MOSCOW, October 2 (RAPSI) - A group of Russian and Kazakh citizens have banded together to tackle an alleged car fraud scheme through the US courts, according to court documents obtained by RAPSI.

Nine Russian and two Kazakh citizens alleged in a motion to intervene in an underlying case that they had fallen victim to a fraudulent scheme devised by defendants – three New Jersey based car companies that allegedly target foreign nationals, and their owners.

The companies include G Auto Sales, Inc., Global Auto, Inc., and Effect Auto Sales, Inc. (the companies). The individuals include Sergey Kapustin, Irina Kapustin, and Michael Goloverya, among others. The Kapustins are a married couple and Goloverya is Irina’s son from a prior marriage, according to the court documents. The family – collectively referred to as the Kapustins – is described in the document as a family of expatriates.  The motion claims that the Kapustins and Goloverya each serve as president of one of the companies.

The underlying case was launched by the companies against Michael Hitrinov and his shipping company, Empire United Lines, among others. Hitrinov – according to the underlying complaint – is the “president and/or Chief Operating Officer” of Empire United Lines Co., a company in the business of transporting automobiles overseas. The companies contracted with Empire to have vehicles shipped from the US to Finland’s Port of Kotka, the underlying complaint goes on to assert. The companies alleged that the defendant unlawfully converted automobiles belonging to them and their clients, and moved for injunctive relief “in the form of an order compelling the defendants to immediately release automobiles owned by [the companies] and unlawfully held hostage by the defendants.”

The intervenors claim: “The Kapustins’ beautifully-designed websites advertise cars for sale specifically targeting their former compatriots back in the USSR. The Kapustins offer cars for sale just below the market value.” The underlying complaint describes the companies as being, “in the business of exporting new and used cars from the United States to Europe.”

“The buyers, who think they are getting a good deal from a reputable dealer, wire the money. The Kapustins then encounter inexplicable delays in delivery… Months later, the Kapustins then offer the buyer a different, often an inferior car, for just a few thousand more… buyers—by then desperate to get anything at all out of this deal—wire additional money,” the motion to intervene goes on to assert.

An amended memo in support of the motion to intervene adds: “In the end, most buyers receive no vehicles at all, nor do they get their money back. A few receive flooded or salvaged vehicles that were sold as ‘new’ or in ‘good condition.’”

Furthermore, the complaint alleges that the Kapustins have fought aggressively to prevent victims from coming forward and to discourage attorneys from pursuing justice for their clients. Specifically, it is alleged in the complaint that former customers airing their frustrations via online forums have been subjected to threats of prosecution for defamation “to the fullest extent of the law.”

Attorney for the intervenors Anna Brown told RAPSI Monday that the defendants had emailed defamatory information about her to her clients.  Her co-counsel Nadia Wood was similarly attacked in the forums for Kapustin’s customers with false accusations that she is not an attorney, necessitating a separate lawsuit. Wood won a preliminary injunction against the Kapustins, redirecting these infringing and defamatory websites back to her professional website.

Both Brown and Wood have previously represented clients in a number of high-profile federal criminal defense and civil fraud cases. Wood’s practice focuses on appellate work as well as complex business litigation. Brown represented Konstantin Yaroshenko and worked on the case of former Ukrainian prime minister Pavlo Lazarenko representing crime victims.

The motion to intervene was filed on June 28 on behalf of the group of Russian and Kazakh nationals that have allegedly been wronged by the defendants while endeavoring to purchase cars in 2012 and 2013.

The intervenors are presently awaiting an order that may permit them to move forward as a third party to the case. Their motion advanced 16 counts under theories, including libel, fraud, breach of contract, and violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, which aims to eradicate organized crime. If they succeed, the award would potentially result in a multimillion dollar judgment.

When asked for a comment on the motion to intervene, an attorney for Global Auto described it as lacking in “both factual substantiation and a legal basis for proceeding before the court.”

The attorney added that a police investigation has been launched in Finland amid efforts to locate the vehicles that were, he alleges, “willfully converted for his own purposes and financial gain the vehicles belonging to the Kapustins’ clients and to date has refused to render an accounting to us or to the court.”

The attorney went on to detail the cases of eight Global Auto customers included among the intervenors, explaining where the contexted vehicles were. In five of the eight cases, the vehicles were described as having been “under the custody and control of Mikhail Hitrinov and CarCont since… arrival in Katko.” A sixth customer’s vehicle was allegedly never shipped to Finland, instead remaining in Empire’s New Jersey warehouse. A seventh intervenor allegedly cancelled his purchase. The eighth was allegedly offered a refund after his car was not procured at auction due – according to the Global Auto attorney – to a delay in the transfer of funds. The attorney noted that this eighth intervenor – the same Igor Glazunov mentioned above – was offered a full refund via wire transfer to his account in Russia, an offer refused by his attorney.