Is Exporting Luxury Automobiles a Crime?

According to an affidavit filed in federal court, auto manufacturers have contracts with U.S. dealerships allowing domestic-only car sales and transactions and specifically prohibit international sales. If vehicles are illegally exported, it causes "financial problems" for manufacturers. The federal government claims that businesses purchasing new luxury cars from dealerships in the United States and selling them to other companies, which then ship them to China, are potentially violating customs laws and deceiving auto manufacturers which try to keep tight control over sales to domestic dealers and to foreign countries.

In cases of illegal exporting, foreign brokers receive orders for specific cars or car types from potential buyers. The brokers then use the Internet to find "straw buyers," or people who use broker funds to buy the cars in exchange for small profits. The straw buyers then purchase the cars from dealerships, which are not told the vehicles will be exported, and the cars are then taken to ports and transported overseas.

Only two cases have been successfully prosecuted: in one, two California men pleaded guilty in the spring to charges of mail fraud and violating US customs law for planning to export 93 cars worth over $5.5 million, but they were not given jail time. Unfortunately, the Government has concealed from the courts the fact that there is ABSOLUTELY NOTHING illegal about exporting a vehicle, and they appear to be choosing to treat the various car dealerships as "victims" in a victimless "crime".
Charges are based on the possibility of fraud, either through the use of "straw buyers" who misrepresent their intended use of the vehicle to the dealership, or through discrepancies in U.S, Customs law regarding the definitions of "new" vs. "used" in customs export declarations. In the previously mentioned case, the mail fraud count apparently arises from allegations that the defendant caused straw buyers not only to purchase luxury cars for re-sale abroad but also had them register themselves as New Hampshire residents who then obtained New Hampshire driver's licenses under false pretenses. The fraudulent export declaration count arises, in part, from the defendant's representation on a shipper's expert declaration that the exported automobile was "used" as opposed to "new."

The export of any and all merchandise from the United States must comply with all United States statutes and regulations related to exportation. The relevant regulations do not prohibit the export of new cars. Instead, they establish rules for exporting used cars. According to these rules, a person attempting to export a used car must present to Customs certain enumerated documents that clearly identify the vehicle and the Vehicle Identification Number. The documents may be Certificates of Title or a Manufacturer's Statement of Origin. The regulations define the term "used" as "any self-propelled vehicle the equitable or legal title of which has been transferred by a manufacturer, distributor or dealer to an ultimate purchaser."
The Secret Service and Homeland Security have become involved in this so-called "scheme" with the intent of seizing millions of dollars worth of property and cash assets. It is anticipated that most defendants will be offered plea deals which allow the government to keep these assets in exchange for probation and small fines. If you or someone you know has been targeted by the federal government in a case involving Mail Fraud, Wire Fraud or U.S. Customs law you have constitutional rights that should be protected.


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