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Description: Philadelphia, Pennsylvania criminal defense lawyers represented defendants charged with securities fraud.

Felix Granowski, 58, of Matawan, and Alec Morgunov, 34, of Manalapan, admitted that between 2012 and 2016, they engaged in a scheme to sell high-mileage, used vehicles with false, low-mileage readings entered on the vehicles’ odometers and titles. According to court filings, the defendants purchased high-mileage vehicles from individuals, arranged to alter the vehicles’ odometers to reflect false, lower mileage readings, and then obtained motor vehicle titles reflecting those false, lower mileages. Granowski and Morgunov then used the fraudulent title documentation and artificially lower odometer readings to sell the vehicles, including at an auction located in the Eastern District of Pennsylvania. By deceiving purchasers into believing the vehicles had fewer miles than they actually had, defendants sold the vehicles at inflated prices, resulting in consumers paying more for the vehicles than they would have paid had they known the true mileages.

“When individuals misrepresent the mileage on used cars, they deceive consumers into paying more money for those cars while also hiding vital information that can impact vehicle safety and repair costs,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We are committed to protecting consumers by prosecuting individuals who engage in this type of fraud.”

“We’re proud of our collaboration with the Department of Justice to investigate odometer fraud,” said Deputy Administrator Dr. Steven Cliff of the National Highway Traffic Safety Administration (NHTSA). “Our top priority is keeping people safe on the road. Anyone who thinks they’ve been a victim of odometer fraud, needs to contact their state enforcement office. They can also visit our website, NHTSA.gov, for helpful information on how to detect a vehicle that may have had its odometer rolled back.”

In pleading guilty, Granowski and Morgunov admitted that they were part of a scheme that caused at least 118 cars to be sold with rolled-back odometers and falsified titles, resulting in consumer losses of at least $674,606.

The defendants are scheduled to be sentenced on Aug. 31 and Sept. 1, respectively. Granowski and Morgunov each face a maximum sentence of five years in prison on the conspiracy to commit securities fraud charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The NHTSA Office of Odometer Fraud Investigation investigated the case.

Trial Attorneys Natalie N. Sanders and Ryan E. Norman of the Justice Department’s Consumer Protection Branch and Assistant U.S. Attorney Nancy Rue of the U.S. Attorney’s Office for the Eastern District of Pennsylvania are prosecutors for the case.

Outcome: Defendants pleaded guilty.

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