Raising Cane
By Rob Perez
Sunday, September 9, 2001
The FBI is investigating a used-car dealership that allegedly sold luxury cars it didn't own to unsuspecting customers, who now are hiding the vehicles for fear of losing them. Car owners stuck
with bum dealThe probe of Luxury Motors Ltd., which abruptly shut its doors around the end of 2000, is being conducted as former customers face the prospect of having to give up expensive cars they purchased months ago because they may not be the rightful owners.
Some buyers have stored their autos in secret places, fearful that the vehicles might be repossessed.
Luxury Motors, which also is the target of about a dozen lawsuits in state court, has been accused of selling cars without having title to them and forging documents to dupe buyers.
One buyer was Mary Irene Dryzmala, a 77-year-old widow.
She paid Luxury Motors $25,000 last year and traded in her 1986 BMW for a 1999 Audi A8.
Volkswagen, maker of Audi vehicles, is now trying to repossess the car, claiming the company still owns it and that Luxury Motors never was in a position to legally sell it.
A company hired by Volkswagen to get the car back has told the family that the elderly woman could be arrested if she continues driving the car. She's also been told the car, being kept in storage, is considered stolen.
"Why should I be punished?" Dryzmala asks. "I paid for that car, and I can't even use it."
Dryzmala and other victims have been unwillingly dragged into a legal and financial nightmare that has drawn the attention of the FBI and has resulted in lawsuits from buyers and lenders who dealt with Luxury Motors.
The dealership and its president, Ricky Chan, are accused in court documents of engaging in fraudulent conduct to sell cars it didn't own.
Calls left on an answering machine for Luxury Motors and with the company's attorney, Howard T. Chang, were not returned.
But in court documents, Chan denied wrongdoing. He did not provide any explanation about the allegations. One lawsuit said Chan in January spoke about having cash flow problems.
Calls to the FBI were not returned. A Honolulu Police Department spokeswoman said her agency is helping the FBI with the investigation and referred further questions to the feds.
More than 25 complaints about Luxury Motors have been filed with law enforcement agencies, and the state's Department of Commerce & Consumer Affairs, which regulates auto dealerships, also has received complaints and is investigating.
The alleged scams usually involved forged title documents or making broken promises about the delivery of ownership papers, according to the lawsuits, attorneys and former customers.
In a June lawsuit filed by Mercedes-Benz Credit Corp., for instance, Luxury Motors and Chan were accused of forging lien releases and title documents so the defendants could sell three Mercedes vehicles -- still owned by Mercedes-Benz -- to third parties.
When Joe and Lynn Golonka in November paid Luxury Motors nearly $24,000 for a 1999 Volvo, Chan told them the title would be ready in a week or two, according to the couple's lawsuit.
When the title didn't come, they contacted Chan, who always had an excuse about why the paperwork wasn't ready, the couple said. One time he told them he had been away because of the Chinese New Year. Another time he said the woman who handled the paperwork was off because of a pregnancy.
The Golonkas still don't have the ownership certificate for the Volvo. They have since learned that another company has a lien on the car and thus holds the title. Without the title, the couple have been unable to renew the car's registration or get a safety sticker.
Fearful that the Volvo might be repossessed, the Golonkas have stashed the car at a friend's house, hidden under a tarp. It has been there for the past eight months.
"It's sitting under cover, rotting, and I can't drive it," Joe Golonka said.
When Lynn Golonka sought help from the county Department of Motor Vehicles, a clerk there already had received other inquiries from angry Luxury Motors customers, Golonka said.
The DMV clerk told her about one customer who was stopped on the road by a repossession agent and had her car seized there.
In the case of Dryzmala, the 77-year-old widow, Luxury Motors had leased the Audi and didn't have title to the car, according to Universal Credit System Inc., the company hired by Volkswagen to track down the vehicle.
Volkswagen already has repossessed other cars, and Universal is trying to locate two more besides the Audi, said an employee, who wouldn't give her name.
"We're going to go after our vehicles," she said.
Eugene Dryzmala, the widow's son, has been amazed by how heartless the auto maker has been to his mother's predicament.
"Basically, Volkswagen is saying, 'We don't care what you do. We want the car back or we'll have someone arrested,'" he said. "It's unbelievable."
A Volkswagen representative did not respond to a request for comment.
Consumer attorneys say customers who buy used cars in Hawaii and later discover the titles are defective have little recourse but to take the dealers to court.
In getting its used-car license, Luxury Motors was required by the state to post a bond of only $25,000 -- an amount that probably wouldn't even cover one of the disputed cases.
Michael Ostendorp, the attorney representing the Golonkas, said the state's Uniform Commercial Code protects consumers in transactions like those involving Luxury Motors.
Based on that code, someone who buys goods from a merchant in the business of selling such merchandise makes the purchase free of any security interests, including liens, between the seller and a third party, Ostendorp said.
Even if that argument holds up in court, it won't undo the troubles that the Luxury Motors mess has caused the Golonkas since buying the Volvo.
Because they haven't been able to use it, they ended up buying another car.
"To this day, I'm so frustrated," Lynn Golonka said. "I just want to forget about this whole thing."
Star-Bulletin columnist Rob Perez writes on issues
and events affecting Hawaii. Fax 529-4750, or write to
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu 96813. He can also be reached
by e-mail at: rperez@starbulletin.com.
