Financial Fraud: Sergey Kapustin Charged With One Count of Wire Fraud and Conspiring to Commit Wire Fraud
Auto Dealer Arrested In $2 Million Fraud On Russian Citizens
NEWARK, N.J. – A New Jersey auto dealer was charged today for allegedly defrauding more than 140 Russian citizens who were customers of his auto sales business, U.S. Attorney Paul J. Fishman announced.
Sergey Kapustin, 47, of Warminster, Pennsylvania, was arrested today by special agents of the FBI and charged by complaint with one count of wire fraud and conspiring to commit wire fraud. He will appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
According to documents filed in this case and statements made in court:
Kapustin was the owner and president of Global Auto Group, Effect Auto Sales and G Auto Sales, located in Elizabeth, New Jersey. Global bought and sold used cars, typically high-end vehicles that were classified as “salvaged.”
From January 2011 through December 2014, Kapustin allegedly operated business through a scheme to defraud customers, who usually lived in Russia, Ukraine or members of the former Soviet Union. Kapustin had one or more Russian language websites that offered for sale luxury vehicles, including Mercedes and Lexus that were normally priced below market value, that could be shipped to Finland for easy delivery to Russian citizens, if they agreed to pay full price upfront for the vehicle. Kapustin was Russian and his websites were geared to buyers who believed they were getting a “good deal” from a fellow countryman who could be trusted to follow through once the purchase price had been paid.
After the buyers would wire the full price to one or more bank accounts controlled by Kapustin, he would allegedly give them a litany of excuses and reasons for delay in delivery. Unbeknownst to them, more often than not Kapustin had neither possession of nor title to the vehicles being sold. At some point, the victim would be offered a different, often inferior car, burdened with added shipping and storage costs. The unsophisticated buyer, desperate to acquire something for money already spent, would oftentimes wire additional money to rescue the car from its storage; all to no avail. Those very few cars that did land in Finland were normally the product of salvage auctions for vehicles that had been immersed in or flooded with salt water and were inoperable. Kapustin allegedly stole approximately $2 million in this manner.
The count with which Kapustin is charged carries a maximum penalty of 20 years and $250,000 fine.
U.S. Attorney Fishman credited the special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to Kapustin’s arrest.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office Organized Crime/Gangs Unit.
The charge and allegations in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.