Hell On Wheels

When Mike Dowdall needed a truck in April 1999, he went to Shawnee Mission Ford. The glitzy Kansas dealership on Shawnee Mission Parkway in Johnson County seemed a reputable place to buy a sturdy pickup to haul plumbing, heating and air-conditioning equipment for his company, Dowdall Engineering.

“I was looking for a good, high-quality used truck that I could use to transport men and materials,” Dowdall says.

The smiling saleswoman who greeted Dowdall pointed out a nice, white 1995 Ford F-250. The odometer showed only 45,825 miles — not bad for a four-year-old vehicle. The price was a little more that $12,000. Dowdall, like any smart car buyer, asked where the vehicle had come from.

“It was a trade-in,” Dowdall says the saleswoman told him, from a “frequent Shawnee Mission Ford customer.” Dowdall signed the papers, confident he’d made a wise purchase. He invested $6,000 to install a utility bed on the chassis.

Soon the truck started to give him trouble, and a repair shop gave him bad news. The truck had been wrecked — something Shawnee Mission Ford’s saleswoman had failed to disclose, violating state law. And whoever had fixed the damage had done a shoddy job.

Dowdall spent more than $3,000 on the first round of repairs. Mechanics worked on the ignition, an oxygen sensor, the water pump and the steering. Then it needed a valve job — a costly engine repair. After that, Dowdall’s mechanic told him he would need to put at least $2,000 more into the truck. The brake rotors had to be replaced, the cylinder heads had to be rebuilt, the exhaust manifolds had to be replaced, the radiator fan was worn out and the truck needed a new clutch.

A year after the purchase, in October 2000, a letter from the National Highway Traffic Safety Administration informed Dowdall that a federal odometer-fraud investigation had found evidence that his truck had more miles on it than the odometer indicated. In fact, Dowdall later learned his truck had racked up twice the mileage shown on the odometer at the time he purchased it. Although Shawnee Mission Ford employees had certified the mileage to be correct, the real figure was at least 92,002 miles, judging from the paperwork of a previous sale of the truck. He also learned that his vehicle had been a rental — another fact Shawnee Mission Ford hadn’t disclosed, thus violating state law.

“I didn’t know anything about it,” the saleswoman, Bea Wells, later said of the truck she sold Dowdall. “We disclose anything we know about the car.” The fifteen-year employee of Shawnee Mission Ford testified in a deposition that she is not trained to examine a vehicle for wreck damage or indications of odometer fraud.

Dowdall was mad.

“I was under the impression I was buying a reliable vehicle and would get many years of relatively trouble-free service from it,” Dowdall says. “Instead, I got a high-mileage piece of junk that’s constantly in the shop, gets poor gas mileage and is worthless in my business.”

After more than a year of hassles with the truck, Dowdall got a call from the Brown Law Firm. The firm told him his truck was one of at least eleven vehicles with rolled-back odometers — and in some cases, wreck damage — that Shawnee Mission Ford had bought from a wholesale outfit that operated out of an ex-con’s driveway in Leawood, Kansas. While it was in business between August 1997 and April 2000, Interstate Exchange sold more than 400 cars to dealers, individuals and wholesale auctions throughout the metro area, according to the company’s sales records. About 75 percent of the cars went to dealers.

A federal investigation had exposed Interstate Exchange’s activities and locked up two criminals involved. When investigators sent letters to victims of the fraud, some tried to return their vehicles, and a few found lawyers.

The Brown Law Firm, one of a handful in the country that specializes in auto fraud, sued Shawnee Mission Ford in Kansas U.S. District Court on behalf of an Ottawa couple and a college student from Wyandotte County who had bought rolled-back Interstate Exchange cars from Shawnee Mission Ford. Terresa and Scott Roberts and Jourdan Penn sued the dealership for violations of federal odometer law, civil conspiracy, fraud and violations of the Kansas Consumer Protection Act. In June, Shawnee Mission Ford paid a judgment of $250,000 in actual and punitive damages in the two cases.

“With all of my experience, it was obvious from the beginning there was some really bad misconduct going on,” says attorney Bernard Brown, who once appeared on a 60 Minutes segment called “Totaled” and has handled car-fraud cases for eighteen years. “I can see the signs of odometer fraud just like a car dealer can spot a rebuilt wreck. It’s painfully obvious. The best thing you could say for [Shawnee Mission Ford] was, they were handling vehicles that they definitely should have known better.”

After the judgment, Dowdall also decided to talk to the Brown Law Firm about suing Shawnee Mission Ford. The firm expects to file a suit on his behalf within a month. Looking for a pattern beyond the Roberts and Penn cases, the firm has investigated Dowdall’s vehicle and discovered that its previous owner was far from a satisfied customer.

Don Wagner bought the truck right before Dowdall, but Wagner discovered the wreck damage within a day of his purchase. He told the Brown Law Firm he’d noticed the vehicle was “pulling” toward the right and making a “squeaking noise,” so he took it to a body shop, where technicians quickly spotted the damage. Wagner returned the truck to the dealership because of the damage. He insisted they buy it back and refused to trade it for another vehicle on the lot.

Still, Shawnee Mission Ford managed to pass the truck off on Dowdall.

The mechanical engineer still has the truck — and all the headaches that came with it. The vehicle has broken down on work sites on numerous occasions and has been in the shop for repairs at least seven times, forcing Dowdall to rent a truck. Dowdall considers the $6,000 he spent installing a utility bed on the truck wasted.

“That case is just egregious,” Brown says. “And it’s one of many.”

Interstate Exchange was the brainchild of
Art Korn, a two-time felon. In depositions, he described dropping out of high school in the early 1970s. Ten years later, he went to prison on a drug charge for dealing PCP. After his release, he worked on and off for years as a service manager at Blue Ridge Mazda in Missouri. In the early ’90s, he started a car wholesaling business, attaching his enterprise to a company called Off Shore Marine on Hickman Mills Road.

“We would help shuffle cars, moving them around from one auction to another,” Korn said later in a deposition.

In 1994, his business went under. Korn was unemployed, living at a house he had sold to a friend after he couldn’t make payments, eating at his widowed mom’s house and mooching money from her to pay expenses.

In 1995, he was sued by a woman to whom he had sold a 1987 Acura Integra that had been badly wrecked, fixed and totally repainted. The buyer, a poor, single mother, filed a complaint with the Missouri attorney general when she learned that her car was a rebuilt wreck.

Later that year, Korn admitted in depositions, he pleaded guilty to a state felony charge of attempted aggravated battery after beating up his girlfriend. A friend also testified in depositions that he believed the girlfriend had taken some cash Korn had stashed in his house and lost it at a Kansas City casino. The friend said Korn “beat the shit” out of the girlfriend. Korn spent almost two years in prison in El Dorado, Kansas. When he got out, in 1996, he and the girlfriend reunited, and once again he hatched a plan to sell junky cars. The problem, though, was that convicted felons can’t get car-dealer licenses in Missouri. Korn needed a buddy to go into business with him and carry the license.

His circle of friends centered on Pete Angotti, the man who had bought Korn’s house and let him live in it. Angotti was a longtime employee of Albright-Roberts Chevrolet in south Kansas City, and Korn had met him at that dealership. In 1993, Angotti had introduced Korn to Stephen Summers during a night out at the Grand Emporium in midtown Kansas City.

“We, you know, met for beers and gone out to some jazz clubs a few times. During football [season], everybody used to go over to Steve’s on Monday night. Sometimes I’d go … I didn’t go every week. Usually cook and barbecue and, you know, just a social guys’ night out kind of deal,” Korn remembered in a deposition.

On Father’s Day in 1997, Summers’ life took a bad turn. While driving with his family in their Chevy Suburban, he was involved in a car crash that killed his son. Summers’ back was broken, and doctors told him he’d “be lucky to walk” again. Depressed and grieving, Summers feared he could no longer support his family because he couldn’t work on the assembly line he’d supervised at General Motors, where he had been since the ’70s.

Summers was lying in bed in July 1997 in this dismal state of mind when Korn and Angotti paid a visit.

“We … talked about the death of my son … I was in a very mourning state of mind,” Summers remembered in a deposition. Korn invited him to start a wholesale car business. Korn said he would take care of the paperwork and setting up the business if Summers would be willing to apply for a Missouri car dealer’s license in his own name.

“I probably did not have all my wits about me…. So I thought maybe this is a good opportunity to get back up while I’m laying on my back grieving my son’s death, thinking what in the hell am I going to do to make a living to survive life if I can’t get up and walk, scoot around, crawl around, roll around in a wheelchair, whatever it might be,” Summers testified.

“Art said he had some credit problems. And I had good credit,” Summers said in a deposition, explaining that he had known about Korn’s felony but hadn’t known Korn was prohibited from getting a dealer license. Summers promptly applied for the license. Korn created Interstate Exchange.

Soon afterward, Summers’ doctor told him he would recover and walk again. After a few months, he returned to his old job at GM. Summers continued to allow Korn to use his dealer’s license to run Interstate Exchange but was not involved in its daily operations, he said in a deposition.

In the meantime, Korn hooked up with another associate, a man named Jim Nance, who also became involved in Interstate Exchange. Nance had a body shop and sometimes painted cars for Korn. Their wholesale business started slowly, selling five cars in August 1997 according to company records.

Korn had developed an illegal strategy to maximize profits. He and his associates, including Nance and possibly Angotti, would buy cars from an Enterprise Rent-a-Car “bid lot.” These were late-model rental vehicles with high mileage and unrepaired accident damage that ranged from minor to severe. “Mostly they were wrecks,” Korn said in a deposition.

Korn took these cars to his home in Leawood, where he would get out his tools and don surgical gloves, open up the dashboards and roll back the odometers 10,000 miles to 40,000 miles or more. Then he would doctor the titles to conceal the previous mileage notations. When Korn encountered cars with electronic odometers that were too sophisticated for him to roll back, he would have Angotti take the cars to Albright-Roberts Chevrolet, where someone would reprogram them for him, according to a sworn affidavit from Angotti’s wife, Adrienne Angotti. Korn had a buddy patch up the wreck damage out of a small garage. Then Korn would repaint the cars and peddle them to dealerships throughout the metro area.

“There was no knowledge of any of that going on at the store. If there had been, believe me, he would have been gone a long time ago,” says Fred Albright, one of the dealership’s owners. Angotti was fired within the last year.

Korn was soon known in the used-car industry as an unsavory character. “From my knowledge, and just a couple of other people I’ve talked to through the years, when Art’s name is mentioned, it’s not in a favorable light,” Richard Diklich, an auto consultant from Liberty, said in a deposition.

When Korn had cars to sell, he would visit various used-car lots and talk to managers. When he visited Shawnee Mission Ford for the first time in June 1998, he talked to Brad Schull, the son of founder and president Richard Schull. The younger Schull had started off in the family business at age sixteen as a “car porter,” then studied business management at Texas Christian University before returning to the family dealership. Brad Schull, who is now vice president and general sales manager, was working as the used-car manager when Korn arrived at Shawnee Mission Ford with cars to sell.

Schull looked over Korn’s cars. He later said in a deposition that his training and experience in buying cars at auction did not help him spot anything odd about Korn’s cars. Schull agreed to buy several cars at unusually low prices.

In a deposition, Schull said Shawnee Mission Ford bought cars from about 25 sources — including wholesalers and other franchise dealerships — while he was used-car manager. He said Korn was the only seller whose reputation he did not know. Schull said he would not buy from a dealer if he did not know the dealer had a good reputation. But then he said, “I did not pay attention to reputation.” Then he contradicted himself again, saying, “Reputation does matter to me.” But he claimed that he took no steps to verify Korn’s reputation.

Brown, the consumer attorney, says he just doesn’t buy that explanation. “These guys [car dealers] live on who they deal with. If they were buying from a dirtbag, either they knew he had a bad reputation and they went ahead and bought anyway, or they didn’t have any idea who they were buying from because they really didn’t want to know. There isn’t any good explanation for buying a bunch of rolled-back cars from somebody. Not when you know the game.”

Schull refused to be interviewed for this story — but in a voice-mail message to the Pitch, he tried a gambit that many car dealers use successfully against newspapers to kill bad publicity.

“I guess maybe you’re gonna print a story on that case,” Schull said in his message. “And I’m one of your advertisers … [the Pitch‘s ad rep] is supposed to come out here tomorrow to renew a contract or try to renew a contract, and just give [him] the message that he won’t need to come out here because I’m not going to spend [money] with an advertising firm that will print a story like that.”

All of the cars that Shawnee Mission Ford bought from Art Korn came from Enterprise Rent-a-Car. Schull said in his deposition that he also bought hundreds of cars directly from Enterprise Rent-a-Car. He could not explain why he would buy cars from a wholesaler who had bought from Enterprise when he could have paid less for the same cars by avoiding a middleman. Although all the Interstate Exchange cars had been rentals, Shawnee Mission Ford flouted state law by failing to disclose that fact to any of the buyers. In reference to one of the Interstate Exchange cars, Schull said he had never asked Korn whether it had been a rental or lease vehicle.

“I guess at the time I was not concerned if it was a leased or rented vehicle,” Schull said in a deposition.

Despite state-law disclosure requirements, Schull said in his deposition that Shawnee Mission Ford uses a stock number that reflects only the type of source from which the vehicle was purchased. As recently as six months ago, the dealership still wasn’t marking the rental/lease disclosure box on the transfer-of-title paperwork for rental vehicles it purchased from a wholesaler and resold, according to Schull.

Schull also said Shawnee Mission Ford does not check vehicles for signs of wreck damage or odometer rollback before the company purchases or sells a vehicle. He said Shawnee Mission Ford takes no steps to avoid buying and selling vehicles with rolled-back odometers. Schull said that when he bought a car from Korn, he had no discussion with Korn about the car or where it came from and that he looked it over for “five or ten minutes” before buying it.

Schull remembered very little about Korn, except that Korn was a “smaller” bearded man with glasses, and he couldn’t recall any of his conversations with Korn, except for one brief exchange about the stock market. “I guess he was kind of funny when he came in,” Schull recalled, smiling, during a deposition. “He had a sense of humor.”

Shawnee Mission Ford was not the only major metro-area dealer buying from Korn.

According to Interstate Exchange’s monthly dealer sales reports to Missouri’s Motor Vehicle Commission, the wholesale business, between August 1997 and April 2000, sold vehicles to Jay Wolfe, in Kansas City, Kansas; Jack Miller Subaru, Ancona Honda, and Quality Chevrolet, all in Olathe, Kansas; Steve Oliver Dodge, Don Stein Buick, Bob Allen Ford, and Morse Chevrolet, all in Overland Park, Kansas; Integrity Auto Group, in Mission, Kansas; Marcus Allen Sales Center, in Gladstone, Missouri; Stadium Honda, in Raytown, Missouri; and Blue Springs Ford, in Blue Springs, Missouri.

Other buyers included the usual suspects: used-car dealers catering to poorer customers, including Not Nu Auto Sales, Approved Auto, Car Credit, and Cruzin’ Motors, all on Kansas City, Missouri’s east side; and Kwik Auto in Raytown.

If Shawnee Mission Ford wasn’t paying any attention to what Korn was up to, the federal government was. The National Highway Traffic Safety Administration had been tipped off to Korn’s activities, and it was investigating Interstate Exchange. The agency enforces a 1972 federal law that created stiffer penalties for odometer tampering, requiring dealers and car manufacturers to maintain a paper trail documenting odometer readings. Still, the NHTSA estimates that odometer fraud costs American consumers between $2 billion and $4 billion a year. One of the NHTSA’s six regional investigators, Bob Eppes, was gathering evidence of Korn’s scheme.

The NHTSA brought in the FBI and finally collected enough proof to bust Korn, who pleaded guilty to tampering with odometers on more than forty cars and to illegally altering documents. In October 2001, Korn began serving a three-year sentence at a federal prison in Illinois, according to court documents. As part of his punishment, Korn was ordered to pay $43,000 in restitution to his victims and was barred from ever “operating a used-car business or being in the used-car business,” according to documents. He was also ordered not to contact the girlfriend he had beaten then dated again.

His sidekick, Jim Nance, also pleaded guilty, and he served four months in jail for his part in the scheme.

The NHTSA investigator, Eppes, sent a letter to Shawnee Mission Ford notifying the company of the odometer fraud and requesting records of all dealings with Interstate Exchange. When managers learned of the possible odometer fraud, they did not contact customers who had bought Interstate Exchange cars from them.

But the feds did. NHTSA wrote to customers who had bought rolled-back Interstate Exchange vehicles from Shawnee Mission Ford, informing them that the mileage on their vehicles’ odometers had been found to be incorrect. Two who received such letters went to Shawnee Mission Ford to complain and to sell back their vehicles.

One, Sharon Hilger, who had endured endless problems with the 1994 black Oldsmobile Bravada she bought from Shawnee Mission Ford, brought back the car as soon as she learned of the fraud. She demanded that the company take it back. The vehicle had been previously returned to Shawnee Mission Ford by another buyer, Kelly Poage, who insisted the dealer take back the car because it kept stalling inexplicably at stop signs and was in the shop for six weeks of the first two months she owned it. Poage was able to get rid of the car only by going to the Shawnee Mission Ford showroom and making a scene.

Shawnee Mission Ford then sold the Bravada to Hilger, who had the same incessant, expensive problems. When she got her letter from the NHTSA, Hilger finally saw her opportunity to get rid of the disastrous purchase. “When she called Shawnee Mission Ford, they grudgingly agreed to take it back on trade,” Brown says.

Shawnee Mission Ford then passed off another lemon on Hilger — a Ford Explorer that had been traded in with a written statement from the owner documenting “severe transmission problems.” Shawnee Mission Ford did not disclose those transmission malfunctions to Hilger. “She’s not told anything about this, and sure enough, she has major transmission problems,” Brown says.

One day, while Hilger was driving on a busy two-lane road with her small children, the car suddenly died, and Hilger barely avoided a wreck.

Title-transfer documents show that Shawnee Mission Ford then took the Bravada that the feds said had a rolled-back odometer and sold it to P&S Auto Auction of Elwood, Kansas, with no odometer-discrepancy disclosure. “Knowing the situation, it [the odometer-discrepancy box on sales forms] should have been marked,” Shawnee Mission Ford’s finance manager admitted in a deposition. “Because there’s an odometer discrepancy, and the mileage was unknown.”

The other vehicle that was returned to Shawnee Mission Ford as a result of the investigation was a gray 1996 Ford Taurus that had been purchased by an Iowa couple. When they received their letter from the NHTSA, they traded the Taurus back to the dealer. Shawnee Mission Ford then sold the car to Jamal and Johnette Stewart, of Grandview, Missouri.

“The mileage was real low … and that’s what really caught my eye … that’s what made us like that car. I didn’t actually like it, but that’s what made us accept that car,” Johnette Stewart said in a deposition.

When the Stewarts were signing paperwork at 8:30 p.m., Johnette Stewart remembered that they dealt with “a nice-looking white guy” named “Brad.” They could not remember which Shawnee Mission Ford employee told them the dealership could not be sure the mileage was accurate.

“When we signed it, I remember them saying the true miles were not known because of, like, they bought the car from an Enterprise car rental place … so they didn’t know if that was the actual mileage or what on it, but there was no reason for me to think there was anything wrong with the miles,” Johnette Stewart said in a deposition. (There is no evidence that Enterprise sold cars with incorrect odometer readings.)

The Stewarts said no one at Shawnee Mission Ford ever disclosed that the car had been returned because federal investigators had discovered that it had a rolled-back odometer. If the dealer had admitted this, “I wouldn’t have bought it,” Johnette Stewart said.

After taking back the two rolled-back vehicles on trade, Shawnee Mission Ford filed a claim with the NHTSA, professing to be a victim of Korn’s and Nance’s scheme and claiming that they had suffered more than $12,000 in losses on the vehicles that were returned as a result of the investigation. But in a deposition, Shawnee Mission Ford finance manager Herb Marsh admitted that Shawnee Mission Ford not only suffered no losses on the cars but ultimately made more than $2,000 in profit between the two vehicles.

Two other victims of the rollback scheme did not return their vehicles but instead retained the Brown Law Firm to represent them and sued Shawnee Mission Ford, Korn, Nance and Summers in federal court for fraud.

Terresa and Scott Roberts bought a 1996 Oldsmobile Sierra from Shawnee Mission Ford in 1998 for $11,000. They saw an ad in the paper and visited the dealership, where they met with Bea Wells. The couple asked Wells about the vehicle’s history. Wells said the car was a “one-owner trade-in,” Terresa Roberts testified in a deposition. The odometer read 44,000 miles. “We didn’t want anything with high mileage on it,” Terresa Roberts said.

The following year, Scott Roberts was driving home to Ottawa, Kansas, from his job at a factory near Lawrence when the engine overheated. A warning light flashed on, and smoke rolled from under the hood of the car. A mechanic told the Roberts that the Sierra’s engine would need to be replaced.

“Basically, it was totaled. The head gasket warped, so it was a goner,” Scott Roberts says.

After the loss of the Sierra, the Roberts and their five children had to rely on a Plymouth Voyager with 150,000 miles on it, a gift the family received from a friend at their church. The year after their Sierra blew, they received a letter from the NHTSA informing them that the mileage on that car had been about 50,000 more than the odometer said.

“My wife couldn’t believe it. She went and checked the [vehicle identification] number [on the car’s paperwork],” Scott Roberts tells the Pitch. He says he and his wife believe Shawnee Mission Ford cheated them.

“Our whole beef is that we’re looking for honesty and accountability with Shawnee Mission Ford. I want something done to them. I’d like to see them go out of business, myself,” Roberts says. The dealership agreed to pay the Roberts $150,000 in damages in May.

Jourdan Penn, a college student from Kansas City, Kansas, received a $100,000 judgment against Shawnee Mission Ford in the same case. He bought a Chevy Blazer from another dealership — a trade-in from a customer who had purchased it at Shawnee Mission Ford — and later learned it was one of the Interstate Exchange rollbacks. That explained the constant problems he’d had with it. He needed an SUV to carry equipment for his mobile disc-jockey business, but while he was on his way back to college in Atlanta, Georgia, the vehicle broke down “in the hills of Tennessee,” he tells the Pitch.

Penn put hundreds of dollars into repairing the vehicle before discovering it had been wrecked. A letter from the NHTSA — and learning that the dealership had not told him the Blazer had been a rental car — added to his anger. “I feel like my vehicle is pretty much worthless,” he says. “The fact is, I’ve got a responsibility to notify the next individual I would sell it to that: A, it was a lease vehicle, B, it was wrecked, and C, the odometer has been rolled back 30,000-plus miles.”

Penn was happy with the judgement but says he’s frustrated that a major dealer can get away with such behavior without state officials stepping in to punish the franchise.

The Roberts feel the same way. The couple filed a complaint with the dealer-licensing section of the Kansas Division of Motor Vehicles in July.

Brown has written three letters to the Kansas Division of Motor Vehicles in Topeka, advising the agency that he has documentation of Shawnee Mission Ford’s violations of Kansas law and offering to provide proof of misconduct for the agency’s review. Several times, state officials have told him they would send investigators but have not followed through.

“I’ve offered to do anything to help them,” Brown says. “I offered to pack up all the documentation I have and send it to them in boxes. But that would be confusing for them, so I’ve offered to make myself available to investigators evenings or weekends if that’s better for them. I’ll spend as many hours as it takes to explain it to them. I’ll camp out in their office if they want me to.”

So far, state officials have seemed far less enthusiastic than Brown about nailing Shawnee Mission Ford for violations of dealer-licensing law and the Kansas Consumer Protection Act. State law requires written disclosure of a lease or rental history and requires written disclosure of odometer discrepancy. The director of the Kansas Division of Motor Vehicles, Sheila Walker, admits that she has heard of the Shawnee Mission Ford lawsuits and judgments, but she says she is still waiting for more documentation before proceeding.

“We expect to follow through with the dealer,” Walker says. She adds that she would “possibly send out a dealer investigator” to Shawnee Mission Ford. “But we’re trying to get some more documents from Mr. Brown … to help us know exactly what we’re looking for.”

For Brown, the case against Shawnee Mission Ford is like déjà vu. It reminds him of a case he won against the big dealership ten years ago — for the exact same thing. In that case, a couple bought a car from Shawnee Mission Ford that the dealer had purchased from another shady wholesaler. That vehicle’s odometer read 35,000, but its actual miles were closer to 90,000. Shawnee Mission Ford put the vehicle in its repair shop, where the company performed a “ring job,” an engine repair done almost exclusively on high-mileage vehicles. Then they sold the car to an unsuspecting couple.

An appeals court decision in that case — which is still used today in car-fraud cases — asserted that a dealer who ignores signs of an odometer rollback when selling a car is committing fraud.

“Basically, a dealer can’t close their eyes to the obvious fact of a rollback and call that compliance with federal odometer law,” Brown says.