Auto City employees allege dealership sells knowingly faulty salvage cars

- A Charlotte used car dealership is accused by former employees of selling knowingly faulty salvage vehicles to unsuspecting customers, with the vehicle titles sometimes being pushed through as “clean”, despite having serious damage.

FOX 46 Charlotte previously profiled Auto City, located at 4700 E. Independence Blvd., in a previous report, which can be seen here: http://www.fox46charlotte.com/news/local-news/202322144-story

After that story aired, a North Carolina Department of Transportation inspector confirmed he’s opened up an active investigation into the dealership, and former employees contacted investigative reporter Bill Melugin to blow the whistle on what they thought were unethical business practices while they were employed by Auto City’s owner.

“There was a sense of relief when I first saw your story, I thought I was the only one,” Ryan Ricker said. “I’m stepping forward because something needs to be done about their business practices."

Up until April of this year, Ricker says he was working at Salvage Auto Supply at 3301 Robinson Circle in Charlotte. It’s a salvage yard directly affiliated with Auto City. The business website still lists Ricker as an inventory manager, even though his employment ended six months ago.

Public records show Salvage Auto Supply is owned by Evgenii Desiatnikov, the same man who owns Auto City. He goes by the name “John”.

Ricker told FOX 46 that while he was working as a manager at Salvage Auto Supply, they were ordered to purchase vehicles with major damage from insurance auctions, strip them apart, rebuild them, and sell them on the lot at Auto City.

“I was over at dispatch, so I would send the guys to the auctions to pick up the vehicles,” Ricker said. “98 percent of the vehicles that were sold from the Auto City lot were salvage vehicles. Back when South Carolina flooded really bad, I’m pretty sure we bought like 500 cars, flood cars, some of these went to Auto City as well, to be sold.”

Ricker said that during his employment, they were often piecing together different parts from high end vehicle brands, so they could be sold for more.

“Infinity’s, Mercedes, BMW, Lexus,” Ricker said.

Ricker said he believes Auto City’s customers often had no idea they could be buying a salvage vehicle with major damage because he witnessed the vehicle titles sometimes being marked clean instead of salvage.

“When your car has to be cut in the middle, literally in the back doors, and the entire rear end, a new car welded together, I’m sorry, that title should not be able to slide through as clean,” Ricker said. “In my year and a couple months that I was employed with them, I would feel safe to say well over 200 cars went through as a clean title, that were not.”

Investigative reporter Bill Melugin also had a phone conversation with a second former employee of Salvage Auto Supply who asked his name not be used in the story. The employee backed up Ricker’s allegations about the salvage vehicles, saying the cars were built from crashed junk yard parts, and saying “The cars we sold were f**ed up.”

A DOT inspector confirmed that earlier this year, he charged Desiatnikov with four counts of failure to deliver vehicle title, with a court date set for November 9, 2016. 

Desiatnikov and Auto City were being sued by a creditor in Georgia for allegedly owing more than $700,000 in unpaid loans, but we’ve learned both sides have recently come to an agreement.

The Better Business Bureau gives Auto City a “F” rating, and says the dealership has failed to respond to numerous customer complaints.

Some of Auto City’s customers say that doesn’t surprise them.

“Don’t buy anything there, ever,” Gina Hill said. 

“They’re not professional at all,” Courtney Riley said. 

Both women told FOX 46 Charlotte they’re without transportation after the vehicles they bought from Auto City broke down numerous times since purchase.

In Hill’s case, it happened while on a road trip to Texas.

“I had to find my own way home, I had my daughter with me, and two dogs,” she said.

Hill said Auto City told her she would get a discount if she had her Volkswagen towed to Auto Care, right off of Atando Avenue in Charlotte.

Auto Care is an auto repair business affiliated with Salvage Auto Supply and Auto City. Public records show it’s owned by Vladimir Karzukhin, who we’re told is the stepfather of Desiatnikov.

Records show Auto Care was dissolved by the state this year for failing to file the proper paperwork, that means the business is technically in violation of the law by still operating, and is no longer considered a legal business entity protected by corporate laws.

“They fixed the transmission, then the battery went dead, the radio went dead, the O2 sensor came on, I mean this was all within the past three weeks,” Hill said. “Labor Day weekend I was stranded, cause it died. I’ve not gone two weeks since June without having to go up there.

Riley says the Toyota Prius she bought from Auto City has had similar issues.

“I was leaving from work, the car started to sputter, I get on the highway, do like 60, and then it just stopped, all the oil came out, we had to pull over, and that’s when everything started,” she said.

Riley told FOX 46 she was also told to tow her vehicle to Auto Care, where a mechanic told her there were two cracks in the engine which had been there before the car was purchased.

“Auto Care fixed it, and then three months later it blew up again, that’s when they said it’s the intake, everything is wrong with the engine, the whole engine is done,” she said. “We took it to a Toyota dealership and they couldn’t fix it because the engine Auto City put in the car doesn’t have a VIN number.

Both women say they were forced to pay out of pocket for repairs, and weren’t given any receipts.

“I’m a single mom and I have a kid who plays sports so that’s a lot of driving, and I don’t have a car, I have to depend on other people and that is so frustrating,” Hill said.

“We’re broke, we don’t have a car anymore and I have a two month old daughter I need to put on a bus to get somewhere, or take rides from people,” Riley said.

When FOX 46 Charlotte stopped by Salvage Auto Supply to shoot video and speak with a manager, employees immediately came out and locked all the gates on the property. At the same time, customers approached us and said they were kicked out of the business because “the media is here”.

FOX 46 Charlotte also stopped by Auto Care to speak with an owner, but employees said nobody was there. Melugin left his card and asked the employees to tell ownership to give him a call.

In an email at a later date, Auto Care owner Vladimir Karzukhin told Melugin he had no comment about the allegations.

After weeks of email correspondence with Desiatnikov to get his side of the story, he eventually sent a statement.

“Any car that was bought at the auction that had been damaged came with a salvage title,” he wrote. “After we repaired the vehicles and put them up for sale, the vehicle has to be inspected by the state to make sure all repairs were done properly. After that they are put up for sale. When a customer purchases this vehicle, they must sign a Damage Disclosure Statement. We then have to take that and the inspection to the DMV before they can get there [sic] tags.”

Desiatnikov went on to say that, unlike other used car dealerships, most customers are given a free three month warranty, that their vehicles are safe to drive, and that they do their best to serve their customers.

But Hill and Riley told FOX 46 Charlotte their vehicle issues lasted long past the expiration of the warranty, and their Damage Disclosure Statements revealed nothing.

Hill sent us a copy of hers, it says the vehicle she bought was not a salvage, wasn’t a flood vehicle, and hadn’t been reconstructed.

“They should be prosecuted, they shouldn’t be able to sell cars anymore,” Riley said.

“It’s like they were taking advantage of me and her and all the other people that are hurt in this situation,” Hill said.

“On paper, the idea was genius,” Ricker said. “You have a salvage yard where you can purchase these vehicles at reduced rates from insurance auto auctions, you can rebuild them, fix them, sell them, you have the repair facility which was the largest in Charlotte and one of their selling points, but it just wasn’t sustainable.”

Before his interview with FOX 46 Charlotte, Ricker disclosed that Salvage Auto Supply terminated him after he was arrested for cocaine possession. We asked Ricker what his response would be to those who would accuse him of being a disgruntled former employee.

“Yes sir, maybe I have different recreational habits than other people, but you know what, I can guarantee you hook me up to a lie detector, every bit of what I’ve told you is the truth.”

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