South Shore Ford Owner Pleads Guilty to Theft by Deception

TRENTON – Attorney General Jeffrey S. Chiesa announced that the owner of a car dealership in Marmora that went bankrupt in 2006 pleaded guilty today to defrauding the company that financed his car inventory.  The dealer lied about his inventory in financial statements provided to the lender to conceal the fact that he failed to pay the lender over $11 million owed on hundreds of car sales.

Rudolph Chiorazzo, 68, of Marmora, who was president and owner of South Shore Ford, Inc., pleaded guilty to second-degree theft by deception before Superior Court Judge Raymond A. Batten III in Cape May County.

The charge was contained in an April 25, 2011 state grand jury indictment. Under the plea agreement, the state will recommend that Chiorazzo be sentenced to three years in state prison.

He must pay full restitution to Ford Motor Credit Company (FMCC).  Deputy Attorney General Mark Kurzawa took the plea for the Division of Criminal Justice Financial & Computer Crimes Bureau. Judge Batten scheduled Chiorazzo for sentencing on July 13.

Chiorazzo admitted that, in order to continue to receive financing, he falsified information about the value of the vehicles in his inventory in monthly financial statements he submitted to FMCC.  An investigation by the Division of Criminal Justice and New Jersey State Police revealed that he falsified the statements to conceal the fact that he failed to remit to FMCC more than $11 million in proceeds from 380 vehicles sold between February 2005 and July 2006.  Under their agreement, FMCC advanced money to South Shore to buy cars, taking back a security interest in the cars.  South Shore was required, upon sale of each vehicle, to repay FMCC the amount allocated to the vehicle.  FMCC previously secured a $15 million civil judgment against South Shore related to the fraud.

“This car dealer resorted to outright fraud to try to keep his business afloat,” said Attorney General Chiesa. “This type of financial fraud is a drag on the economy because it imposes large costs on lenders, which ultimately are passed along to honest borrowers.  We will vigorously prosecute such crimes.”

“While civil actions can provide important recourse for victims in these cases, it is vital to prosecute such defendants criminally in order to deter others,” said Director Stephen J. Taylor of the Division of Criminal Justice.  “We are devoting considerable resources to fighting white collar crime.”

Deputy Attorney General Kurzawa and Detective Eric Ludwick led the investigation for the Division of Criminal Justice.  Detective Sgt. William Gant led the investigation for the New Jersey State Police, assisted by detectives from Woodbine Station and the State Police Crime Scene Unit.  Also assigned to the case for the Division of Criminal Justice were Deputy Attorney General Peter Gallagher; Detective Ed Augustyn; Analysts Alison Callery, Rita Gillis, and Amy Patterson; and Technical Assistant Janet Duffield. Assistance was provided by Agent Scott Stefanowicz and other agents from the FBI’s Atlantic City Regional Office, and by Detectives Paul Worrell and Linda Infusino of the Cape May County Prosecutor’s Office.

— News release from the New Jersey Attorney General's Office