Owner of Car Dealership Charged in Large-Scale Fraud Scheme

Topics:  Afzal Khan

U.S. Attorney's Office
23 December 2014

Company Agrees to Pay $59.4 Million Criminal Fine

NEWARK, NJ—A complaint charging the owner of a Ramsey, New Jersey, auto dealership with allegedly engaging in a pattern of fraudulent activity through his business has been unsealed, U.S. Attorney Paul J. Fishman announced today.

Afzal Khan, a/k/a “Bobby Khan,” 32, of Egg Harbor Township, New Jersey, was charged by complaint with one count of wire fraud. He is currently being sought by law enforcement.

According to the complaint unsealed today in Newark federal court:

From at least December 2013 through September 2014, Khan, through Emporio Motor Group, engaged in acts to defraud lenders to Emporio and customers of the dealership.

As part of his criminal activities, Khan obtained loans from the auto finance division of a large bank for cars that he never delivered, but for which the purchaser was still responsible. He also obtained loans from the bank for cars that were delivered, but for which neither he nor Emporio had title. As a result, the purchasers of these cars were liable for the loan, but could not register the vehicles. In addition, Khan offered to sell cars for individuals on consignment, and then neither returned the cars nor provided any money from car sales.

For example, Emporio submitted a loan application in February 2014 for approximately $150,000 in connection with the sale of a 2013 Rolls Royce. The victim who had intended to purchase the car had signed the necessary paperwork for the purchase and financing of the car, but never received the vehicle. Khan himself sent some loan payment checks—some of which he stopped or were returned for insufficient funds—but failed to pay the balance on the car. The true owner of the Rolls Royce told law enforcement that it had never even been sold to Khan or left the owner’s possession.

As a result of Khan’s actions, the bank is exposed to a potential loss of more than $1.7 million. To date, more than 75 individuals have filed complaints concerning Khan’s actions at Emporio.

The charge of wire fraud carries a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000 or twice the gross profits to Khan or twice the gross loss suffered to the victims of the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; as well as officers of the Bergen County Prosecutor’s Office, under the direction of Prosecutor John L. Molinelli, and the Borough of Ramsey Police Department, under the direction of Chief of Police Bryan H. Gurney, Chief of Police, with the investigation. The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark. The charges and allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.