PHOENIX – Detectives with the Arizona Department of Transportation Office of Inspector General have arrested a used car dealer after he allegedly cheated customers and lenders out of hundreds of thousands of dollars through fraudulent schemes and practices.

During the course of the investigation, detectives discovered that Farhad Kankash, owner of Onyx Motorsports in Tempe, had allegedly committed several types of fraud, including failing to provide titles to customers who purchased vehicles, not paying off liens on trade-in vehicles, and defrauding lenders by obtaining multiple loans for the same vehicle.

Through a special titling process known as the director’s letter, ADOT was able to provide most of the victims with the titles they needed for the vehicles they purchased. The director’s letter process allows ADOT to provide a letter of title to the owner of a vehicle when there is sufficient evidence to show the vehicle belongs to that person.

One of the largest fraud schemes involved a customer who purchased a 2014 Bentley from Onyx Motorsports. After obtaining a loan for the vehicle from his bank, the customer was not satisfied with the car and returned it. Kankash allegedly not only did not refund the customer’s money, but obtained a loan for the same vehicle for $60,000. He then turned around and sold it to another local car dealer under the Onyx dealership name. This allowed Kankash to allegedly obtain more than approximately $200,000 from three different sources for the same vehicle.

On other occasions, Kankash is alleged to have failed to pay off the liens of vehicles traded in to the dealership leaving the customers with two vehicle loans to pay off. On at least one occasion, Kankash not only failed to pay off the lien of a trade-in, he turned around and sold the vehicle to another customer. This allowed the dealership to profit off the trade-in while leaving the previous owner of the vehicle stuck with paying it off.

Kankash also allegedly committed fraud against lending companies. On one occasion, Kankash obtained two loans from two different lending companies for the same vehicle, a 2014 Land Rover. Each loan was worth over $60,000, and Kankash used trade-in vehicles that were not his as collateral for the loans.

Kankash was arrested at his Scottsdale home on Sept. 23. He was booked into the Maricopa County Sheriff’s Fourth Avenue Jail on 14 felony counts for theft and fraudulent schemes.

In addition to fraud by licensed and unlicensed dealers, detectives with ADOT’s Office of Inspector General investigate identity theft, fraud involving vehicle title and registration, and support investigations by state, local and federal law enforcement. 

PHOENIX – Working to protect people around the country from fraud involving used cars, state investigators have broken up a major criminal operation based in the East Valley that illegally produced tens of thousands of titles for vehicles being sold in 42 states.

With seven arrests made on Wednesday, Feb. 19, this is by far the largest operation broken up since Governor Doug Ducey signed legislation in 2018 creating the Arizona Curbstone Enforcement Joint Task Force, which combines the resources of ADOT’s Office of Inspector General, Arizona Department of Revenue and Arizona Independent Automobile Dealers Association. This task force combats vehicle sales made in violation of state laws governing dealer licensing, a practice known as curbstoning.

“Our partnership with the Department of Revenue was invaluable by bringing their investigators in to assist,” said Lt. James Warriner with ADOT’s Office of Inspector General, part of the agency’s Enforcement and Compliance Division. “Together, our agencies are delivering a one-two punch to stop curbstoning and illegal vehicle sales in Arizona.”

The case involves a scheme in which individuals allegedly subscribed to one of several websites identified by investigators to obtain wholesale and retail dealer license credentials from the suspects, rather than the state, for a monthly fee, usually in the hundreds of dollars. These credentials allowed about 1,500 individuals to attend and bid on vehicles at wholesale auctions in their states.

The operation also altered vehicle titles from these subscribers for about $100 per title to make it appear as though the individuals bought the vehicles from one of the suspects’ 31 operations with dealer licenses. More than 31,000 titles were processed this way over the past couple of years, and many of the vehicles involved were never in Arizona.

The operation has generated around $7 million fraudulently over the past couple of years.

ADOT detectives and Department of Revenue investigators, joined by special agents with the Arizona Attorney General’s Office, served search warrants at six locations last week, including homes in Chandler and Gilbert and at a storefront in Mesa, arresting the suspects and searching for further evidence. Each suspect is facing multiple charges, including the felonies of fraudulent schemes and artifices, money laundering and tax evasion.

Curbstoning involves selling vehicles in a way that violates the parameters set by a dealer’s license. That could mean selling more than six vehicles in a consecutive 12-month period for an unlicensed dealer, or selling vehicles away from the designated area of sale for a licensed dealer.

In this case, licensed dealers are accused of illegally consigning their licenses out to other individuals in other states, allowing those individuals to bypass paying taxes, registration fees and laws regarding vehicle dealers.

Curbstoned vehicles typically involve other violations such as title fraud, odometer fraud and covered-up flood damage. Consumers in the market for used vehicles should do their homework before handing over any money.

When dealing with cases of curbstoning, ADOT detectives will share case information with Department of Revenue investigators and even bring them along to check out curbstoning sites.

In addition to fraud by licensed and unlicensed dealers, detectives with ADOT’s Office of Inspector General investigate identity theft, fraud involving vehicle title and registration, and support investigations by state, local and federal law enforcement.

PHOENIX – A man who allegedly used a stolen identity to purchase a sports car and stick the victim with the bill was arrested on a felony warrant after detectives with the Arizona Department of Transportation’s Office of Inspector General brought the case before a grand jury.

In March of last year, Randall Cepi, 31, concocted a scheme to use the personal information of a customer at the dealership where he was employed in Winslow to purchase a 2007 Chevrolet Corvette from a dealership in Flagstaff.

The victim came into the Nissan dealership where Cepi worked and bought a new half-ton pickup. About a week later, Cepi used her personal information to obtain a loan to buy the Corvette. He arranged to have the victim’s signature forged on the dealership and loan documents.

A few weeks later, the victim became aware of the scheme when she received insurance and loan information for a vehicle she did not purchase. She filed a complaint with ADOT’s Office of Inspector General, and detectives with the Dealer Investigation Unit opened an investigation.

The dealership in Flagstaff was made aware of the situation and called Cepi, demanding that he return the Corvette. Instead, he abandoned the sports car at the dealership in Winslow where he worked and disappeared. While searching for Cepi, ADOT detectives brought the case before a grand jury where the felony warrant was issued.

Cepi was found working at a dealership in Gallup, New Mexico where he was arrested by local authorities on July 29. He will be extradited to Arizona to face charges of fraud schemes and forgery, theft of means of transportation and taking the identity of another.

Checking your credit report after a major purchase, such as a vehicle, is a good way to make sure no one is using your information without your knowledge. Each of the major credit bureaus will provide you one free credit report each year.

In addition to identity theft, detectives with ADOT’s Office of Inspector General also investigate fraud involving vehicle title and registration, licensed and unlicensed dealers, and support investigations by state, local and federal law enforcement.