The orders started coming in around September 2013, based on specifications a Chinese customer would give Lin. They weren't orders for just any old Rams, either.
"They were Longhorn editions, a highly equipped truck that had about a $50,000 sticker," said Shaver. "They were not what the market wants in Southern California." Shaver said incentives being offered on those trucks at the time ranged between $3,000 and $3,500 each.
Funds would be wired from a Chinese bank into AM Legend's account at East West Bank, in California. Lin would then transfer the money into an account labeled "I Auto Dealer's," which would then pay the dealership. Hopkins would place the order with the factory.
The scheme worked fine until around May 2014, when the dealership received notice of an audit by FCA looking at sales between September 2013 and May 2014.
During the audit, a problem popped up: The vehicles appeared not to be registered in Arizona. Shaver collected registration information from the trucks and called Arizona's Secretary of State Office for confirmation that they were registered properly. He didn't get it.
"Through the process of the investigation, we found out that every registration was fake and that the cars had indeed been exported to China," Shaver said.
The audit revealed that 117 trucks had been sold to Quadrant and then exported.
"I went back to the salesperson and the house of cards fell apart," Shaver said. Hopkins was fired. He later confessed and agreed to make restitution to the dealership, Burkhalter said.
"Getting duped is the biggest nightmare," Shaver said. "With the number of incentives, it can get risky fast. It's a big hit to dealerships."
Once the scheme had been identified, the dealership cut off the broker and notified the local police and the Arizona Highway Patrol. Arizona authorities informed the dealership that the U.S. State Department was also involved.
The dealership had to pay FCA $405,717 in chargebacks for the incentives.
Making matters worse, Quadrant had placed an order for an additional 55 big-ticket Rams. They arrived at the dealership with no true buyers in sight.
"We had to price those proportionally," Shaver said. "We liquidated them" at a loss of $106,132.
He then sued the players involved.
A jury trial began in September, at the Orange County Central Justice Center, part of the Superior Court of the State of California.
"The defendants were aggressive," Burkhalter said. "They said, "There's nothing illegal about exporting cars,' but we pointed out that there were signed dealer agreements and contracts that didn't allow for exporting. The jury understood that."
Burkhalter argued for the Racketeer Influenced and Corrupt Organizations Act in the case and was successful. Burkhalter said, as far he knows, this is the first time RICO has been successfully used against an automotive export ring.