The owners of Auto Palace, a Woodside-based used car dealership, have been charged by the Queens District Attorney’s office on multiple counts of tax fraud.
The district attorney has also indicted the car dealership’s former finance manager Julio Estrada (a/k/a Jay Torres) on charges that he defrauded 23 car buyers out of a more than $115,000 in cash.
Hooshmand Kohanano (Danny) and his wife, Fereshteh Kohanano (Jenny), allegedly failed to pay more than $728,000 in state and local sales taxes, according to the criminal complaint. The couple, who live in Great Neck, face up to 25 years in prison on multiple counts of grand larceny, falsifying business records and criminal tax fraud.
According to the complaint, Auto Palace, located at 53-21 Northern Boulevard, reported to the state tax department that it had made $4.6 million in sales between September 2006 and November 30, 2009—resulting in a $389,000 tax bill that it paid.
However, following a court-authorized search of the premises, the complaint alleges that Auto Palace generated $13.5 million in sales and had a tax liability of $1,118,000.
Several phone calls to the dealership, which is graded an F by the Better Business Bureau, went unanswered. The company has been subject to a lot of online criticism from consumers over its sales practices.
Meanwhile, the complaint alleges that Julio Estrada, the former finance manager who lives in New Jersey, duped many buyers into financing their purchases. To entice customers to buy a vehicle, the complaint said that he promised customers that after six months of on-time payments they could come back and see him at the dealership and refinance their loans at a better rate and thus lower their monthly payment by hundreds of dollars.
However, when customers returned to Auto Palace and met with Estrada months later, he would tell them that there was a “fee” or “down payment” – ranging from $1,000 to as much as $13,000 – that they had to pay in cash in order to refinance their loan, the complaint alleges.
Estrada took a total of more than $115,000 in cash from 23 car buyers and never refinanced their loans, according to the complaint. When the car buyers realized that their original loan payments were still due and contacted their original lenders, they were told that the loans were still in full effect and the loans had not been refinanced.
In some cases, the loans went into default because Estrada had allegedly told them to stop paying their loans because the refinanced loans would be going into effect.
Estrada is presently awaiting arraignment in Queens Supreme Court on a 95-count indictment. He faces up to 7 years in prison.