Federal probe of luxury car exports
A luxury automobile dealership and at least one area man have been named in a federal investigation into an alleged scheme to export high-end cars to foreign countries through the use of straw buyers, according to civil complaint filed this week in federal court in Columbia.
The complaint was filed along with warrants to seize a dozen vehicles and two bank accounts belonging to companies in Charleston and Houston that intended to export the vehicles, according to court documents. Criminal charges have not yet been filed in the case, which involves agents from the U.S. Secret Service, the State Law Enforcement Division, the Richland County Sheriff’s Department and Columbia City Police.
Among those named in the complaint is Myrtle Beach Automotive, which sells BMW and Mercedes automobiles at its location on Jason Boulevard in Myrtle Beach. According to the complaint, Martin Burke – who allegedly recruited straw buyers – told investigators he was introduced to the Charleston exporters by a Myrtle Beach Automotive salesman. That salesman told Burke that he had been selling cars to the brokers through straw buyers for two years and “if you did it the right way” it would be O.K., according to the complaint.
Steve Rollins, general manager of Myrtle Beach Automotive, could not be reached for comment Friday. The complaint does not say where Burke lives.
Edward Sweet of Conway also is named in the complaint as the alleged straw buyer of a $70,528 Porsche Cayenne from a dealership in Columbia. Sweet could not be reached for comment.
Automobile manufacturers generally prohibit the sale of cars in the U.S. to people who intend to export them for sale in another country, and there are stiff financial penalties for dealerships that knowingly sell their cars for that purpose. To get around those rules, some exporters use straw buyers – people who pretend the car is being purchased for their personal use. Exporters give the straw buyers money to purchase a vehicle and the automobile is then transferred to the exporter after the sale. Exporters typically pay each straw buyer a fee for making the purchase.
Exporters work to get around the rules because luxury cars cost much more in countries such as China – where these automobiles were headed – than in the U.S. The exporters can sell cars to foreign customers for less than it would cost to purchase the same car in that country, yet still make a profit. The scheme, which usually involves counterfeit titling of automobiles, often leads to mail fraud and wire fraud charges against the perpetrators.
Burke told investigators that he recruited Sweet to be the straw buyer for the Porsche, according to the complaint. Burke – who said he and his wife manage beach rental properties for a living – told investigators he also recruited family members to purchase eight luxury BMWs for the exporters.
According to the complaint, Burke drove Sweet to the Columbia dealership on April 13 and then left Sweet at the dealership. After the sale, federal agents followed Sweet for about a mile to a Lowe’s hardware store parking lot, where Burke was waiting. About an hour later, a vehicle transport truck arrived and the driver – along with Burke and Sweet – started to load the Porsche onto the truck. Federal agents stopped the men, seized the vehicle and learned the Porsche was supposed to be taken to a port in New Jersey, according to court documents.
Alex Turkayev – owner of Charleston-based Automotive Export, one of the exporters named in the complaint – told a federal agent that a $60,000 BMW in the U.S. would sell for about $160,000 through a traditional car dealer in China, because of that country’s high tariffs. Turkayev said salesman at several dealerships knew about the scheme and would contact him on a regular basis to let him know about new inventory, according to court documents.
In addition to the Porsche that Sweet purchased, federal agents have seized 11 luxury cars they believe are part of the export scheme, including another Porsche Cayenne, a pair of BMW X5s and eight Mercedes 350 and 450 models. Nearly $183,000 was seized from the exporters’ bank accounts.
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