Canadian Lessor Victimized by Criminal Lessees
An investigation has found more than a dozen cars leased from Four Star Auto
Lease Ltd. to leaders and associates of gangs suspected or convicted of
criminal activity, according to the Vancouver
Four Star President Erich Schmidt said that he first knew about the leases a
year ago when cars were brought back with bullet holes. Upon investigation, he
found that they had been referred by brokers; Schmidt felt his company had been
victimized by brokers referring shady customers to his firm for financing
agreements without his knowledge.
Four Star adds, in a release, that it is “a lease company that sources its
businesses through other dealers. [Its] business model is very similar to that
of a finance company. As such, [it] rarely deals with the customer
He had talked to both police and the Insurance Corporation of B.C., asking
for a heads-up on gangsters that are already in their files. But, as they told
Schmidt, this is against privacy law.
According to Four Star, the company will continue to work with the police
when required, but “credit bureaus do not report criminal activities and personal
criminal checks require permission from the customer.”
To prevent further criminal leases, “the company is also engaging in a
detailed analysis of the portfolio to see if any patterns exist amongst the
dealers that send [the company] the business so [it] can act further in
reducing [its] exposure to this kind of element.”
Schmidt said he has cut off business with three or four brokers who seemed
to have been referring criminals to his company, some with false paperwork and
Police and regulators say many gangsters are leasing cars as an easy way to
unload some of their illicit cash on big-ticket luxury vehicles. These vehicles
are usually modified with bullet-proof Kevlar and have secret gun compartments.
Vancouver Police Insp. Dean Robinson advised businesses to be cautious about
who they are dealing with, as leasing companies may unknowingly aid in the
movement of illegally obtained money.
To lease these vehicles, a large cash deposit is normally paid, something
that should raise suspicion. But as the car market is not covered by federal
legislation, dealers are not obliged to report suspicious transactions, reports
the Vancouver Sun.
In a response to the Vancouver Sun
article, Enrich Schmidt stated that he was “extremely disappointed with the article”
as it implied that Four Star “is knowingly entering into these contracts, which
the company knows is untrue.” He adds that “he believes this to be an industry-wide
problem which needs to be addressed by all those that are affected by it,
including businesses and government.”
Schmidt has stopped leasing expensive cars because of
the gang problem.