Police have laid dozens of fraud charges against a Calgary man in connection to a now-defunct auto consignment company.
According to investigators, 94 people bought 116 vehicles to TREADZ Auto Group Inc. between July 16, 2011 and Aug. 31, 2014.
“The investigators of the economic crimes unit really had to take a long period of time to discuss with all the victims what their individual stories were and then get the documentation to support charges,” Staff Sgt. Kristie Verheul said.
The patrons paid a $299 consignment fee to the company and signed contracts which stated TREADZ would:
- Display, demonstrate and advertise the consignment vehicle
- Pay the consignor a settlement cheque within 10 business days of selling the vehicle
- Deduct and pay all liens
- Accept all trades whole or in part payment of vehicle.
Police said owners never transferred the ownership of the vehicles to the consignor. However, it’s alleged 78 of the vehicles were sold to unsuspecting buyers without compensation.
“The losses from these vehicles are estimated at approximately $1.8 million,” police said in a news release.
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TREADZ is also alleged to have re-registered 62 vehicles in the company’s name by using fraudulent ownership documents between Oct. 1, 2013 and Aug. 31, 2014.
“In some instances, registration documents were completely fabricated,” police said. “The company then used 38 of these vehicles as collateral to acquire a loan from a credit company for approximately $484,000, which was allegedly never repaid.”
It’s alleged TREADZ then sold some of the vehicles to unsuspecting third parties, leaving consigners at risk of paying the debt to the credit company, or third party buyers at risk of having their vehicle seized.
“We had one vehicle that was worth $86,000,” Verheul said. “There were multiple types of vehicles–all different types of cars, trucks and very high-end vehicles. Some victims had multiple vehicles they consigned through TREADZ.”
The credit company was able to recover 27 vehicles under the Fair Trading Act. However, rather than leaving citizens at a loss, the company accepted the financial loss and returned the vehicles to the owners. Police said the total loss accumulated by vehicle owners and the credit company is estimated at over $2.2 million.
“This company was in operation for 10 years and actually did legitimate business for those years,” Verheul said. “We believe that there was credit and loan issues which really did lead to these frauds being perpetrated.”
Sean Patrick O’Brien, 47, is charged with 89 counts of fraud over $5,000, 71 counts of theft over $5,000, and one global charge each of trafficking in property obtained by crime, using a forged document, counterfeiting a mark and fraud over $5,000.
He is scheduled to appear in court on Friday, July 15.
With files from Global’s Tony Tighe
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