The latest stolen-supercar story hit the news recently when U.S. Customs and Border Protection intercepted a stolen Ferrari F50 on December 14, 2019, at the Peace Bridge Port of Entry in Buffalo, NY. Alert CBP officers noticed that some of the rivets on the dashboard VIN plate were covered in a black tar-like substance. The officers checked pictures of similar vehicles and saw clearly positioned rivets without any goo.
That observation caused them to place a “compound hold” on the F50 and call the National Insurance Crime Bureau for assistance. The NICB inspected the F50 and smelled a rat. It sent photographs to Ferrari, and about a month later, it was confirmed that the F50 had been reported stolen in Italy in 2003.
Such incidents serve as a stark reminder for both buyers and sellers alike to exercise caution and conduct thorough due diligence when engaging in car transactions. For individuals considering selling their cars, tales of stolen supercars serve as a cautionary tale.
While most sellers operate in good faith, instances of fraudulent activity underscore the importance of taking proactive measures to protect oneself and potential buyers. Utilizing services like a valuation not only helps sellers establish a fair asking price but also serves as a safeguard against unwittingly participating in illicit transactions. By obtaining an accurate assessment of their vehicle's worth, sellers can confidently navigate the sales process, mitigating risks and fostering transparency.
Similarly, for potential buyers, thorough research and diligence are paramount when considering a vehicle purchase. Utilizing reputable platforms to search for listings, such as trusted automotive websites or classified ads, can provide a wealth of information and help identify reputable sellers. When searching for specific models, it's essential to scrutinize the details provided, verify the vehicle's history, and, if possible, arrange for an independent inspection. This approach not only enhances the likelihood of finding a reliable vehicle but also minimizes the risk of falling victim to fraudulent schemes or purchasing a misrepresented product.
In the realm of purchasing used cars, the importance of due diligence cannot be overstated. Beyond simply browsing listings, prospective buyers should delve into the specifics of each vehicle, considering factors such as mileage, maintenance records, and any reported accidents. This meticulous approach is particularly crucial when seeking used cars, as it ensures that the investment aligns with both budgetary constraints and long-term financial goals. By scrutinizing every aspect of the purchase, from the vehicle's condition to its associated costs, buyers can make informed decisions that resonate with their individual needs and preferences.
The cast
The F50 carried Alberta, CAN, plates and was registered to Ikonick Collection Ltd. of Alberta. It was shipped by Ferrari of Quebec on a commercial carrier, Blue Line Trucking, and was headed to Mohammed Alsaloussi in Miami, FL. Alsaloussi is the sole owner of Ikonick and had just purchased the F50 online through CAR Leasing in Montreal for $1,435,000. CAR Leasing was acting as an agent for a Japanese car dealer.
The Italian owners are Paolo Provenzi, his father, Remigio, and his brother Roberto, who had purchased the F50 on February 19, 2003, for €260,000. It was stolen on March 30, 2003, in Imola, Italy, when it was parked in the Hotel Donatello parking garage.
Forfeiture proceedings
The CBP formally seized the F50 in March 2020 and instituted forfeiture proceedings. As part of the forfeiture proceeding, CBP obtained an appraisal of the F50 showing a current value of $1,949,669. The appraisal describes the F50 as showing 17,234 kilometers (10,708 miles) and appearing to be in good condition except for some paint chips on the front bumper.
The appraisal relied on three comparable F50 sales at $1.89 million, $2.34 million and $2.85 million. The appraiser valued this F50 at $404,300 less than the average of the three comparable sales because of mileage; the average miles on the comparable F50s was only 6,665. (If the higher mileage is the sole basis for that value adjustment, that is a whopping depreciation rate of about $100 per mile driven!)
Lawyers for Alsaloussi and the Provenzis both filed petitions to stop the forfeiture and to turn the F50 over to them. CBP denied the Alsaloussi claim and granted the Provenzi claim. After Alsaloussi objected and asked for the matter to be heard in court, CBP submitted the matter to the U.S. District Court in New York. CBP took a neutral position and asked the court to give the car to whomever it determines is the rightful owner, provided they pay CBP’s expenses of approximately $8,476.
A sordid past
The Provenzis are represented by Alessandra Piras, a member of the Miami office of Cinotti LLP. Piras tells an amazing tale of the F50’s sordid travels around the globe. Sometime after it was stolen in Italy, the F50 was exported to Japan, “the only country in the world where you can lawfully register a stolen car.”
In mid-2019, Provenzi received a phone call from a Japanese dealer who wanted to talk about the F50. Piras claims Provenzi recorded the conversation, and that the Japanese dealer asked him to inform the Italian police that he had recovered the car and then transfer ownership to the dealer. For that assistance, Provenzi would be paid a modest sum of “around $100,000.”
When Provenzi expressed his preference to get the car back, the dealer taunted him with, “You can’t get the car and we can clean it without you,” so he might as well take the money.
After the F50 surfaced in Canada in October 2019, Piras contacted the Canadian dealer and told him the car was stolen and listed as such by Interpol. She recounted his response as, “I don’t care about Interpol. If it’s not shown as stolen in Canada, it’s not stolen.”
An aside: As collectors, we may want to be more careful about buying cars that come out of Canada. Piras said that a CBP officer told her, “You don’t know what we see happening in Canada.”
Alsaloussi is represented by Richard O’Neill, a partner in the Seattle office of Neville Peterson LLP, who was brought into the case by its New York office. O’Neill said that he was not far enough into his factual investigation to comment on the record. But he feels pretty solid because his client has a validly issued Canadian title and registration, which should be significant.
Which country’s law applies?
We have a multi-jurisdictional dispute being fought here in the U.S., the place where nothing actually happened. The ownership of the F50 will be determined by a U.S. court, but which country’s laws will it use in determining ownership?
The initial validity of the Provenzi ownership should be determined under Italian law. There will undoubtedly be an inquiry into whether the car was actually stolen from the Provenzis, but it went to Japan and was reportedly titled there. Will Japanese law be used to determine the validity of that title?
The car then went to Canada and was titled there. Will Canadian law be used to determine the validity of that title? Would that be based on the validity of the Japanese title, or determined solely under Canadian law?
On the other hand, now that we are in the United States, will ownership be determined under U.S. law? If so, will that give any consideration to ownership principles under the laws of the other three countries?
It may matter. U.S. law is quite clear that a thief cannot pass good title. If we employ that principle, then ownership would stay with the Provenzis, as everyone else’s interests down the line follow from the thief.
But “Legal Files” has always been told that Italian law protects the innocent purchaser who pays fair value for the stolen car. Would a U.S. court apply that principle to deny the Provenzi claim because, under their country’s law, they are not entitled to get the car back? Piras discounts that and denies that Italian law works that way. “If the car is listed as stolen on Interpol, the Italian police will seize it and return it to its rightful owner.”
Why so cheap?
As a practical, as well as legal matter, both parties will have to establish their bona fides in court. Recall the appraisal commissioned by CBP that described the F50 as in good condition except for some rock chips and rather high mileage at 10,708.
The Provenzis claim to have purchased the F50 in 2003 for €260,000. That is about what one would have expected to pay for a wrecked F50. Was their purchase legitimate? Piras insists it was, explaining that they purchased it from a family friend who owned several Ferraris and was dying of cancer. There may have been a big gift in the purchase price, but it was real.
That seems hard for us to believe. I have no doubt Alsaloussi will be asking a lot of questions about the Provenzi purchase.
At the other end, Alsaloussi paid about $1.4 million for a car appraised at almost $2 million. That is not quite the smoking deal the Provenzis got, but it’s still pretty cheap. What did he know about the car that would explain the low price?
Piras sees it as suspicious that he didn’t suspect anything was amiss, or even do any sort of due diligence. “Wouldn’t someone spending almost $1.5 million on a car do some investigation? All he had to do was contact Ferrari, and they would have told him the car was stolen.”
Fair enough, but I’ve seen car collectors spend more than that with virtually no due diligence at all, so I’m not so sure what to think. However, I am sure that the Provenzis will be asking all sorts of questions about the circumstances of the Alsaloussi purchase.
What about a refund?
We are still early in the case, but we should expect Alsaloussi to invite his seller to the party. If the F50 was stolen and goes back to the Provenzis, then Alsaloussi would certainly be entitled to get his purchase money back. He should be expected to bring CARS Leasing and the Japanese dealer into the litigation, assuming that he can obtain jurisdiction over them in the United States.
There will undoubtedly be more to come on this story. If the parties keep it interesting, you will read more about it here. ♦
His comments are general in nature and are not intended to substitute for consultation with an attorney.