How dealers can counteract growing threat of fraud

After a lull in synthetic identity theft during the COVID-19 pandemic, the use of fake identification to commit fraud has started to “explode,” an expert says.

Originally published on Automotive News
March 12, 2023 | MIRANDA DUNLAP

The use of fake identification to fraudulently purchase vehicles at dealerships is a rapidly growing trend, said Doug Fusco, founder of Dealer Safeguard Solutions.

After a lull in synthetic identity theft during the COVID-19 pandemic, the use of fake identification to commit fraud has started to “explode,” Fusco said. Dealer Safeguard Solutions is part of Informativ, which helps dealerships identify and combat sales fraud.

The fake ID documents fraudsters create are becoming more sophisticated and authentic looking, making it difficult for dealership personnel to detect. Not discovering this fraud before a vehicle sale is made can lead to an overall burden for the dealer. “Worst case, they lose the car; next worst case, they have to go through brain damage to get that car back — if they’re lucky enough to get it back and it hasn’t been shipped overseas or sent to some other part of the country,” Fusco said. Fusco: “They’re in a hurry.” 

Unlimited time, budgets

Two recent cases highlight the potential damage to dealerships. Travon Demetrius Hardie, 25, of Washington, D.C., was sentenced in Maryland on Jan. 17 for his involvement in a scheme that fraudulently used the personal identifying information of at least 25 people to purchase at least 31 luxury vehicles, according to a Department of Justice release.

The attempted losses totaled over $1,808,700. Hardie and co-defendants John Paul Thompson Jr. and Nickolas Alexander Mathis created fake IDs with the stolen personal information, according to the release. These documents were used to obtain financing for vehicles from dealerships in four states. Thompson and Mathis face a maximum sentence of 20 years in federal prison for wire fraud conspiracy and wire fraud, along
with a mandatory sentence of two years in federal prison for aggravated identity theft.

Hardie successfully obtained at least 11 automobiles worth more than  $697,000, the release said. He was sentenced to 54 months in federal prison and three years of supervised release for conspiracy to commit wire fraud, wire fraud and aggravated identity theft. He admitted he manufactured some of the fraudulent documents that were used in the scheme, according to the release.

In another case, Julio Hisael Almonte, 31, of the Bronx, N.Y., was sentenced in Charleston, W.Va., on Jan. 10 for his role in fraudulently purchasing new trucks from two Charleston dealerships. Almonte and a co-conspirator made these purchases with two forged Ohio driver’s licenses containing stolen personal information and the co-conspirator’s photo, according to a DOJ release.

Warning signs

Though fake documentation can be hard to discern, dealership employees can look out for certain warning signs. “[Fraudsters] are not coming in on a Monday morning; they’re coming in when the dealerships are at their busiest, hoping that they can get through the hoops and the distractions,” Fusco said.