White Collar Crime News

Klause Cars and Trucks, Ocean City Car Dealership Raided September 6, 2009

Opening in 1984, Klause Cars and Trucks seemed to have a good reputation in the Ocean City area.  After this week’s events however, customers may soon  change their minds.  On Tuesday, the FBI raided the car dealership and hauled away dozens of boxes of documents. 

The owner Harry Klause and his attorney, William Hughes Jr. either have no idea as to what is going on or pretended that they didn’t when questioned by the press.  As the owner of a car dealership, Klause would clearly have an attorney on retainer most of the time.  Hughes does practice criminal law but he also handles other matters for a big firm so you can’t read anything into the fact that he has an attorney or his choice of attorney. 

Since he does not sell new cars from what I can tell, this does not seem to be  related to the cash for clunkers program.  One aspect of this story is important: the raid by way of the search warrant.  First of all, if the FBI is involved, this is serious and is not simply ripping off a customer on one transaction.  Instead, the allegation must involve some major fraud here.  Second, the fact that the FBI sought and obtained a search warrant indicates that there is at least some evidence that criminal activity has occurred (or is occurring). 

Third, the fact that the FBI raided the place and did not just send out a subpoena shows that the FBI is taking this very seriously and they are afraid that these documents could be destroyed.  So, my guess is that this involves some type of bank fraud issue.

Story is here.