Brotman would sell expensive cars for clients and keep the proceeds, or else he’d give the cars to other people to settle other debts, the court was told Over a year ago, the inaugural SCM weekly Insider Newsletter headlined the indictment of classic car dealer Peter Brotman on federal charges for allegedly defrauding customers and a bank of more than $2.1 million through a consignment scheme. At that time, he was living in France, while his wife and two daughters remained in the States. Recently, Brotman was tracked down by the FBI in Barcelona, Spain, returned to Pennsylvania, and pleaded guilty […]
Brotman would sell expensive cars for clients and keep the proceeds, or else he’d give the cars to other people to settle other debts, the court was told
Over a year ago, the inaugural SCM weekly Insider Newsletter headlined the indictment of classic car dealer Peter Brotman on federal charges for allegedly defrauding customers and a bank of more than $2.1 million through a consignment scheme. At that time, he was living in France, while his wife and two daughters remained in the States.
Recently, Brotman was tracked down by the FBI in Barcelona, Spain, returned to Pennsylvania, and pleaded guilty to charges in federal court. Described by the prosecution as a man that master swindler Charles Ponzi would have envied, he was sentenced to five years in federal prison for frauds totalling almost $2.2 million.
The court records, while presenting a straightforward case, are lengthy. This is our summation of them.
In a 16-count indictment citing wire, mail, and bank fraud, Brotman was accused of defrauding eight classic cars owners, including actor Nicholas Cage, out of a total of $1.2 million. He also defrauded Willow Grove Bank of almost $1 million on two separate loans, according to the indictment.
As part of his plea bargain, Brotman was ordered by U.S. District Court Judge R. Barclay Surrick to forfeit more than $1.8 million toward restitution.
The frauds occurred between November 2002 and December 2004, while Brotman, now 46, operated the Pennsylvania Motor Sports Corporation, according to federal authorities. Brotman would sell expensive cars for clients and keep the proceeds, or he’d give the cars to other people to settle other debts, the court was told.
Brotman was arrested in Spain by Interpol, while claiming to be brokering a $450 million art deal, the authenticity of which was questionable, authorities said. Brotman allegedly sent his customers emails and faxes promising to pay them from the commission, but that method of payment had not been agreed upon.
The losses suffered by the car owners ranged from $20,000 to $600,000, and the cars involved included a 1948 Packard, 1954 Jaguar, 1964 Rolls-Royce, and 1998 Bentley. Nicholas Cage apparently consigned three Ferraris and one Cobra to Brotman but received only partial payment, losing $300,000, according to court papers.
When the owners didn’t receive their disbursements, Brotman made misrepresentations to keep them from filing lawsuits or complaining to authorities, the indictment said. In some cases, Brotman sent customers checks drawn on bank accounts he knew lacked sufficient funds.
Brotman arranged an $850,000 line of credit with the Willow Grove Bank to finance the purchase of cars but did not give the bank titles to the cars listed as assets, according to documents. Indeed, according to the FBI investigation, he did not have possession of cars he claimed to have. He also borrowed $105,000 to buy a tractor trailer to transport his vehicles but failed to inform the bank when he sold it, authorities said.
According to prosecution documents, Brotman could have been sentenced to 125 years in prison, accompanied by a fine of $2.5 million. Federal Sentencing Advisory Guidelines suggested 41 to 51 months.
In Brotman’s Defendant Sentencing Memorandum, his lawyer contended that Brotman “did not prey on the unsophisticated or otherwise vulnerable consumer. His victims were businessmen, equally knowledgeable in the collectable car trade.”
Some fellow dealers in the classic car business, and regular contributors to SCM, remain sympathetic to Brotman, and contend that a similar fate can befall anyone trading in a fluctuating market.
“Peter’s major fault was not telling his clients he had made colossal errors in judgement and needed to file for bankruptcy and work out a deal with them,” said one dealer who preferred to remain unnamed. “In my book, $1.8 million is not worth taking away five years of someone’s life.”
