Convicted con man at center of sketchy SUV sales
Vehicles may have been sent to buyers in China
Straw buyers are more typically associated with guns, but in a business fraud lawsuit, the nation’s largest auto finance company claims a Wisconsin dealership used fake buyers to help send lightly used luxury SUVs to China and stiff the lender.
Behind the whole scheme, however, is Alex Golant, a 37-year-old convicted Ukrainian con man turned FBI informant, who was living in Waukesha County before he disappeared last year. The six cars at issue in the lawsuit are just a few of the dozens Golant has been accused of trying to obtain by fraud in other cases.
“I just hope they find this guy,” said Abdullah “Abe” Zabadneh, one of Golant’s victims. “The FBI and the Russian mob are both looking for him.”
Utah-based Ally Bank and Ally Financial Inc., of Detroit, formerly GMAC, say they are out more than $355,000 they can’t collect from the “straw purchasers” or recover by taking back the vehicles, which they think have been sent to China, according to the lawsuit filed in Milwaukee federal court.
The suit seeks that money plus other unspecified damages and costs. It names Russ Darrow LLC, doing business as Russ Darrow West Bend, and Russell M. Darrow Jr. as defendants. Darrow signed as personal guarantor for the dealership’s obligations to Ally.
Darrow declined to be interviewed. The Russ Darrow Group issued this statement:
“We strongly deny any and all allegations that are being made. This issue is simply a difference of opinion regarding a business matter between the two parties, having no impact on our customers or day to day operations. We intend to reach an amicable resolution.”
On Wednesday, the Darrow Group issued a further statement.
“We had no knowledge of the alleged customer fraud and had no involvement and were no a party of any scheme. We are a victim in this case and will do everything in our power to
be made whole. When the facts are revealed, they will show that the finance contracts are enforceable. In 53 years of doing business in Wisconsin, we have never been involved in a situation such as this.”
According to the lawsuit:
From October to November 2016, Russ Darrow West Bend purportedly sold three Range Rovers and three Mercedes-Benz GLS 450s or 550s to individuals who signed six-year financing agreements. Five of the buyers were from Illinois, one from Milwaukee. The vehicles ranged in price from $50,000 to $90,000.
Ally relied on representations by the dealership about the legitimacy of the buyers and the finance agreements and bought the loans from Darrow. But after seven to 10 months, payments on all the deals stopped.
The lawsuit has claims for fraudulent and negligent misrepresentation, breach of guaranty and breach of retail agreements.
When Ally tried to enforce the loan agreements, it discovered the named buyers had never been to West Bend, hadn’t knowingly signed the loan documents and in most cases had never even seen the vehicles they purportedly purchased.
One buyer, Kristen Bergquist of Hampshire, Ill., said the owners of the tattoo parlor where she works introduced her to Golant, who asked her to sign as the buyer of a 2015 Mercedes GL 450 so he could export it to China. She agreed.
She told Ally investigators that someone from a Mercedes dealership came to the tattoo parlor with paperwork for her to sign. A few months later she said, she signed more paperwork at the tattoo shop to sell the Mercedes.
Ally contends none of the purportedly traded-in and sold Range Rovers and Mercedes-Benzes were likely ever really at Darrow West Bend, a Chrysler-JeepDodge RAM dealership.
In each straw purchase, the lawsuit claims, fake buyers’ credit applications reflected that they were seeking the credit in their own name and based on their own income and assets.
Another woman, from Schaumberg, Ill., said she also signed papers but never paid the $5,000 down payment reflected in a financing agreement for a Mercedes. Her driver’s license was emailed to Darrow West Bend’s finance manager by the same man who asked Bergquist to buy the other Mercedes — Golant.
Golant owned Timeless Autos, a Wisconsin company that has defaulted on a $4.7 million loan from a New York finance company. Westchester Export Capital sued Timeless in federal court in New York last year and since won a default judgment and began recovering some of its losses by taking possession of some of the 51 cars involved in that brokerage scheme.
Another Illinois company Golant set up made several of the limited payments on the six vehicles at issue in the Darrow suit.
Several of the SUVs at issue were at times titled to Reliable Car Source, of Bolingbrook, Ill.
Zabadneh, who owns Reliable Car Source, said he met Golant though a mutual friend in the car business. He said Golant expressed interest in buying his company and keeping him on to run it. He said Golant seemed to have endless connections to car dealers, drove a Bentley and always carried tens of thousands of dollars in cash.
“This guy sold me on a dream,” Zabadneh said.
But then he began getting notices of overdraft from banks where Golant had opened accounts for Reliable Car Source, and from a finance company that said he owed $80,000 on a Porsche Cayenne he never bought, and from Range Rover about updating the satellite radios on more vehicles he didn’t know about.
Federal court records show Golant pleaded guilty to wire fraud in 2013 for another car export scheme that involved taking about $3 million from clients ordering cars, and then Golant and a co-defendant gambled most of the money away.
But Golant wasn’t sentenced until January 2016, after he helped the FBI make a racketeering case against two Russian mobsters involved in illegal gambling and health care fraud, Michael “Fat Mike” Danilovich and Mikhail “Russian Mike” Zemlyansky.
He was sentenced to time served and three years of supervised release, which he was allowed to serve in the Eastern District of Wisconsin, since he was living along a golf course in Waukesha County while he ran Timeless Autos.
Until he disappeared, he and his wife and young child lived in a large rented home on Legend Way in Wales for more than two years. The home is now listed for sale for $1.7 million dollars.