluharty’s sentencing will be held on August 24.

In February, Stanley Clark, 67, of Poca, pleaded guilty to mail fraud for his role in the scheme.

Stuart said the scheme relied on Newsome to make false representations to the Department of Motor Vehicles to obtain false vehicle titles in the names of false owners, Stuart said. The titles obtained by Newsome were then used by other scheme participants to induce Toyota to repurchase the vehicles.

Russo was employed as service manager by a Toyota dealership in Kanawha County and Fluharty was a notary public. Russo and Fluharty admitted they were participants in a fraudulent scheme whereby a Kentucky used car dealership, Big Blue Motor Sales, bought trucks at wholesale prices at auction, 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.

Russo ensured vehicles brought to the Toyota dealership qualified for the extended warranty extension program, while Fluharty notarized documentation used in the repurchase transactions. Russo admitted he sent false ownership information to Toyota by electronic wire in furtherance of the scheme. Fluharty admitted he falsely notarized documents knowing that those documents would be sent through the mail to Toyota. Russo and Fluharty admitted they received bribes or kickbacks from Big Blue Motor Sales for their participation in the scheme.

Newsome faces up to 20 years in prison when she is sentenced on October 15, and will be required to pay restitution of up to $4.3 million to Toyota. 

Newsome admitted she made false representations to the DMV, delivered cash bribes to other scheme participants, and forged signatures of false owners so that checks issued by Toyota in the name of a false owner could be deposited into Big Blue Motor Sales’ bank account.

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