The Crime Of Selling Your New Car « Palisades Hudson Financial Group: "Exporters are fighting back against prosecutors’ efforts to seize vehicles and bring lawsuits in what is, they argue, essentially a civil dispute. Michael Downs, of Fort Lauderdale, Fla., has proactively filed a lawsuit in federal court, attempting to secure a declaratory judgment that his business is legal. Downs told The Times that his company complies with all state and federal laws, though New York prosecutors have sought to freeze a company bank account and seize cars.
Ely Goldin, an attorney representing a couple who have also run afoul of federal prosecutors’ efforts to stop this practice, told The Wall Street Journal that the government should not make a criminal case out of a civil dispute between car dealerships and their customers. “Why should a buyer of a car be prohibited from exporting a car after he paid top dollar for it?” Goldin asked.
The question is a good one, and the government has yet to provide a satisfactory answer. And as China’s used car market continues to grow, the large gap between the cost of a new luxury car in the U.S. and a pre-owned car’s resale value in China will continue to attract the attention of entrepreneurs willing to expend the time and effort to pursue the venture.
Automakers have rules forbidding dealerships from willingly selling cars to known exporters. Those rules should make this business a struggle between auto manufacturers and resellers – a dispute in which federal prosecutors have no clear place. But until someone like Downs can get a judicial opinion, the threat of criminal prosecution will continue to dominate what should be a matter for, if anything, private litigation.
People looking to make a buck, absent any fraud, is just capitalism. Federal prosecutors should have better things to do than serving as the muscle behind car makers and their dealers."
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