Towing company owners indicted in federal fraud conspiracy

Towing company owners indicted in federal fraud conspiracy

Towing company owners indicted in federal fraud conspiracy

U.S. Attorney’s Office, Southern District of Indiana
17 May 2019

FOR IMMEDIATE RELEASE

Men charged with defrauding bankruptcy debtors and financial institutions in Interstate vehicle title washing scheme

INDIANAPOLIS - United States Attorney Josh J. Minkler announced that a federal grand jury has indicted Brian Fenner, 44, of Indianapolis, and Dennis Birkley, 59, of Wisconsin, with conspiracy to commit mail, wire, and bank fraud. The two men were arrested by the FBI and Indiana State Police. Birkley’s company, AMI Asset Management, was also charged in the indictment.

“Those who choose to profit by peddling deception will be held accountable by this office,” said Minkler. “That is particularly true when that deception is targeted at vulnerable individuals.”

The indictment alleged that Fenner and Birkley conspired to wash motor vehicle titles of bank liens and sell the vehicles for personal profit. According to the indictment, Fenner targeted financially distressed individuals who were upside down on their auto loans. He allegedly promised to pay their bankruptcy attorneys’ fees if they turned their vehicles over to him. The indictment alleges that between 2013 and 2016, numerous individuals from all around the United States signed on with Fenner and had their vehicles towed to and stored on Fenner’s lots in Indianapolis, in exchange for what they thought would be a “free” bankruptcy.

What neither the individuals nor the banks knew, however, was that Fenner had allegedly agreed with his silent partner, Birkley, to exploit Indiana’s mechanic’s lien law to strip the vehicle titles of the banks’ liens, leaving the individuals with the debt but no collateral to return to the bank.

According to the indictment, Fenner purported to charge the individuals exorbitant “towing” and “storage” fees for bringing their cars to his Indianapolis lots. The indictment alleges, however, that Fenner never intended to collect those fees. Rather, he used the fees to get a “mechanic’s lien” on the vehicle.

A mechanic’s lien is a legal process that allows legitimate service providers, like an auto mechanic, to recoup reasonable fees for their services if a customer does not pay. Under Indiana law, if a customer does not pay the fees owed within a certain period of time, the service provider can sell the vehicle at a public auction to the highest bidder. The service provider recoups their legitimate fees and then passes on any excess money from the auction, first to any other lienholder, such as a bank, and then ultimately to the vehicle’s owner.

In Fenner’s case, however, there were no auctions. According to the indictment, Fenner and Birkley conspired in advance that Birkley and his company, AMI Asset Management, would “win” every auction. The amount Birkley would pay would be exactly equal to the amount of the sham fees that Fenner purported to charge. Therefore, there was no excess money to satisfy the bank’s lien or return to the individual.

Instead, Birkley received vehicles with titles clear of liens from banks or anyone else. Then, according to the indictment, Birkley sold the vehicles, sometimes at a real public auction, and often received thousands of dollars in profit, which he split with Fenner.

In the end, the scheme allegedly left the financially distressed individuals with no vehicles but still with the vehicle loan debt, which they were often unable to discharge in bankruptcy.

According to Assistant United States Attorney Nick Linder, who is prosecuting the case for the government, Fenner and Birkley each face up to twenty years in prison.

This case is being jointly investigated by the Federal Bureau of Investigation and the Indiana State Police, with assistance from the Department of Justice’s U.S. Trustee Program.

“The partnership between the Indiana State Police and the FBI allows joint investigations of this nature to occur and hold accountable those who seek to profit on the misery of other,” said state police Supt. Doug Carter. “This also serves as a reminder to potential victims of similar scams that offers that sound too good to be true usually have a nexus to a criminal act.”

“The charges announced today address a significant fraud scheme that caused harm to vulnerable debtors and strikes directly at the integrity of the bankruptcy system,” stated Nancy J. Gargula, United States Trustee for Indiana and Southern and Central Illinois (Region 10). “This indictment reflects the cooperative efforts among several federal law enforcement agencies that work together to combat fraud and abuse in the bankruptcy system.”

An indictment is only a charge and not evidence of guilt. All defendants are presumed innocent until proven otherwise in federal court.

In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution demonstrates the Office’s firm commitment to prosecuting complex, large-scale fraud schemes, particularly those that exploit positions of trust and vulnerable victims. See United States Attorney’s Office, Southern District of Indiana Strategic Plan 5.1