This car auction scam story is a little painful to tell and to remember. I gained the position as the mechanical reconditioning manager at a south Florida automobile resale facility.
It's owned by one of the largest auction chains in the United States. Unfortunately, one of my trusted mechanics was rigging sale units for a used car dealer that payed him on the side.
We're not sure how long this went on, but I can guess it happened for months if not longer. After being caught the mechanic said he originally asked the dealer to buy cars for his friends and family. This is a violation of the auction house rules.
The mechanic claims the dealer then approached him with a cash under the table offer to steer his purchasing agent towards the best cars on sale day.
This then grew into the car dealer talking the mechanic into creating special deals for him. Here's how it worked. The mechanic would build a problem into the automobile well before the sale day.
Most often he would go big and rig a major system to greatly reduce the hammer price. However, we latter discovered that he would disable the vehicle in many different and clever ways to
avoid detection. This is what happens when you give the keys to the fox watching the hen house.
The mechanic knowing how the system worked would make the car appear to have major drive train problems even though it did not. Let me give you some examples.
We caught him draining out the hydraulic fluid on the clutch system of a manual transmission vehicle. This would stop it from going into gear and would cause the car to appear to have a clutch or transmission problem.
The auction would then push it through the sale and his dealer buddy bought it for pennies on the dollar. To complete the scam the mechanic would then go to this dealers lot to fill and bleed the clutch system.
This restored the vehicles full retail value. Another trick he used was putting 2-cycle oil mix in the fuel tank.
This would cause the vehicle to blow blueish smoke. A dreadfully effective tactic to drive down the hammer price.
People looking at the car running could only assume the engine was worn out and burning oil.
We discovered this after he was caught rigging the wrong car. The owner of the Jaguar stated his engine didn't smoke until they dropped it off at the facility.
The employee in question evaluated this particular automobile. The auction house sent a fuel sample out and
confirmed it had something extra in it. Oil that is, black gold Texas Tea.
In fact, he added just the right amount of oil to the fuel system to cause smoking, but still let the engine run well. You can think of it like a 2 stroke outboard motor. Two cycle engines will smoke heavily at idle especially when the motor is cold.
This mechanic new exactly when to rig the cars. When the auction would receive heavy loads of vehicles this is when he would strike.
All the staff would rush around checking in the vehicles and preparing them for the next sale day. This would allow the shady mechanic to red light a few vehicles without suspicion.
He would then supply the dealer with the stock and run numbers of the vehicles, so he would know which ones to bid on.
To end the story, the crooked guys were not prosecuted in exchange for their information on how the scam worked and all of the names of the people and dealers involved in it.
The auction manager thought it would be more valuable to know how this dealer could buy auction cars and influence mechanics to break the rules. An auction company makes plenty of money, but loses more then you would think.
Many crooked dealers are willing to take big chances to buy auction cars cheep. The business is based on the principle of buying low and selling high. Never underestimate the power of money.
I hired this
mechanic and he passed a background and drug test. He went to church and
loved his family, but it didn't stop him from crossing the line.
Yes, I worked for an auction service and learned many things about this side of the automotive business. Follow this next link to see other stories I share on the car auction subject.
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