| NEw BiL­LiON­AiRE: thE Big whEELER

A lit­tle trou­ble with the law hasn’t stopped Ernie Gar­cia from hit­ting the gas on a used-car em­pire.

Forbes - - CONTENTS -

Ernie Gar­cia’s used-car king­dom.

Plus: An­other bil­lion­aire pres­i­dent—what are the odds?

FOR MANY YEARS, Ernest “Ernie” Gar­cia II, 60, shunned the spot­light. Then, last April, he saun­tered onto one of the grand­est stages in busi­ness: the bell-ring­ing plat­form at the New York Stock Ex­change. Car­vana, which has cre­ated a pop­u­lar on­line mar­ket­place for buy­ing, sell­ing and fi­nanc­ing used au­to­mo­biles, was go­ing pub­lic, and Gar­cia, its largest share­holder, wanted to sa­vor the mo­ment.

Nearly 30 years ago his cir­cum­stances were vastly dif­fer­ent. Gar­cia, then a real es­tate de­vel­oper, pleaded guilty to a felony fraud charge con­nected to Charles Keat­ing’s Lin­coln Sav­ings & Loan scan­dal and spent three years on pro­ba­tion. (Gar­cia had ar­ranged a com­plex real es­tate pur­chase that al­lowed Lin­coln’s par­ent to im­prop­erly siphon money out of the bank.) In 1991 he bought Ugly Duck­ling, a rental-car chain, for $1 mil­lion. Un­able to turn it around, Gar­cia changed gears: Ugly Duck­ling be­came Driv­e­Time, a seller and fi­nancier of used cars, and he steered it through sev­eral sub­prime credit crunches. Car­vana be­gan as part of Driv­e­Time be­fore spin­ning off four years ago. Com­bined, Gar­cia’s stakes in the two firms are today worth over $2 bil­lion.

Gar­cia has tried to keep his con­tro­ver­sial past sep­a­rate from Car­vana—at least some­what. Although he has never served as a Car­vana ex­ec­u­tive or di­rec­tor, his son Ernest III now runs the com­pany, and the two live next to each other in Phoenix.

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