Sergey Kapustin Arrested in $2M Auto Fraud Scheme

NEWARK, N.J. — A New Jersey auto dealer has been busted in a $2 million international scam that targeted more than 140 Russian-speaking customers hungry for luxury cars at bargain prices. Sergey Kapustin, 47, of Warminster, Pennsylvania, was arrested today by FBI agents and charged with one count of wire fraud and conspiring to commit wire fraud.

Kapustin, owner and president of Global Auto Group, Effect Auto Sales, and G Auto Sales in Elizabeth, New Jersey, allegedly ran a years-long fraud scheme from January 2011 through December 2014. He used Russian-language websites to lure victims from Russia, Ukraine, and other former Soviet states with promises of below-market Mercedes and Lexus models that could be shipped to Finland for easy pickup—so long as buyers paid the full price upfront.

Victims wired money to bank accounts controlled by Kapustin, only to be hit with endless excuses for delivery delays. In reality, Kapustin often had no title to—or even possession of—the vehicles being sold. Buyers, many of them unsophisticated and trusting a fellow Russian speaker, were pressured into paying additional fees for shipping and storage to “rescue” nonexistent or damaged cars.

When vehicles did make it to Finland, they were frequently saltwater-flooded salvage wrecks—junked hulks from auction lots that couldn’t even run. Kapustin allegedly pocketed approximately $2 million in fraudulent payments from desperate buyers who thought they were getting a deal.

The single count of wire fraud and conspiracy to commit wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine. Kapustin is scheduled to appear before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court this afternoon.

U.S. Attorney Paul J. Fishman credited the FBI, under the direction of Special Agent in Charge Timothy Gallagher, for the investigation. The case is being handled by Senior Litigation Counsel V. Grady O’Malley of the Organized Crime/Gangs Unit. As with all federal charges, Kapustin is presumed innocent unless proven guilty in a court of law.