HUNTINGTON — Three Kentuckians have been indicted by a West Virginia federal grand jury for their alleged part of a scheme that cost a car company $4.5 million, joining two others previously indicted.
James Pinson, 44, Gary Conn, 56, and Tammy Newsome, 53, of Kentucky, have been indicted on 10 counts of fraud and identity theft. Newsome is additionally charged with aggravated identity theft.
The trio joins Frank Russo, 68, of North Carolina, and Kevin Fluharty, 58, of West Virginia, who have already been indicted for the scheme. At the time of the alleged scheme, Russo was the service manager at a car dealership in St. Albans, West Virginia, and Fluharty was a notary public who authorized signatures of customers who sold their trucks back to the car manufacturer as part of the program, according to the indictment.
All five defendants face up to 30 years in prison if convicted.
According to U.S. Attorney Mike Stuart, Pinson, Conn and Newsome organized and participated in a scheme to misuse a car company’s warranty extension program that offered to repurchase certain trucks with excessive rust damage for 150% of their value, as long as the trucks were owned by individuals and not a dealership.
Participants in the scheme would buy the trucks at wholesale prices at auction through Pinson’s car dealership, Big Blue Motor Sales of Louisa, Kentucky. Conn worked as the sales manager at the Kentucky dealership and Newsome performed administrative tasks for the business. Pinson also had a branch of the company located in Barboursville at the time of the scheme.
The group then obtained hundreds of copies of Kentucky and West Virginia driver’s licenses and used those to “purchase” the vehicles and title the trucks into the name of those residents without their knowledge.
The trucks would then be transferred from Big Blue Motor to a dealership in St. Albans, at which time Russo would send the information to the company that authorized the buybacks.
Fluharty is accused of falsifying the final repurchase documentation by allowing the co-defendants to forge the false owners’ signatures on the final documents.
The indicted defendants ran about 350 trucks through the scheme between 2013 and 2015, causing about $4.3 million in losses to the car company, Stuart said.
Although the indictment did not identify the car manufacturer, at the time of the alleged scheme, Toyota offered a buyback program for trucks that had their frames rusted out. Toyota’s policy for the buyback was to purchase the affected vehicles for 1 1/2 times their value, based on the Kelley Blue Book calculation for vehicles in “excellent” condition.