San Diego fraud ring charged with stealing millions from major auto lenders

The CEO of a credit repair agency has been named as the ringleader of a more than $5 million scheme that defrauded several major auto lenders out of more than 100 vehicles, according to the San Diego County District Attorney's Office.

The fraud ring is accused of, among other things, credit washing, a type of fraud where customers falsely report identity theft to remove legitimate trade lines from their credit report.

Three quarters of the more than 100 vehicles identified became the primary focus of the investigation, according to a statement released by the district attorney's office Friday. Those vehicles, which included high-end luxury vehicles, motor homes, recreational vehicles and water crafts, were worth about $3.75 million.

Honda Financial Services, Capital One Auto Finance, Wells Fargo Auto Finance, Toyota Financial Services, Ford Motor Credit, Chrysler Capital and Lexus Financial Services were among the affected lenders, according to several criminal complaints filed in the Superior Court of California County.

Bryan Orr, CEO of San Diego credit repair agency Patriot Financial, is accused of leading 20 co-conspirators in fraudulently purchasing vehicles, following an 18-month investigation by the San Diego County Regional Auto Theft Task Force, referred to as Operation Blindside.

Beginning in December 2017, Orr started several scams that involved felonious activities including but not limited to money laundering, auto theft, grand theft and theft by false pretense, the district attorney's office said in the statement.

A spokeswoman from the office said she could not comment because the case remains open and ongoing.

In one such scam, one of the conspirators would purchase and finance a new vehicle. Co-conspirators paid the loan in full, and once the title was sent to the purchaser, the vehicle was resold. Then, the purchaser would falsely report that his or her bank accounts were fraudulently used to purchase the vehicle and would be refunded, the district attorney said.

"Immediately the funds were withdrawn and passed on to Orr," the statement said. "For their effort, the co-conspirators received a percentage."

When lenders reviewed requests for refunds of disputed purchases, the fraud ring created 54 shell companies and designed websites for them, according to the statement, which were, "researched by the financial institutions seeking to verify its customers' employment or the existence of the business."

"This criminal enterprise involved a network of individuals and dozens of shell companies that allowed the ringleader to pull the strings and carry out this scam for over 3 years," District Attorney Summer Stephan said in the statement. "Banks, vehicle finance companies —and ultimately the consumer—are all victims of this aggressive organized criminal operation."

The district attorney accused the fraud ring of opening more than 45 bank accounts at various financial institutions to facilitate the schemes and launder money. One conspirator is also accused of creating false financial documents that enabled individuals with little to no income to purchase vehicles.

If convicted, Orr faces up to 100 years in prison.

Though credit washing -- or credit repair fraud -- is not a new problem for the auto industry, it has recently become a major concern for auto lenders. According to PointPredictive, a San Diego company specializing in fraud detection, a handful of major auto lenders reported four times more credit washing cases coming into their fraud departments since last fall.