Boca Raton luxury car case spawns 26 police reports and flurry of lawsuits – Sun Sentinel

It looks like luxury car enthusiasts will have a long wait to resolve claims they suffered from a Boca Raton dealership that filed for bankruptcy after all of its inventory vanished from its showroom last month.

Several customers, financiers and former business partners who can afford to trade Lamborghinis, Ferraris, McLarens and Maseratis like children trade baseball cards are battling on many legal fronts over no less than 90 high-end vehicles with disputed ownership, missing titles, unknown locations, or all three.

Disputes over the ownership of premium vehicles sold by Scott and Kristen Zankl through companies they control in Broward and Palm Beach counties have been swirling since early April, when customers noticed that luxury vehicles were pulled from the Excell Auto Group showroom on Clint Moore Road in Boca Raton. . When the business closed for good and declared bankruptcy on April 8, creditors and customers who claimed they were owed title or vehicles sprung into action, filing civil lawsuits and summoning the police.

Boca Raton police admitted this week to opening 26 cases related to allegations of fraudulent activity at the Clint Moore Road dealership. Citing Marcy’s Law, the department will not release the names of the accusers or any details about their allegations.

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Incident reports obtained by the South Florida Sun Sentinel show officers were called to the dealership 26 times between March 23 and April 19. Fifteen of the reports were qualified as fraud complaints. “The victim said he never received any money after selling a car through Excell Auto,” an officer wrote on April 19. On April 7, the victim said he purchased a vehicle that was never delivered, according to another report. On March 23, the seller said the dealership never paid the balance owing on their trade-in.

In the weeks since customers filed complaints, seven civil cases were filed in Palm Beach County. Two were filed in Broward County. And a long list of creditors are lining up in federal bankruptcy court to fight for whatever remains of Excell’s assets.

None of the clients who identified themselves in court filings as victims agreed to be interviewed for this news article. They know there’s little public sympathy for people who can afford to spend up to half a million dollars on luxury vehicles, lawyers trying to straighten out the mess have said.

Derek Stephens, a Broward County resident who is suing two companies involved in the case, said he lost a 2013 Ferrari 458 Spider that he left on consignment at one of the Zankls’ businesses, Karma of Palm. Beach. Karma told Stephens that the car had been taken by the owner of the dealership as part of a dispute over unpaid loans. Karma had agreed to pay Stephens $230,000 if he sold the vehicle, Stephens’ lawsuit states.

“Some people don’t feel sorry for him, having that kind of car,” Stephens’ attorney Darin Mellinger said. “Even still, it’s a sad situation.”

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The lawsuits and motions filed in the bankruptcy case expose numerous customer claims against various related companies and individuals, including the Zankls, Excell Auto Group, Zankls companies Karma of Palm Beach and Karma of Broward, and their former owner. and financier Moshe Farache and his company Auto Wholesale of Boca LLC:

• In a lawsuit against the Zankls, Karma of Palm Beach and two employees, Palm Beach County resident Geoffrey Keable said he paid Karma $185,500 in February for an Audi R8 Performance Special Addition with a Lamborghini engine , but later learned that he could not obtain a title for the car due to a pre-existing lien of over $100,000 had been filed against the vehicle, “which the defendant had no intention of satisfying” .
• In a motion to intervene in a lawsuit brought by one of the financiers, Lee County resident Arby Lipman said he paid Karma of Broward $448,000 for a black 2020 Ferrari 812 Superfast and then sent the car to Ferrari of Fort Lauderdale for routine maintenance and repairs. “On April 1, the vehicle was stolen by Farache and/or [Auto Wholesale of Boca] without Lipman’s permission or consent,” the filing reads. The car’s VIN number matches one of 22 cars that Farache told the court were in his possession, Lipman said.
• Frank Evans, in a lawsuit against Auto Wholesale of Boca, said he purchased a 2021 Ferrari 812 GTS from Karma of Palm Beach for $431,000 plus a trade-in, his 2017 Ferrari valued at $274,000. However, the title of the 2021 vehicle “ended up in the name of [Auto Wholesale of Boca]“, declares the suit.

As clients hope to get help from the courts, legal battles are raging among business interests who thought they were investing in a high-return business.

In an affidavit filed in Broward County Circuit Court on April 14, Farache admitted taking possession of 22 vehicles prior to Excell’s bankruptcy and dropping them off and storing them in an air-conditioned warehouse on North Dixie Highway. In the affidavit, Farache claimed to have purchased the vehicles upfront and clear from Excell Auto Group and obtained the titles.

But attorneys for New York-based FVP Opportunity Fund Inc. say in a lawsuit against Farache, the Zankls and their associated companies that the cars belong to the fund because the Zankles put the cars up as collateral for a $7 loan, $5 million in February.

An affidavit filed by a private investigator hired by FVP indicates that Scott and Kristen Zankl told the investigator that Farache “broke into the dealership” on April 1 and intimidated Kristen Zankl into signing a document stating that it pledged several vehicles as collateral for unpaid debts. in Farache.

Farache, according to the alleged affidavit, brought a “muscular man” to the dealership and “became increasingly (ly) hostile, and at one point told Scott he would ‘make him disappear’.

In his affidavit, Farache said FVP’s allegations “that I threatened, intimidated, coerced, raped to force [the Zankls] transferring the title and possession of the vehicles… is patently wrong.

The judge handling the case issued a “freezing order” on the cars indefinitely prohibiting Farache from selling or transferring possession of them. Farache’s attorney said in a Friday filing that the order caused irreparable harm to Farache’s operations.

In a lawsuit on April 8, Farache’s company, Auto Wholesale of Boca, accused the Zankls of keeping $4 million earned from car sales and failing to repay the $2.4 million his company had. set up to pay them. Farache, owner of the property where Excell Auto Group is located, also filed an eviction suit against the company, claiming it had breached its obligations under the terms of $7.1 million in loans tied to the contract of lease.

Several other finance companies have since filed their own lawsuits with similar complaints that they presented money for the Zankls and their associates to buy cars, but were never reimbursed after the cars were sold to customers.

A lawsuit filed April 7 by Delray Beach-based Prestige Luxury Cars LLC claims the company gave Excell $1.32 million to buy cars, but Excell has not refunded the front money or returned half of the profits to Prestige as promised. The lawsuit claims the Zankls transferred cars to the Karma of Broward showroom they control in Fort Lauderdale to prevent Prestige from getting them back as collateral.

Meanwhile, as part of bankruptcy proceedings in the U.S. District Court in West Palm Beach, trustee Nicole Testa Mehdipour on April 15 produced a list of 72 vehicles compiled from documents found at the offices of ‘Excell Auto Group and other public records. She asked business owners to submit a list of all current car locations by April 28.

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Whether the Zankls complied with the request could not be determined based on documents filed later in the case. The list included 17 vehicles with VIN numbers matching those on the list that Farache acknowledged on April 14 were in his possession.

On April 28, the court subpoenaed the Florida Department of Motor Vehicles to submit ownership records, liens, registrations, titles, title transfers, and current ownership information for 90 luxury vehicles identified in the examination by the syndic of the commercial relations of Excell Auto Group.

In a statement of assets and liabilities filed April 18, Excell listed $1.9 million in assets and $40.6 million in creditor claims, including a $2.2 million secured claim. by Auto Wholesale of Boca for inventory and $38.4 million of “non-priority unsecured claims” – mostly from companies identified as finance companies. Many other creditors, including customers, have registered claims with the bankruptcy court.

The court set June 22 as the deadline for creditors to submit proofs of claim.

In the FVP case, Farache’s attorney, Jay Farrow, filed a motion for a hearing on Friday that would require FVP to present evidence to support his charges against Farache and prove ownership of the vehicles in Farache’s possession.

Farrow said in an interview on Friday, “You can say whatever you want, but you have to prove it.”

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at rhurtibise@sunsentinel.com.