A Calgary man has now been charged with 164 counts of fraud and theft in connection with an extensive investigation into a defunct vehicle consignment dealership.

From July 16, 2011, and August 31, 2014, citizens brought 116 vehicles to an auto consigning company named TREADZ Auto Group with the intention of selling their vehicles.

The vehicle owners paid a $299 fee and signed a contract on the understanding that TREADZ would:

  • Display, demonstrate and advertise the consignment vehicle
  • Pay the consignor a settlement cheque within 10 business days of selling the vehicle
  • Deduct and pay all liens
  • Accept all trades whole or in part payment of vehicle

The owners never transferred the ownership of the vehicles to the consignor.

78 of the vehicles collected by TREADZ were then sold to buyers, who bought them legally, but had no idea the company did not actually own them.

Police say that TREADZ failed to compensate the original owners for the vehicle sale and even failed to pay the lien associated with the vehicle in some cases.

Authorities estimate the losses at about $1.8M.

Police also say that the dealership fraudulently re-registered 62 vehicles in the company’s own name using phony ownership documents.

38 of those vehicles were then used to secure a $484,000 loan from a credit company, which was never repaid.

A portion of those vehicles were then sold to third parties, putting those new owners at risk of needing to pay the debt owed to the credit company or have their vehicle seized.

The credit company was able to recover 27 vehicles, but accepted the financial loss on the others.

The total loss by vehicle owners and the credit company is estimated at $2.2M.

As a result, Sean Patrick O’Brien, 47, of Calgary, has been charged with 89 counts of fraud over $5,000, 71 counts of theft over $5,000 and one global charge each of trafficking in property obtained by crime, using a forged document, counterfeiting a mark and fraud over $5,000.

O’Brien is expected in court on July 15, 2016.

A class-action lawsuit, launched by the victims of TREADZ against the Alberta Motor Vehicle Industry Council, is still before the courts.

According to the suit, the victims say that AMVIC not only let TREADZ get away with stealing their money and vehicles, but it knew about the situation and failed to take appropriate action or fix problems in the industry.

The victims claim that the provincial regulatory body should have taken action to protect them.