A New York judge on Monday sentenced a car dealer to 60 months in prison and ordered him to pay nearly $4 million in restitution for tampering with hundreds of vehicle odometers.
From 2006 to 2011, Shmuel Gali, 48, altered the mileage of an estimated 690 used vehicles he had purchased, then sold them at wholesale auctions in Pennsylvania and New Jersey, according to court documents. On average, odometers were rolled back by more than 69,000 miles.
Also heavily involved was Gali’s brother, Chaim Gali, 46. The two brothers bought the vehicles in Florida, Maryland and Missouri using fake dealer names. Pennsylvania issued vehicle titles reflecting the altered mileage figures, which the Galis gave to their buyers at the auctions.
The falsified lower mileage numbers led to more profitable sales. The brothers deposited the money into multiple bank accounts, mainly in New York City, and used it to buy more cars, court documents said.
Judge Kiyo Matsumoto of the Eastern District of New York handed down the sentence. NHTSA’s odometer fraud investigation division and the IRS’ criminal investigation unit investigated the matter.
“Automobile sales stand as one of the pillars of the American economy, requiring transparency and integrity,” Thomas Fattorusso, an IRS criminal investigation acting special agent in charge, said in a statement. “The financial expertise of IRS-CI was needed to uncover this criminal enterprise perpetuated by Shmuel Gali who received a just sentence relative to his criminal activity.”
Shmuel Gali pleaded guilty to various charges — conspiracy to commit money laundering; conspiracy to commit odometer-tampering; making false odometer statements; and securities fraud — last August.
Chaim Gali owned Conestoga City Autos, a licensed vehicle dealer in Manheim, Pa. Both brothers were authorized representatives of Chase Auto Center Inc., another licensed vehicle dealer in Manheim.
Chaim pleaded guilty to the same charges and also was sentenced Monday, to a year and a day in prison, a U.S. Department of Justice public information officer confirmed.
Automotive News has reached out to Shmuel Gali’s attorney for comment. Two federal prosecutors in the case declined to comment.
