VW accuses Lamborghini O.C. of $12 million theft

VW accuses Lamborghini O.C. of $12 million theft
January 13th, 2009, 6:00 am · 41 Comments · posted by John Gittelsohn
Lamborghini Murcielago

Lamborghini Murcielago

Lamborghini Orange County, formerly the world’s largest dealer of the Italian luxury vehicles that sell from upwards of $200,000 apiece, closed in November without explanation. Now court documents indicate what happened.

The owners of Lamborghini Orange County in Santa Ana committed “outright theft” of approximately $12 million by selling its fleet of exotic sports cars at deep discounts and failing to pay their creditor, according to a lawsuit filed by Volkswagen Credit Inc. in Orange County Superior Court.

The lawsuit says the owners of the Orange County dealership and its affiliate in Calabasas unloaded 54 cars in eight days – accounting for 8 percent of all the Lamborghinis sold in the United States during all of 2008.

The lawsuit says VW Credit, which covered the cost of Lamborghini O.C.’s cars in advance of sale, doesn’t know where the proceeds went. But it didn’t get the money.

The owners of the dealerships named in the suit are Vik Keuylian and his sisters Asdghig, Nora and Sossi Keuylian. Their attorney, Jeffrey Gubernick, declined to comment on the allegations, because the case is still under litigation.

Gubernick has filed a motion to strike VW Credit’s demand for punitive damages, but still not responded to the general allegations in the lawsuit. A hearing is scheduled for Jan. 22.

The Keuylians attracted a celebrity list of customers, including NBA stars Kobe Bryant and Dennis Rodman. They staged fundraisers hosted by Elton John and Sharon Stone to support research to fight AIDS.

VW Credit provided financing for Lamborghini Orange County and its sister dealer in Calabasas to finance the cars. Volkswagen owns Lamborghini.

In a separate suit filed in Orange County Superior Court, East-West Bank is suing the Keuylians and Lamborghini Orange County for defaulting on a $3 million loan, for which they failed make payments in November and December.

Another lawsuit filed in Las Vegas seeks $340,000 from Vik Keuylian for failing to pay him for a 2008 Lamborghini Murcielago formerly owned by Stephen Cloobeck, owner of Diamond Resorts.

“They took the car but never gave me the check,” Cloobeck said.
Related stories …

* Lamborghini O.C. closed — largest dealer of exotic car
* Fisker Automotive named a top startup for 2008
* First production Ford Thunderbird set for auction
* Bentley Continental GTC Speed — one powerful convertible
* First Aston Martin service center opens in O.C.
* OC auto magazine, Velocity, ceases publishing

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Posted in: Autos • Legal problems • O.C. business news • Lamborghini • Volkswagen |

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41 Responses to “VW accuses Lamborghini O.C. of $12 million theft”

1. case closed Says:
January 13th, 2009 at 6:22 am

Fool me once shame on you. Fool me twice shame on me . Fool me 54 times in 8 days now thats a lawsuit.
2. Bill Says:
January 13th, 2009 at 7:36 am

How much do you have to discount a $200,000 vehicle to sell seven a day? It seems that the buyers had to know that something bad was going on.
3. Angel Says:
January 13th, 2009 at 7:54 am

To case closed: Touche!

Your comment made me :)
4. LEXUSRY Says:
January 13th, 2009 at 8:00 am

MY HUNCH WAS RIGHT ALL THE TIME. IF TWO DEALERS CLOSED ON THE SAME DAY, IT GOT TO BE MONEY LAUNDERING OR FRAUD. I JUST WON A DINNER BET AT CHARTHOUSE FROM MY FRIEND.
5. Nate Says:
January 13th, 2009 at 10:42 am

How do you sell 54 in eight days? Probably by having an extensive buyer list/database who become very, very interested when you start blowing out your inventory. I’m guessing many are probably collectors.
6. X-DEM Says:
January 13th, 2009 at 10:48 am

This should be an interest to the IRS. VW probably never got paid off and the money was pocketed by the Keulyians. Same thing happened at that defunct Dodge dealership in Foothill Ranch. Owner went bankrupt, kept the money from Chrysler, and never paid off the buyer’s trades. Buyer beware. I would check out the owner of any dealership before purchasing a car, especially with a trade that still has a balance due.
7. bpsqwerty Says:
January 13th, 2009 at 10:58 am

sounds a lot like the housing crisis - “outright theft”, let’s give people a bailout so they can have free houses they never properly qualified for AND keep prices artificially high!.

but hey some fake OC billionaires got some great deals on a Lambo!! no wonder they moved so many cars…
8. Mojo Says:
January 13th, 2009 at 11:24 am

If it’s too good to be true…

Seriously, it’s easy to make this kind of a sale if the buyer thinks that the discounted price is due to the economy. Buyer Beware!!!
9. Alexa Says:
January 13th, 2009 at 12:00 pm

Odd that they think about getting away with theft in such a large scale.
10. PG Says:
January 13th, 2009 at 12:01 pm

They thought that VW credit wouldn’t notice? LOL.
11. Chat Says:
January 13th, 2009 at 12:02 pm

How can this family think they could get away with selling cars that apparently they don’t own. VW and the banks own the assets? Strange.
12. Remmy700p Says:
January 13th, 2009 at 12:03 pm

Wonder if anyone traded in their Jetta for a Lambo…
13. Lambo Fargo Says:
January 13th, 2009 at 12:12 pm

Just like the plot of Fargo, except with a NB twist.
Look out for any wood chippers.
I wonder what will happen to all the cars? Get reposessed by VW?
I’m betting the Keuylin’s are far, far away by now, having gotten the cash from the sales. Off to the Cayman islands!
Keuylin, isn’t that a Dutch name?
Maybe they’re hiding on Aruba.
They’re good at covering stuff up there!
14. noway Says:
January 13th, 2009 at 12:34 pm

54 in 8 days? now i know why there are so many tool bags driving around in these beefed up volkswagens.
15. Elvogo Says:
January 13th, 2009 at 12:46 pm

VW Credit didn’t know because of the very nature of floorplanning.

Floorplanning doesn’t have liens perfected on the titles. That honor goes to the first owner of a new car. Or new owner of a pre-owned.

Lenders who do floorplanning in essence have to go to a dealership once a month, and basically count cars. They have a blanket lien, probably filed via UCC. But no lien on a title.

The dealer says they sold 10 cars, started the month with 60, and brought 5 more in, they should have 55 cars on the lot, and they should pay the lender for the 10 they sold.

If the cars are out of balance, then the dealer is doing funny stuff. It’s a bit more complicated than that, but you get the idea.

The dealership probably sold the cars right before their next VW Credit visit.

There was a GM dealer in the late 80’s early 90’s, located in the northeast, who was accused of defrauding GMAC of between $500 million and $2 billion on a floorplanning scheme. He basically set up a phony van conversion company, who invoiced his dealership for vans they bought from GM and converted. The dealership then took the invoices to GMAc for floorplanning. It was a giant Ponzi scheme. There were no conversion vans. The last year the guy was in business, it was believed his dealership claimed they bought 80,000 phony vans (pieces of paper) from the phony conversion van company.

This fraud was pulled off because the owner and his family had been in business like 50 years, and basically bullied the GMAC rep from doing his job, and that was counting cars.
16. bpsqwerty Says:
January 13th, 2009 at 1:06 pm

now hold on just a minute there, Mr. Lundergaard!
17. John Gittelsohn Says:
January 13th, 2009 at 1:19 pm

Thanks for all the comments. Just a reminder: Please be civil and avoid ethnic slurs in your comments.
18. ed Says:
January 13th, 2009 at 1:47 pm

No wonder I’ve seen so many Lambo’s on the roads lately….
19. Dan Says:
January 13th, 2009 at 1:58 pm

Wait wait wait does that mean they will Repo my car!!!
20. Ricardo Says:
January 13th, 2009 at 2:24 pm

Wow, this is crazy! Did Lamborghini think they could pull a fast one on VW? Doubt it! It seems like 2008/9 might not be the best time to buy a luxury car. Thanks for sharing this interesting info.
21. leadingrich.com Says:
January 13th, 2009 at 2:53 pm

Ok…the numbers do not match up - 54 cars x 200k is only $10 million. So I don’t think they stole $12 million. Also in this economic time who can afford a Lamborgini- maybe it was people who invested with Madoff… Also why is VW lending on Lamborgini’s given the economic climate. Also how did they have so much inventory on hand? There has got to be more to the story….

I have to say that if you are going to do it, at least do it with 54 cars rather than 500 VW’s.

Where are the Checks and Balances of the world? How can I get a discounted VW?

http://LeadingRich.com
22. love lambo Says:
January 13th, 2009 at 3:43 pm

Read it again, the cars START at $200k. A new Murcielago will set you back almost $450k. A new Gallardo (the “cheap” model) is $250k new.
23. thefloyd Says:
January 13th, 2009 at 4:36 pm

I was wondering why we saw so many Lam’s getting their gears ground for a while there.
24. Earl Says:
January 13th, 2009 at 4:44 pm

My concern is that this new development will block any new owner from reopening Orange County Lamborghini anytime soon. This case is goes to get dragged out through the court system over the next 18 months to 2 years. This will take more of the much needed revenues from the economy of Orange County.
The real tragedy in this whole mass is the fate of workers and families that previously were employed there. These poor slobs showed up every day to a facility that from the outside looked like it was an unsinkable ship. The world’s largest selling Lamborghini dealer! Hah Next thing you know the doors a chained and the mechanics can’t even get there tools out. It wasn’t until several days later and with police and bank escort that they were allowed in to get personal effects. Remember this happened to them in the beginning of November. “Hey honey I lost my job today because some greedy clown decided he wanted even more money then he already had”. “ Can we postpone Christmas this year”? I wish them well!
25. GARBIS Says:
January 13th, 2009 at 5:38 pm

I HEARD SOME CLOWN BOUGHT 5 OF THEM FOR HIS KIDS DURING THAT TIME FRAME
26. manny Says:
January 13th, 2009 at 5:51 pm

wooooooooooooow…
27. peter Says:
January 13th, 2009 at 5:56 pm

THESE PEOPLE ARE BAD HUMAN BEINGS. THEY TREAT THEIR EMPLOYEES THE SAME WAY: LIES AND CHEATING. THEIR AFFILIATES ACCROSS THE FREEWAY ARE THE SAME. WHATS A SHAME!!! I HOPE THE GET WHAT THEY DESERVE!! KARMA BRO!!!!!!!!
U KNOW WHO YOU ARE
28. uptown Says:
January 13th, 2009 at 6:02 pm

Great for the purchaser… probably hold clear title because the dealer would have the MSO

Anyway, the $12M probably paid for the wifes boobs
29. james westfall Says:
January 14th, 2009 at 1:59 am

please tell me they got some deals on countachs now!
30. Dino Says:
January 14th, 2009 at 5:15 am

HA HA!

Just wish I’d been there to get a cheap Lambo

LOL!!!!
31. InvestigateOC Says:
January 14th, 2009 at 5:18 am

Sossi was appointed to the DMV Board Development Committee by Arnold. Hmmm……

http://www.nmvb.ca.gov/members/board_members.htm#
32. davis Says:
January 14th, 2009 at 6:22 am

leave these people alone guys….they are good people that probably made bad business decisions….it happens to the best of us……I’ve bought two cars from them back when times were good and they were nothing more than the best to deal with.
33. Mr. Wonderful Says:
January 14th, 2009 at 7:37 am

Want to get cheated, lied to and robbed?

Do business with a Muslim or a Chinese.

Just “informally” profiling these two groups has eliminated 75% of the collection problems at the company where I manage AR.

That is a fact. VW needs to put some cultural consideration into their lending standards.
34. Carguyski Says:
January 14th, 2009 at 9:10 am

I’d bet many of those cars went into shipping containers headed for destinations far far away from American courts and the DMV…

And yes, this is flagrant fraud, not bad business decisions.
35. bpsqwerty Says:
January 14th, 2009 at 9:33 am

very nice, Mr…
36. Matthew Says:
January 14th, 2009 at 10:44 am

For those Lamborghini customers that are now in need of alternative Sales or Service assistance in the OC area, please be advised that the Symbolic Motor Car Company, with factory authorized Lamborghini franchises in San Diego, Las Vegas and Los Gatos in Northern California, are here to help:
http://www.siliconvalleyautogroup.com
http://www.lamborghinilasvegas.com
http://www.symbolicmotors.com
37. To Mr.Wonderful Says:
January 14th, 2009 at 12:39 pm

if you come to my dealership prepared to drop a minimum of $250k I’ll be pretty damn nice to you too. Get a grip.
38. bpsqwerty Says:
January 14th, 2009 at 2:03 pm

dear “Symbolic” you’d have a heck of a lot of customers if you just open one in OC. duh?

seems like people would be a lot more willing to get their exotic serviced in OC or LA than the Bay Area!!
39. greasemonkey Says:
January 14th, 2009 at 2:54 pm

they should apply for government aid, a.k.a. a bailout package. Who knows, other crooks have received them.
40. Innovaitve Says:
January 14th, 2009 at 3:31 pm

It was a pleasure detailing their Lamborghini’s for them when they were selling like hot cakes, bummer…..

http://www.innovativedetailing.com
41. jay Says:
January 14th, 2009 at 3:53 pm

Vic was out trying to sell the cars but some guy Leo Gugasian who used to own Ferrari OC bought a bunch for cheap knowing Vic owed people money then tried to flip them. They are both going to have trouble 390k cars for 200k each. I love to stupidity…