6 • January 16, 2017
USED CAR NEWS
Sales to Russia Bring Charges A New Jersey auto dealer was charged for allegedly defrauding more than 140 Russian citizens. Sergey Kapustin was charged with one count of wire fraud and conspiring to commit wire fraud. Kapustin was the owner and president of Global Auto Group, Effect Auto Sales and G Auto Sales, located in Elizabeth, N.J. Global bought and sold used cars, typically high-end vehicles that were classified as salvaged. From January 2011 through December 2014, Kapustin allegedly operated a scheme to defraud customers, who usually lived in Russia, Ukraine or parts of the former Soviet Union. Kapustin had one or more Russian language websites that offered for sale luxury vehicles, including cars from Mercedes and Lexus, which were normally priced below market value. The site said the cars could be shipped to Finland for easy delivery to Russian citizens, if they agreed to pay full price upfront for the vehicles. Kapustin was Russian and his websites were geared to buyers who believed they were getting a “good deal” from a fellow countryman who could be trusted to follow through once the purchase price had been paid.
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After the buyers would wire the full price to one or more bank accounts controlled by Kapustin, he would allegedly give them a litany of excuses and reasons for delay in delivery. Unbeknownst to them, more often than not Kapustin had neither possession nor title to the vehicles being sold. At some point, the victim would be offered a different, often inferior car, burdened with added shipping and storage costs. The buyer, desperate to acquire something for money already spent, would oftentimes wire additional money to rescue the car from its storage, but still wind up without a car. Those very few cars that did land in Finland were normally the product of salvage auctions for vehicles that had been immersed in or flooded with salt water and were inoperable. Kapustin allegedly stole approximately $2 million this way. The count with which Kapustin is charged carries a maximum penalty of 20 years and $250,000 fine. Kapustin was arrested by special agents of the FBI. The case is being handled by the U.S. Attorney for New Jersey.
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