A sign For Autos R Less advertises used car services in Medicine Hat at its location in this 2015 file photo. The owners of the defunct business pleaded guilty to fraud this month admitting to reselling cars with outstanding loans to unsuspecting customers and failing to pay off loans before as called for in sales agreements. They are ordered to pay $480,000 in restitution.--NEWS FILE PHOTO
cgallant@medicinehatnews.com@CollinGallant
A Medicine Hat couple convicted of fraudulent dealings at their used car business are required to pay $480,000 in restitution, and the man will spend two years behind bars.
Darren Craig Brown and Tammy Monique Moroz pleaded guilty on Nov. 1 to separate single charges of fraud valued above $5,000 – namely reselling vehicles without informing new owners of outstanding liens, as well as keeping cash on trade-ins and refinancing deals rather than paying off existing loans.
They appeared at the Medicine Hat Provincial Court proceeding that day including the pleas and sentencing, but deferred making any statements to their lawyers, Vince Guinan and Scot Hadford, respectively.
Crown prosecutor Tony Bell said investigators have determined that 14 former customers of the dealership are each owed between $13,520 and $66,129 because uncleared liens are payable by the current owners.
They unwittingly became responsible for thousands of dollars of added costs or faced the repossession of their cars.
In one case, a would-be car-buyer cancelled her purchase but the dealership still processed her loan application with a major bank and received $47,652, for which the victim is responsible.
Autos R Less operated on 10th Avenue in Medicine Hat’s Light Industrial Area until its licence was suspended in a July 2018 bulletin from the Alberta Motor Vehicle Industry Council due to consumer complaints.
Court documents obtained by the News states in an agreed statement of facts that over 10 months leading up to the suspension, “Brown made numerous withdrawals from the Autos R Less (bank) business account to his personal bank account … causing the Autos R Less Account to be overdrawn.”
He and Moroz were in a common-law relationship at the time and co-owners of the business, which Moroz inherited and was manager.
The Dunmore woman is now subject to a two-year community sentence for her actions, according a deal reached between defence attorneys and prosecutors.
Court heard that Brown now works out of town in the road building industry and suffers from several medical conditions. His lawyer requested that consideration be made that the sentence be served at the Bowden minimum-medium security facility.
The agreed statement of facts, signed by both defendants, says that in 2017, a woman agreed to refinance a $28,000 loan on her 2011 Toyota Tacoma through the dealership. Autos R Less handled the transaction, but did not use the proceeds to repay the original loan.
She continued to pay both loans to avoid repossession, and is now owed $34,000, including additional interest.
A similar situation occurred in early 2018, leading to added $9,430 additional charges to the owner who carried two loans on a GMC pickup.
Another man who upgraded His 2014 Ford Fusion to a 2016 model was required to continue initial loan payments after Autos R Less failed to extinguish the original loan. It was resold and eventually totalled in an accident, but the insurance payout was issued in a joint cheque to the old and new owner, leading to a legal gridlock for both parties.
In April that year, Brown and Moroz advised another customer for whom they’d refinanced a loan with TD Bank to stop payments to original financing company, Carfinco. That company subsequently seized and sold the 2017 Hyundai Elantra in question, though she was up to date on the second loan.
Also in Spring of 2018, the dealership used financing to acquire then resell a 2017 Dodge Journey, but failed to cover that loan and stopped payments in 2019, when it apparently stopped operating. The car’s current owner is barred from selling the car until the two liens representing the same amount are paid.
A total of seven instances involved auto-industry financing company Nextgear, which provides financing to dealerships related to acquiring inventory. In those cases, Autos R Less resold the vehicles but didn’t extinguish their loans even though sales contracts stated the vehicles were free of encumbrances or liens.
[Editor’s Note: This article has been edited to correct an inaccuracy in the dealership’s last address.]
