September 24, 2008 in City

Car dealer must make restitution in fraud

Plea bargain puts man on one-year probation
By The Spokesman-Review
 

A former used car dealer must make $286,000 in restitution to buyers and funding sources after pleading guilty to four felonies in Spokane County Superior Court.

As part of a plea bargain, Theodore N. Saroff avoided a jail term but must complete 12 months of probation and make the restitution.

Saroff operated Spokane Auto Sales at 3011 E. Sprague, where he sold used cars whose titles were being held by financing companies providing “flooring” for such operations, according to court records. In exchange, the flooring companies are given the titles to the cars on the lot as collateral.

Saroff is accused of defrauding National Northwest and Auto Finance Corp., both of Spokane, and Auto Use, an automobile flooring company located in Andover, Mass., by giving them titles to cars he previously had sold, court documents say.

He was sentenced Friday by Superior Court Judge Maryann Moreno. As part of his sentence, Saroff will be booked into jail today for a photograph, fingerprints and a DNA sample before being released.

He was charged in July 2007 with nine felonies before striking the plea bargain this summer.

The 57-year-old used car dealer, stripped of his dealer’s license by the state Department of Licensing, pleaded guilty to making a false statement on a certificate of ownership and three counts of first-degree identity theft.

According to charging documents, Saroff provided the three funding sources with titles to vehicles that he had already sold. National Northwest and Auto Use were each defrauded out of $150,000 and Auto Finance was defrauded out of $120,000, court documents say.

After learning of the scheme, National Northwest co-owner Angela Braun confronted Saroff in February 2007 and seized property to settle all but $44,000 of the amount owed, the documents say.

Shortly thereafter, state investigators discovered that Saroff lied when he told the state on June 10, 2006, that he had lost the title application for a 2004 Toyota truck. Saroff admitted that conduct in pleading guilty to the count accusing him of making a false statement.

In one identity theft count, Saroff admitted stealing the identity of Joseph M. McClure in January 2005 to obtain credit, money or services in excess of $1,500, in violation of state law.

McClure owned a 1995 Ford pickup that he sold to a friend. Saroff somehow ended up with the vehicle’s title, which he fraudulently used to obtain financing, the court documents say.

In the other two identity theft charges, Saroff admitted similar conduct involving the identities of James F. Philips and Michael J. and Anne K. Orsi, the documents say.


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