INDIANAPOLIS - Federal agents have begun confiscating hundreds of cars that were issued clear titles in a suspected scam that was first reported by the Call 6 Investigators in December.
In a federal court filing, prosecutors have requested authority from a judge to seize 266 cars, including 21 cars that have already been located and confiscated by Secret Service agents.
According to the court filings, all of the cars and motorcycles had been issued clear titles through a process started by Mechanic's Liens Plus of Indianapolis. The owner of the business and his daughter are facing federal conspiracy charges, accused of manipulating the Indiana mechanics lien laws to allow people to stop making payments on their cars.
The Indiana Mechanic's Liens Statute allows auto repair shops to take or sell cars when repair bills go unpaid. Those mechanics must follow a specific lien process, which allows them to take priority over any lien held by a bank or finance company for the car. The law allows them to auction a car or keep it for themselves in some cases.
The owner of Mechanic's Liens Plus, Joseph Woodruff, 58, is charged with federal fraud and conspiracy counts. He is accused of filling out phony work orders for repairs that were never actually performed on his customers' cars.
He would be paid $1,000 in many cases, prosecutors said, to make it appear as though legitimate mechanics liens were being placed on cars, which allowed people to stop making payments and then receive clear titles on the cars.
The latest court filings in the case show that 32 of the cars had been titled to Mechanic's Liens Plus. Prosecutors spelled out in their court filing that Woodruff would sometimes keep his customers' cars for himself after pretending that banks or finance companies were filing formal protests of the phony lien that he was asserting.
Those cars would all be taken by the federal government if a judge signs the proposed court order.
Secret Service agents have also begun confiscating some of the cars from Mechanic's Liens Plus customers, including a 2007 Audi Q7 Quattro driven by Willetha Lashelle Allison, of Indianapolis. Her name was listed on the car's title after the involvement of Mechanic's Liens Plus.
She told the Call 6 Investigators that she enlisted the services of Mechanic's Liens Plus after "a source" connected her with the company. She declined to comment further.
Court papers reflect that Secret Service agents confiscated her car Jan. 25.
Agents have also confiscated a 2004 orange Hummer, a 2007 GMC Denali, a 2003 BMW, a 1984 Suzuki motorcycle, a 1971 Buick Riviera and at least two Chevy Monte Carlo cars.
In court papers, prosecutors wrote that one insurance company waived all rights to an automobile that it had owned, allowing it to be turned over to the U.S. government without lengthy court proceedings.
Prosecutors had originally identified 277 cars that had been issued clear titles through the racket, but six of those cars are not being confiscated.
Federal charges are lodged against Woodruff and his daughter, Nisha Woodruff, 28. An Indiana Bureau of Motor Vehicles employee, Lee Ann Rinehart, 56, is also charged with providing inside information from BMV computers that assisted in the clear titles being issued by Mechanic’s Liens Plus.
All three are set for trial in May. If they are found guilty, it could bring a federal prison term of five to 20 years.