Former used-car salesman pleads guilty to $2M scam

Former used-car salesman Sean O’Brien is facing a federal penitentiary term after pleading guilty Friday to two fraud charges in connection with a $2-million scam.

O’Brien admitted defrauding dozens of consignment clients at his Treadz Auto Group Inc. dealership, as well as a credit company in Ontario called On Credit.

Reading from an executive summary of a lengthy statement of agreed facts, Crown prosecutor Steven Johnston said the losses to the victims were significant.

“The total loss to the public and On Credit in relation to this file and the Criminal Code charges is $2,163,971.77,” Johnston told Court of Queen’s Bench Justice Willie deWit.

As part of a plea agreement, O’Brien pleaded guilty to two amended charges of fraud.

He had been facing 164 fraud and theft charges before the allegations were consolidated into two charges.

In many cases, Johnston told deWit, O’Brien took consigned vehicles left for sale by owners, re-registered them without the permission of the victims and sold them to third parties.

Many of the victims had hired O’Brien to sell vehicles on their behalf which still had payments on them.

“Many of the people who were selling the cars ... they didn’t own them outright,” Johnston said.

“You ended up with victims ... where they continued to pay for a car they (no longer) own.”

And he said victims were left without insurance coverage because they handed their property willingly to O’Brien, the prosecutor said.

“It’s not a car theft in the ordinary sense,” Johnston said.

“Some insurance companies were taking a very strict reading of the policies, ‘You gave away the keys, you don’t get any money.’ ”

With On Credit, O’Brien would use fabricated documents to re-register consigned vehicles in his name and then use them as collateral to get loans to purchase other autos.

“The loss to On Credit is $484,605.52 for the vehicles obtained with fraudulent documentation.”

Defence counsel Karanpal Aujla said O’Brien simply got in over his head and instead of declaring bankruptcy and creating losses for his investors, he tried to keep the failing business going.

“This is not a situation where Mr. O’Brien enjoyed a lavish or luxurious lifestyle,” Aujla said.

Before deWit adjourned to make his sentencing decision, O’Brien addressed the court.

“I don’t know how to make it up to everyone,” he said, choking back tears. “I’m so, so sorry to everyone.”

Aujla and Johnston have presented a joint sentencing recommendation for a three-year prison term.

DeWit will reveal O’Brien’s fate on Oct. 12.