Classic Car and Billing Fraud

There are several good lessons from this story.. if you are an owner of a classic car that you’re restoring, a mechanic, or a restoration company; this is an excellent article about an event that happened that ended up costing somebody millions of dollars due to billing fraud.It was because of an improper restoration scheme and a mechanic that was not doing the right thing.

In this case there was a wealthy individual,  who used to own Angie’s List.  Angie’s List is a kind of a contractor type social media platform. The former CEO had a bunch of classic cars and he wanted to have them restored and properly brought back to their regular self.  He worked with a boutique mechanic, somebody who did this type of work on these older cars and had them work on vehicles. This mechanic also helped him find some more vehicles. Over the course of a couple years he overcharged for service work on multiple rare vehicles and he also faked some vehicles.  This is something to watch out for if you are a classic car collector.

 It’s important to make sure that you’re checking the provenance of a vehicle. lThis is somebody who’s the CEO of a major company, he had millions of dollars and he thought he was doing proper due diligence on vehicles. He said it was a coveted factory model but needed some assembly. Come to find out it was not an original and he paid $50,000 for it. Turns out that it was worth nothing. He discovered that the alleged mechanic had promised Hillinger; told Bill, the collector, that it would cost ten thousand to assemble. Sent Bill an invoice for $130,000. The worst one was where he purchased a vehicle for $16,000, told the work would be done in one or two years and cost $200,000.  Four years later the job wasn’t completed but he had bills for a million dollars. These are big numbers, big losses.

Advice from us:

In your case, you might use smaller numbers for your particular scenario. If you are a collector, or you’re hiring somebody, make sure that they know what they’re doing. That they have a good track record and history.  If you’re a mechanic make sure you’re managing your restorations properly. The mechanic in this case eventually has to pay back $7.2 million dollars. That’s what’s called trouble damages because in the state of Iowa, if you cause damages through fraud you have to pay back three times what you took. The work was only $2.4 million over the period of time this happened, yet had to pay back $7.2 million. He’s filing bankruptcy, he’ll end up going to jail, and there’ll be other financial downsides. Make sure that if you’re a mechanic you’re managing your affairs properly. If you’re a restoration client, get constant updates. 

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