Texas Attorney General Greg Abbott recently ordered an asset freeze and temporary restraining order against the owner of a Houston auto auction, seeking an accounting for millions of dollars in fees fraudulently assessed against those who participated in auctions to purchase vehicles.
Arie (Eric) Shalev’s auction at 8335 North Freeway uses several business names, including A&R Distributors Inc., E.S. Auto Sales Inc., Best Buy Motors Inc., Giant Mart Inc. and Golden Aribah Investments, L.L.C.
“Our investigators secured this asset freeze because we had reason to believe this individual would likely abscond with money owed to numerous consumers,” said Attorney General Abbott. “The defendant’s mode of operation is to skim lots of cash up front and impose a strict no-refund policy. This kind of operation cannot be tolerated.”
Shalev required auction participants to pay a $10 entry fee, and what he described as a refundable $200 deposit before bidding on a vehicle. If a bid was accepted, Shalev represented that this money would be applied to the total cost of the vehicle. Consumers, many of whom spoke little or no English, were hurried into signing a “terms and conditions” form after paying deposits. This instrument, written in English, supposedly set the ground rules for the auction, but in reality it set a trap enabling Shalev to withhold much more money from consumers.
A consumer who won a bid would be required to pay up to 50 percent down in cash the first day, then Shalev or his staff insisted the consumer return the next day to pay in full. When a consumer asked about the balance owed, Shalev or his employees would give vague answers or tell the consumer they should discuss it the following day.
Upon returning to pay in full, the consumer would often find he or she owed much more money than expected, and Shalev also assessed several fees that were not previously disclosed. When customers became irate or refuse to pay, Shalev would summon his “security detail” to the site to escort them away, resulting in the loss of all money paid up front. Those who did pay the exorbitant prices and fees sometimes discovered that the vehicles they purchased were not even in working condition, as promised, and should not have been auctioned. Shalev also often shredded consumers’ paperwork, sometimes in their presence, to evade records of sales.
The Attorney General’s investigation into Shalev’s bank accounts indicates he only accepts cash or cashier’s checks and his profits have soared into the millions of dollars. The lawsuit requests that penalties be assessed against Shalev and his businesses of up to $20,000 per violation of the Texas Deceptive Trade Practices Act. The suit also asks that Shalev relinquish all funds wrongly taken from consumers and that restitution be ordered.
Consumers who believe they may have been defrauded by such businesses may file a complaint with the Attorney General by calling (800) 252-8011 or file complaints online at www.oag.state.tx.us.
Source: Texas AG’s Office
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