LEGAL FILE

Ex-dealer's tally adds loan-fraud damages

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A former New York dealer who defrauded dozens of customers should pay $5,000 in punitive damages to a customer whose signature he forged on a loan application, a federal court has ruled in a civil suit.

U.S. Magistrate Judge Frank Maas said Robert Federico, the sole owner of the now closed Courtesy Lincoln-Mercury Inc. in the Bronx, admitted he fraudulently placed plaintiff Anthony Burnett's name on a loan for a car Burnett didn't buy.

Federico already had been convicted in criminal court of grand larceny and fraud for stealing more than $500,000 from more than 48 customers in 2005 and 2006. His misconduct included accepting payments for extended manufacturer warranties without purchasing the warranties and failing to pay liens on trade-ins, thus leaving customers liable for multiple loans, Maas said.

After Burnett bought a Ford Windstar from Courtesy, Federico used Burnett's name and financial information to get another customer Ford Credit financing on a Lincoln LS, according to the decision. Federico registered the Lincoln in Burnett's name.

Burnett learned of the scheme after receiving a parking ticket for the Lincoln in the mail.

Federico was sentenced to four months in jail and five years' probation. He also was sentenced to pay restitution, but Burnett's lawyer, Randall Newman of New York City, said: "My client never got any money" through the criminal case.

Burnett's civil suit, which alleged Fair Credit Reporting Act violations and fraud, also claimed the incident damaged Burnett's creditworthiness. Along with Federico, the suit had named Ford Credit, Courtesy, TransUnion, Equifax Information Services and Experian Information Solutions as codefendants. All but Federico were dropped from the case.

Newman said the primary goal in suing was to get the delinquent loan off Burnett's credit record: "We got it off his credit. That's what he wanted."

In addition to punitive damages, the judge assessed a nominal $1 in compensatory damages and $350 in court costs.

However, it's unlikely that Federico will pay the award, Newman acknowledged. "I doubt he has any assets."

Federico failed to respond to the civil suit.

You can reach Eric Freedman at freedma5@msu.edu.

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