NADA Cautions Dealers to Be Alert for Fraud Scheme
McLEAN, Va. — The National Auto Dealers Association issued a fraud alert this week, saying that the U.S. Department of the Treasury is investigating cases where individuals are using counterfeit documents that appear to be issued by the Treasury Department to purchase or attempt to purchase vehicles from auto dealerships or pay off debts.
Apparently, the Treasury Department was informed in September that an individual attempted to purchase a $67,000 car at a dealership in Phoenix, Ariz., utilizing a bogus promissory note and bond.
In this case, the purported value of the note was $75,000 and the bonds were purported to represent government obligations of $150,000, and in another case, up to $900 million.
"The types of notes and bonds may or may not be referenced as ‘U.S. Treasury' bonds or promissory notes. However, they are identified as ‘personal promissory notes' and/or ‘private offset bonds,' and often contain the name of the Secretary of the U.S. Treasury — currently Henry Paulson — on the document," NADA officials reported.
The NADA explained that the name of the Treasury Secretary does not appear on any document listed as a private bond or promissory note since these items are not backed or guaranteed by the U.S. Treasury.
"Moreover, the only type of paper bond issued by the U.S. Treasury that a citizen can purchase today is a U.S. Savings Bond. All other Treasury bonds are electronic transactions and the buyer does not receive an actual hard copy document," executives highlighted.
Apparently a similar scheme was also identified in Indiana.
It was reported to the Treasury Department that unauthorized individuals were providing auto dealerships and other retail businesses with bank routing and account numbers to purchase vehicles or other property, and/or to pay off personal debts.
These individuals represented the account and routing numbers to be personal grant or bank accounts, and directed the dealerships to electronically debit these accounts to fund payments for their purchases. In the reported case, the account was a Treasury Department account for vendors or businesses to electronically transmit payments, the NADA indicated.
"If you have any information regarding such Treasury-related fraudulent activities, we request that you contact the Department of Treasury, Office of Inspector General (OIG), Office of Investigation's Hotline at (800) 359-3898, or e-mail Hotline@oig.treas.gov," NADA officials said.
"Car dealerships approached by individuals engaging in these type of activities should consider the potential for fraud. If you suspect fraudulent activity, it is recommended that you contact the OIG Hotline or the local police immediately. Additional information regarding this and other similar fraud schemes can be found at the following Department of Treasury Web site at www.treasurydirect.gov/instit/statreg/fraud/fraud_bogussightdraft.htm," executives concluded.