Welcome to Spodek Law Group. Our goal is to give you the reality of federal investigations targeting used car dealerships - not the sanitized version other attorneys present, not the reassuring fiction that "this only happens to the big guys," but the actual truth about what happens when federal agents turn their attention to your business. If you're reading this at 11pm because something happened today, because agents showed up or a subpoena arrived, you need to understand what you're actually facing.
Here is the truth nobody tells used car lot owners: by the time you learn about a federal investigation, that investigation has likely been running for twelve to eighteen months. The agents at your door aren't there to investigate. They're there to execute. The case is essentially complete. Everything that follows - the interviews, the document requests, the grand jury - is formality. The decision about whether to charge you was made before you knew anything was happening.
This is how federal investigations actually work, and it changes everything about how you need to respond right now.
They Already Know More Than You Think
The Suspicious Activity Report system is something most business owners have never heard of. And that ignorance is exactly how the system was designed to work. Your bank is required by federal law to file a SAR whenever they see transaction patterns that suggest potential criminal activity. Deposits just under $10,000. Large cash transactions. Patterns that look like you might be avoiding reporting thresholds. Unusual wire transfers. Customer behavior that seems inconsistent with their stated business.
The threshold for filing a SAR is remarkably low. Banks dont need to prove anything. They dont need to believe a crime has occured. They just need to see something that makes them uncomfortable. And since banks face massive penalties for failing to report suspicious activity, they err on the side of reporting everything. Your bank would rather file a hundred unnecessary SARs than miss one that later becomes a federal case.
Heres the part that matters. When your bank files a SAR, they are legally prohibited from telling you. Federal law makes it a crime for the bank to notify you that a report was filed. So your bank - the same institution you've deposited into for fifteen years, the same people who know your name and ask about your kids - has been documenting your activity and sending reports to the Financial Crimes Enforcement Network. You were never notified. You were never supposed to be.
Those reports sit in a FinCEN database accessible to every federal agency. IRS Criminal Investigation. FBI. ATF. When they open a case, they dont start from scratch. They pull your SAR history. They already have years of your banking patterns mapped before an agent ever drives past your lot.
This is why federal investigations feel like ambushes. Becuase they are. The asymmetry is intentional. They had months or years to build their case. You have days to respond.
What Small Problems Become Federal Cases
Used car lot owners think federal investigations are about cartels and money laundering. The big stuff. The serious criminals. That perception is dangerously wrong.
The feds are increasingly targeting what the industry considers normal business practices. Odometer discrepancies. Title paperwork issues. Cash handling patterns. The stuff every lot owner has either done directly or looked the other way on when employees did it. These arent state regulatory matters anymore. Under 49 U.S. Code § 32703, odometer fraud is a federal crime carrying fines up to $250,000 and three years in federal prison. Per violation. Not per scheme. Per vehicle.
Consider what that means for a typical lot. One San Antonio dealership manager - not even the owner, a manager - received six months federal prison for odometer tampering on vehicles at the lot. A Georgia scheme involving 310 vehicles resulted in nearly $576,000 in restitution orders. These werent sophisticated criminal enterprises. These were used car lots doing what used car lots have always done.
Todd Spodek has seen this pattern repeatedly in federal cases. What clients thought were minor paperwork issues, things that might get a fine from the state DMV, turned out to be federal felonies with years of exposure. The mentality that "everyone does it" doesnt provide any protection when the feds decide your lot is the one they're going to make an example of.
Theres another element most lot owners dont consider: employee liability becomes owner liability. When your employee rolls back an odometer, you can be charged under a "knew or should have known" standard. Prosecutors dont have to prove you personally turned the numbers back. They have to prove you created an enviroment where this happened, that you should have had systems to catch it, that you benefited from the fraud. The manager in San Antonio went to federal prison - but the investigation dosent stop with the employee. It follows the chain upward.
The Floor Plan Trap That Destroys Dealerships
If your lot uses floor plan financing, you need to understand something about how those arrangements can become federal wire fraud charges. Floor plan lenders have loss recovery departments that work directly with federal prosecutors. When they discover discrepancies - a vehicle sold but the loan not paid off, collateral values that dont match documentation - they dont just file civil suits. They make criminal referrals. Simultaneously.
Mitchell Simpson ran a used car operation in Georgia. His floor plan relationships looked like normal dealership financing. The discrepancies looked like paperwork issues. What actually happened: he was convicted of federal wire fraud for a $3 million scheme and sentenced to three years and five months in federal prison, plus three years of supervised release, plus over $105,000 in restitution.
The Nashville case is worse. A dealer named Janbakhsh used his Auto Masters dealerships to inflate collateral values with Capital One and First Tennessee Bank. The scheme operated for four years. The amount: $26.4 million. The maximum sentence hes facing: thirty years federal prison.
If you have floor plan financing and there are ANY discrepancies between your documentation and actual inventory - any vehicles sold but not paid off, any values that dont match - you need to understand that what looks like a civil dispute to you looks like wire fraud to federal prosecutors. The floor plan lender's lawyer and the Assistant U.S. Attorney may already be talking.
What makes floor plan cases particulary devastating is the parallel proceeding problem. The civil suit and the criminal investigation run simultaneously but they arent coordinated for your benefit. Discovery in the civil case can produce evidence that feeds the criminal case. Admissions you make trying to settle with the lender become confessions the prosecutor uses to convict you. Your civil defense attorney and your criminal defense attorney may be working at cross purposes - and if you only have one attorney handling both, you may be getting advice thats optimized for the wrong case.
Why Cash Became Your Biggest Liability
This is where most used car lot owners get blindsided. Cash is legal. Using cash is legal. Receiving cash from customers is legal. But structuring cash deposits is a federal crime - and the kicker is that the source of the money is completly irrelevant.
Section 5324 of Title 31 makes it illegal to structure transactions to avoid bank reporting requirements. If you deposited cash in amounts just under $10,000 to avoid triggering Currency Transaction Reports, you committed a federal crime. Doesnt matter if every dollar was legitmate business income. Doesnt matter if you owed no additional taxes. Doesnt matter if you did nothing else wrong.
The penalty: up to five years in federal prison. Per transaction pattern.
How do they catch this? Your bank files SARs on suspicious patterns. Multiple deposits at $9,500. Cash coming in, then immediately transferring out. Deposits at different branches on the same day. Banks are trained to spot structuring becuase the feds have made them financially liable if they dont report it. Your bank has more incentive to report you than to protect you.
And heres what makes structuring cases so dangerous: civil asset forfeiture. The government can seize your money, your accounts, your business assets - without ever charging you criminally. The burden of proof flips. You have to prove the money wasnt connected to illegal activity. Many people lose everthing without ever seeing the inside of a courtroom.
Clock running. If you've been depositing cash in patterns that avoided the $10,000 threshold, even with completley legitimate money, you may already be in a FinCEN database as a suspected money launderer.
The PPP Loan Time Bomb Still Ticking
Did your lot receive PPP loans during the pandemic? Did you get forgiveness? You probably think that chapter is closed. Its not.
The Small Business Administration has ten years to audit PPP loans. The criminal statute of limitations doesnt start until discovery of the fraud - meaning 2020 loans could potentially be prosecuted well into the 2030s. Forgiveness didnt mean the government forgot. It meant they're still deciding who to prosecute.
A Massachusetts used car dealer named Bill Dessaps was charged in a multi-state PPP scheme. His dealership's application falsely stated forty employees and average monthly payroll of $334,720. That application, submitted during the chaos of 2020 when everyone was desperate, is now a federal wire fraud charge. One defendant in a related PPP case involving multiple fraud schemes faces up to 170 years in prison.
Ask yourself honestly: Was your PPP application perfect? Did the employee numbers match exactly? Did the payroll calculation follow every requirement? Did you use every dollar exactly as specified? Because prosecutors are going through those applications now, years later, comparing them to your tax records, your employee records, your bank statements. The documents exist. They dont disappear. And the feds have unlimited time to decide when your file gets reviewed.
The investigation pattern for PPP fraud is particulary insidious. Prosecutors dont need to prove you intentionly lied. They need to prove you made a false statement. The difference is critical. If your accountant gave you bad numbers, if you miscounted employees during a chaotic period, if you genuinely believed your payroll justified the amount you requested - none of that is a defense if the numbers were wrong. The statement was false. That's the crime. Your intent goes to sentencing, not guilt.
If theres any discrepancy between your PPP application and your actual business records from 2020, that discrepancy is potentially a federal wire fraud charge waiting to be filed.
What Happens When Federal Agents Arrive
By the time federal agents show up at your lot, the investigation is aproximately ninety percent complete. They're not there to figure out what happened. They're there to collect the remaining evidence they need and to see how you respond. Everything you say, everything you do, every document you provide or dont provide - its all being evaluated.
The federal conviction rate is between 93 and 97 percent. Not a typo. They only bring cases they're certain to win. If they're at your door, theyve already decided your guilty. The trial, if there is one, is just ceremony. What matters now is damage control - and theres a very narrow window where damage control is still possible.
Dont talk to agents without an attorney present. Anything you say can and will be used against you. More importantly, lying to a federal agent is itself a federal crime - 18 U.S.C. § 1001 - carrying up to five years in prison. Seperate from whatever they're investigating. People go to prison not for the underlying crime but for the lies they told trying to explain it away.
Dont destroy documents. Dont delete files. Dont wipe phones. Obstruction of justice carries its own federal penalties and prosecutors love obstruction charges becuase they're easy to prove. They show consciousness of guilt. They destroy any possibility of appearing sympathetic to a judge. One bad decision in the first 24 hours can add years to a potential sentence.
The Narrow Window You Have Right Now
If you've received a target letter, if agents have visited, if you've been served with a grand jury subpoena - you have options that will disappear the moment an indictment is filed. Pre-indictment is the only time you have leverage.
Cooperation works diffrentley before charges are filed. Prosecutors have discretion. They can decline to charge. They can reduce charges. They can recommend lighter sentences. But this window closes fast, and cooperating wrong is worse than not cooperating at all. A proffer session - "queen for a day" - has specific rules. Violations can be used against you. The process requires an attorney who understands federal criminal practice, not just any lawyer.
Spodek Law Group handles federal criminal defense for business owners facing these exact situations. Todd Spodek understands that what you're experiencing right now is probably the most terrifying thing that's ever happened to you professionaly. The business you built over years or decades is suddenly at risk. Your freedom is potentially at risk. Everything you worked for feels like its collapsing.
That fear is legitimate. But fear without action is just paralysis. And paralysis in the face of a federal investigation is the worst possible response.
The decisions you make in the next few days - who you talk to, what you say, which attorney you hire, how you respond to document requests - will determine whether this investigation ends with a declination, a plea to reduced charges, or a trial you're statisticly certain to lose. The math is brutal: every choice narrows or expands your options. Making no choice is itself a choice, and its almost always the wrong one.
The Math Nobody Wants to Discuss
Lets talk about what federal sentencing actualy looks like for used car lot cases. Sentencing is driven by loss amount. The more money involved - the value of fraudulent loans, the amount of structuring, the scope of odometer fraud - the higher the sentencing guidelines calculation. A $3 million fraud scheme resulted in three and a half years prison for Mitchell Simpson. A $26.4 million scheme has Janbakhsh facing up to thirty years.
Restitution is mandatory in fraud cases. The Mandatory Victims Restitution Act requires judges to order repayment. No discretion. If you're convicted, you're paying back what you took, plus interest, plus penalties. The Georgia odometer case resulted in nearly $400,000 to one defendant and nearly $177,000 to another. On top of prison time.
Forfeiture is separate. Assets can be seized that are connected to the offense or represent proceeds from it. Your business. Your inventory. Your real estate. Personal assets if the corporate veil gets pierced. Bank accounts frozen before trial even begins, making it impossible to operate the business or pay for defense.
And after prison: supervised release. Years of reporting to a probation officer. Restrictions on travel. Drug testing. Employment verification. One violation and you're back in federal custody.
The math also includes collateral consequences that dont show up in sentencing guidelines. Federal felony conviction means you cant own firearms. Ever. It means background checks for the rest of your life show the conviction. It means professional licenses may be revoked or denied. It means some countries wont let you enter. It means bonding and insurance become nearly impossible to obtain. The sentence itself is just the beginning of how a federal conviction reshapes your entire life.
This is the full picture. This is what "federal investigation of your used car lot" actually means in practical terms.
What Spodek Law Group Does Differently
Federal criminal defense is not regular legal practice. The rules are different. The stakes are different. The prosecutors are career federal attorneys with unlimited resources and conviction rates that would be impossible in state court. You need representation that understands this world.
When you call Spodek Law Group at 212-300-5196, you're not getting a general practice attorney learning federal procedure on your case. You're getting attorneys who handle federal criminal matters specificaly, who understand how federal investigations develop, who know what prosecutors look for and what defense strategies actualy work.
The call costs nothing. The information you'll get about your situation costs nothing. What does cost - enormously - is waiting. Every day without representation is a day where you might make a mistake that cant be fixed. A conversation with an agent. A document decision. A statement to a business partner that becomes a witness statement.
They had years to prepare this case. You have days to respond. The window between learning about an investigation and being indicted is the only time you have real options. Once charges are filed, most of those options disappear.
The next 48 hours may determine the next decade of your life. How will you use them?
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