Dealer Sentenced To Five Years In Prison For Odometer Tampering And Money Laundering

Illustration for article titled Dealer Sentenced To Five Years In Prison For Odometer Tampering And Money Laundering

Photo: AP (AP)

Car dealer Shmuel Gali was sentenced to five years in prison Monday in federal court in Brooklyn for what prosecutors said was a long-running scheme to buy cars, tamper with odometers, and resell the cars at a profit.

If you thought odometer fraud died when odometers started going digital, well, it didn’t, as the National Highway Traffic Safety Administration estimates that nearly half a million cars are sold every year with false odometer readings. Gali’s case shows how dishonest dealers do that on the ground level.

Gali struck a plea agreement with with prosecutors in a document filed last August before, after various delays, he was sentenced Monday. Prosecutors said that Gali and his brother misrepresented the mileage on around 690 cars from 2006 to 2011, and that odometers were rolled back around 69,000 miles on average.

According to the plea agrement (embedded at the bottom of this post), here is one example:

Illustration for article titled Dealer Sentenced To Five Years In Prison For Odometer Tampering And Money Laundering

Screenshot: Department of Justice

If you’re wondering how electronic odometers were changed, well, apparently you can find people to do that.

“On various occasions,” the plea agreement says, “Shmuel witnessed these individuals using a handheld electronic device that lowered the mileage on electronic odometers to the mileage … Shmuel Gali requested.”

Gali and his brother purchased vehicles from Florida, Illinois, Maryland, and Missouri, using fake names and fake dealer names in the process, before having the odometers changed and reselling them in New Jersey and Pennsylvania, getting them titled with the false mileage in Pennsylvania sometime in between, according to prosecutors.

A lawyer for Gali did not immediately return a request for comment.

In addition to the 2007 Ford F-150, prosecutors mention a 2008 Chrysler Town and Country, a 2009 Honda Pilot, and a 2006 Ford Escape as cars that had their odometers changed and got resold.

NHTSA gives the following advice to car buyers wary about odometer fraud:

  • Ask to see the title and compare the mileage on it with the vehicle’s odometer. Be sure to examine the title closely if the mileage notation seems obscured or is not easy to read.
  • Compare the mileage on the odometer with the mileage indicated on the vehicle’s maintenance or inspection records. Also, search for oil change and maintenance stickers on windows or door frames, in the glove box or under the hood.
  • Examine the tires. If the odometer on your car shows 20,000 or less, it should have the original tires.
  • Look at the wear and tear on the vehicle—especially the gas, brake and clutch pedals—to be sure it seems consistent with and appropriate for the number of miles displayed on the odometer.
  • Request a vehicle history report to check for odometer discrepancies in the vehicle’s history. If the seller does not have a vehicle history report, use the car’s VIN to order a vehicle history report online.

I would add “get a pre-purchase inspection” to this list, as any mechanic worth their salt should be able to tell you if the car looks like it’s been driven significantly more miles than what’s on the odometer. Stay safe out there!


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