Last month, we talked about some of the scams that had been pulled in the Ferrari world. But you haven't heard the most outrageous.
It was in 1968 that our uncle instituted new rules, requiring certain safety and anti-pollution features on all cars sold for US use. So it came to pass that a "grey market" developed for post-1968 European cars. At first, it was relatively simple to import, say, a 1970 Mercedes, bring it up to US specs, and sell it at a substantial profit, but still less than the price of a similar model made for US consumption by the factory.
One poor individual, in the early 80's, had been buying 500 SEC's from Europe for $29,000.00, changing a few things such as bumpers, lights, and smog equipment, and selling them for a handsome profit, but still far less than the $50,000.00 asked by US Mercedes dealers. Everything had been rolling along just fine, when he got a message from his European supplier that there was a substantial collection of cars, including some Ferraris, for sale at a very good price, and "he better jump on it". Our victim scrounged around among all his friends, bankers, and family, and raised the $600,000.00 required to swing the deal.
You guessed it. That was the last he heard of his European contact or his money. The last we heard, even Interpol had not located the culprit.
It was around 1980 that a "gold chainer" burst on the local Ferrari scene with his 308. He immediately became active in the Ferrari Owner's Club, even to the extent of becoming the escort of our charming executive secretary. Then, he had the misfortune to fall off the road in his 308, inflicting serious but not fatal injuries to the car. The car was sent to one of the local dealers (who shall remain nameless, for reasons that you'll see) for repairs.
As the repairs were completed, one of the employees of the dealership took the car out for a "test drive". It's not clear whether the driver was testing the car's limits or his own, but, however it happened, the car fell off the road again!
Discouragement was only one of many emotions felt by the owner. Sure, the dealership fixed the car, but now he owned a car that had already been crashed twice, and it was only a few months old! He didn't really want to keep that car. And, we were just coming into an era when "disclosure" was becoming popular, and he felt that in order to sell the car, he would have to disclose that it had been crashed twice. What to do? What to do?
The answer will be obvious to you, when I tell you that he then reported to his insurance company that the car had been "stolen"! Well, insurance company adjusters are not stupid. So the insurance company quietly contacted all the local Ferrari shops, and when they hit Joe Crevier's shop in Orange County, it was Bingo time. Yes, Joe responded, I have the car here, with a work order to disassemble it! The insurance company investigator hot-footed it down to Orange County, and sure enough, Joe had a work order to disassemble the 308. And it was signed by the owner!
That was the last we saw of the gold chainer.
We have talked about individuals as victims, and insurance companies as victims. But with the craziness of the 80's, the biggest victim of all must have been the IRS! Try to follow along as I give you an example: In the 80's, "Rich" had completed a show restoration of a beautiful and rare Ferrari. While the car was in restoration, its value appreciated to the point where, upon completion, it was worth close to $l,000,000.00. In fact, Rich had the car parked at the restoration shop with the appraisal (for insurance) taped to the windshield for all to see. When it came time to sell, Rich mentioned the car to John, a collector and broker with international connections.
John was clever enough to sign Rich up on a brokerage agreement, whereby Rich was to receive hi