A Southampton man arrested by the U.S. Department of Transportation last week was indicted in connection with an automobile transportation scam.
According to the U.S. District Attorney’s Office, Gregory Sclafani, 62, who was operating an automobile transport service out of his home on Knoll Road, obtained personal bank account information from his clients and used it to pad his own pockets, stealing more than a half million dollars in total.
“Under the guise of acting as a cost-effective broker of automobile transportation services, the defendant allegedly broke the trust of his victims and stole hundreds of thousands of dollars from them,” U.S. District Attorney Loretta E. Lynch said in a statement last week. “We and our law enforcement partners will continue to hold accountable those who would seek to defraud hardworking Americans.”
According to the federal complaint, beginning in January 2008, Mr. Sclafani solicited customers online to use his brokerage firm to find a long-term car hauling service. Once contracted, he would require customers to pay for services by providing their personal bank account information, which he would then use to draft fraudulent checks and transfer money into his own account.
Mr. Sclafani is accused of stealing roughly $600,000 from more than 100 victims. The cars were never delivered.
According to the complaint, Mr. Sclafani has a long history of automobile fraud, and in November 2009 was banned from engaging in deceptive, fraudulent or illegal business acts following a civil lawsuit that claimed he was using four transportation brokerage companies—Eastern Connection Inc., A-Blue Knight Auto Carrier Inc., Autotrail Transporters Company Inc. and V&C Warehousing & Distribution—to scam customers.
At the time, he was required to pay $60,000 in restitution and $65,000 in penalties, while also being banned from engaging in the auto transportation broker business unless he posted a $200,000 performance bond.
In May 2010, Mr. Sclafani was held in contempt for failing to abide by the legal decision, and he was further banned from participating in any auto transport brokerage firms in the State of New York. He was also forced to pay an additional $255,000.
In February 2013, the Department of Transportation launched its current investigation after learning he was operating his scheme through a new, Connecticut-based company, USA Logistics Inc. After his license to operate the company was revoked, he created another new brokerage company, New Logistics LLC., in Fuquay-Varina, North Carolina, and had checks mailed from his Bayville home to a North Carolina bank.
In July 2013, Mr. Sclafani moved to his current residence on Knoll Street in Southampton, and from there on, prosecutors claim, he repeatedly changed the name of his business to avoid detection.
It is unclear when Mr. Sclafani was arrested, but he first appeared in federal court in Central Islip on Thursday, November 13. As part of the investigation, he was taken into custody, and he has been remanded to a Suffolk County jail facility. Financial statements, bank statements, check stock paper and computers have been removed from his residence.
Mr. Sclafani is being represented by Randi Chavis of the Federal Defenders of New York. Ms. Chavis was not immediately available for comment.
“When Mr. Sclafani allegedly violated his clients’ trust, he underestimated the resolve of law enforcement to protect hardworking consumers from scammers whose only intention is to defraud for their personal gain,” said Postal Inspector in Charge Philip Bartlett in a press release from the U.S. District Attorney’s Office.