OGDEN -- State regulators shut down a Roy car dealership after the owner was charged with communications fraud.
Paul James Patterson, 33, is accused of collecting some $20,000 in fees from customers for services the state Motor Vehicle Enforcement Division says he never provided, according to documents filed in 2nd District Court in Ogden. He is also charged with causing an auction house more than $30,000 in losses for cars he bought there on credit, then sold without reimbursing the auction house.
Patterson's Auto Point dealership, at 3536 W. 4800 South in Roy, was shut down by regulators shortly after the charges were filed against Patterson in April, said Charlie Roberts, spokesman for the Utah State Tax Commission, of which the MVED is part.
Patterson wasn't able to post his $50,000 bail at Weber County Jail until May 10. He faces a status conference July 1 before Ogden 2nd District Judge Michael DiReda on the three
second-degree felony communications fraud counts. Each count carries a potential one- to 15-year prison term.
According to a MVED arrest affidavit, Patterson from May 17, 2012, to Jan. 2 this year collected $13,774 in fees for insurance, theft recovery systems and service contracts in connection with the sale of 17 vehicles.
Auto Point never obtained the state licensing required to sell the optional automotive services and never forwarded the $13,774 to the entity contracted to provide the services, according to the affidavit.
Patterson devised a similar scheme regarding registration and title services in the same time frame, according to the affidavit. Tied to the sale of 13 vehicles, it said, a total of $5,187 in document fees was collected for documents Auto Point never delivered.
Patterson last year also cost a local auction house $32,911 in losses discovered in December, according to the charging documents.
Patterson had entered into a "flooring agreement" with Brasher's Auto Auction. A flooring agreement is a line of credit extended to a buyer at an auction, Roberts explained.
Patterson bought a 2003 Acura MDX and a 2005 Subaru Impreza on credit at the auction, according to the charging documents, then sold them without paying off the "flooring loans" extended by the auction house.
Patterson, a Layton resident, is also charged in 2nd District Court in Farmington along with a co-defendant, Neil Barry Crist, 68, with one count each of communication fraud, a third-degree felony, and failure to deliver title, a class A misdemeanor.
The defendants collected more than $5,000 worth of fees for insurance, warranties and documents that were never delivered, according to charging documents.