Bridgeton – Home office of fraud, officials say

(Published in The Press of Atlantic City on Sunday, July 31, 2005.)


The New Jersey Dealers Auto Mall has no cars on lots.

No salesmen showing vehicles.

No prices colorfully scrawled on showroom windows.

What you’ll find is an old warehouse complex, and inside it, hundreds of 6-by-6 office cubicles with plywood walls and chicken-wire ceilings. They come with a phone, desk, file cabinet and safe, but seldom a dealer present.

Authorities call this warehouse a major conduit of car-sale fraud throughout the Northeast. The state proposed new regulations this year to crack down on unscrupulous dealers working out of places like this.

“Some dealers using that facility as a base have scammed many car buyers by title scams, washing salvaged cars, large-scale odometer fraud,” State Trooper Stephen Jones said. “Sometimes it’s even covering up stolen vehicles.”

Owner Louis Civello Jr. rents his tiny offices to 301 dealers for $500 per month each. He says about 70 percent are wholesalers who buy cars from dealerships, lease fleets and auctions, then sell them, often at auctions. The rest sell cars on the Internet or deal in import-export to Russia, Poland and other countries. Some dealers stop in regularly to pick up mail. Others never see the place.

All roads lead to Bridgeton

At one point, New York Department of Motor Vehicles chief investigator Owen McShane tracked 150 car fraud complaints per month back to this one address: 330 E. Commerce St., Bridgeton, N.J.

It has housed businesses such as JAZ Sales Unlimited, aka Jack Sellars, who got 37 months in federal prison this year for rolling back odometers before selling cars in New York. He obtained a New Jersey dealer’s license through the Bridgeton auto mall after his New York license came under scrutiny. Solomon Abraham, Joseph Verdino, Sal Caliendo, Sal Ferraioli, Greg Saadi, Abe Zucker and Semyon Levin all got licensed in Bridgeton and nailed by the U.S. Department of Justice or Brooklyn district attorney for odometer fraud in Staten Island and Brooklyn.

Prosecutors around the region have convicted plenty more. Unscrupulous dealers defraud customers and run a black market for temporary registrations that allow drivers to get away with no insurance or permanent registration, according to Sue Kleinberg, New Jersey Motor Vehicle Commission’s regulatory officer.

“They’re all engaging in these scams,” Kleinberg said. “The scams all come from Bridgeton.”

Civello doesn’t deny that some questionable dealers may come through his warehouse. After all, he has 300 dealers, and this is the used-car industry. If scams lead to his warehouse, it’s only because he has more dealers using one address, Civello said. He estimates that he evicts 10 percent of his dealers every two months. On Wednesday alone, he evicted four for not paying rent.

But don’t blame him for their scams, Civello says. He just helps dealers get licensed.

“The state is the one that licenses them,” Civello said.

“I don’t tell the state who to license, who not to license. I just show (dealers) how to do it.”

Civello, 30, hasn’t broken a law, according to authorities. The Queens, N.Y.-raised, Monmouth County resident pioneered the mall model in 1994 when he bought the Bridgeton warehouse complex with plans to sell cars and split space with a few dealers. He got 300. The business model’s so profitable that copycats have sprouted around the state, most notably in Hasbrouck Heights, Bergen County.

People call Civello, and he shows them how to get dealer’s licenses and gives them the minimal office space needed to qualify. He said he tells applicants to explain any criminal records in their applications because they’re not always an impediment, though fraud automatically disqualifies. To obtain a car dealer’s license in New Jersey, you need office space and a business address with a visible sign. You don’t need a phone, though most have one. You don’t need to physically be there, and you don’t need any cars.

“I know of guys with criminal records as tall as you are standing up who got licensed,” Civello told a reporter. “I’ve had at least 100 convicted of felonies who got licensed. I’ve had some denied too.”

Not all bad guys

Authorities acknowledge that some legitimate dealers work out of these malls. On Wednesday, for example, eight drivers stopped in from a West Virginia auction on their way to the National Auto Dealers Exchange, in Bordentown.

State police have watched the mall by helicopter and searched the warehouse. They say they’ve never seen any cars or more than a single secretary there.

“There’s no records there,” said Sgt. William Robb, head of the State Police Auto Unit. “There’s no representatives there. There’s no vehicles there. There’s nothing there.”

Most consumer deals happen in informal settings, set up through classified ads or at auctions, according to Detective Michael Kane of the New Jersey State Police Auto Unit.

“There’s no business conducted there,” Kane said. “It’s out of the back end of the car, out of a diner, at a table.”

He recalls one Bronx, N.Y., dealer charged with buying salvaged vehicles on the Internet, repairing them with stolen parts, then bribing MVC clerks to give him standard titles instead of ones marked “salvaged.”

Kane keeps at his desk a five-page letter from a New York woman who bought her car at an auction in Newburgh, N.Y., only to find it had all sorts of mechanical problems. Her dealer sent her to a repairman, but he never paid her bill as he said he would. She went looking for him, found 330 E. Commerce St. and hit a dead end.

“We get a lot of (complaints) from out of state,” Cumberland County Consumer Affairs investigator Jane McCormick said. “The people in Cumberland County would drive there and find there’s no cars there.”

State stepping in

The MVC tried in 2003 to prevent about 40 people from obtaining dealer’s licenses through the Bridgeton auto mall. An administrative law judge ruled current state law didn’t allow that, so the MVC is pushing to change the law.

Under regulations proposed this year, dealers must spend at least 20 hours per week at their place of business, have offices measuring 72 square feet, save records going back at least three years, and have at least a one-year lease on their office.

Civello said these proposals are intended to put him out of business. If they want 72-square-foot offices, he’ll build them – he has the space – but he doesn’t see how it’ll make a difference. The 20-hour rule would prevent dealers from going to all the auctions in New Jersey, New York and Pennsylvania.

“There’s three different auctions a day that you can go to,” Civello said. “How do you tell a guy to be here? How’s he going to go to auction?”

The regulations also require dealers to sell cars from their licensed locations. Tony Bush, attorney for auctions in Bordentown and Fairfield, Essex County, said the MVC’s proposals essentially would prohibit any used car dealer from acquiring cars.

“I understand they’re trying to prevent fraud, but there are better ways to do it,” Bush said.

Like Civello, Bush advises better use of surety bonds required of dealers. As it is, they’re rarely used, he said. These $10,000 bonds theoretically can be tapped for consumers who are ripped off, but they’re rarely tapped. He suggests raising them and clarifying legal language to make it clearer when they can be used.

“I’m sure there are crooked dealers there,” said Nicky Sachi, a partner in L A Motors, a Bridgeton-based company he says depends solely on auctions. “I don’t get involved. That’s politics to me. I don’t know what goes on there. We do the right thing. We pay the taxes.”