6 ms·

There was a whole lot of fraud going on between Carvana (public) and DriveTime (private). It'll come out in due course.

by meta2023 4y ago

smt88 4y ago
Can you explain the nature of the fraud and how it benefited each company?
- jcampbell1 4y ago
  Drivetime is a privately held subprime used dealer group that lists their inventory on Carvana, which is a public spinoff of Drivetime. The CEO of Carvana is the son of the Drivetime owner. Plenty of room to launder profits via wholesale prices.
  - djbusby 4y ago
    This seems like wild speculation.
    - MrMan 4y ago
      It’s probably dead accurate, let’s find out
    - encryptluks2 4y ago
      There was people saying the same thing about similar comments regarding Theranos once.
    - geeky4qwerty 4y ago
      In October 1990, García, then a Tucson-based real estate developer pleaded guilty to a felony bank fraud charge for his role as a straw borrower in the collapse of Charles Keating's Lincoln Savings and Loan Association.[4][5] Garcia "fraudulently obtained a $30-million line of credit in a series of transactions that also helped Lincoln hide its ownership in risky desert Arizona land from regulators."[4] Garcia spent three years on probation, and he and his firm filed for bankruptcy.[5] In 1991, García bought Ugly Duckling, a bankrupt rent-a-car franchise, for under $1 million and merged it with his own fledgling finance company, and turned it into a company selling and financing used cars for sub-prime buyers with poor credit history.[5] Garcia took the company public on the NASDAQ exchange in 1996, trading under the ticker "UGLY".[6] In 1999, Garcia was involved in six lawsuits alleging he had "abused his position to profit" from a real estate deal where he ultimately acquired 17 company properties at a 10% discount.[5] In 2002, Garcia and the former Ugly Duckling CEO, Gregory Sullivan, took the company private and renamed it DriveTime.[7] https://en.m.wikipedia.org/wiki/Ernest_Garcia_II https://en.m.wikipedia.org/wiki/Ernest_Garcia_II
- meta2023 4y ago
  It didn’t benefit Drivetime at all, but father & son more than made up for it by selling off CVNA as it rallied to $370 last year. Give it a year or two, it’ll all come out.
jsemrau 4y ago
This well researched article maybe assists here. https://seekingalpha.com/instablog/767332-clastic/5627003-carvana-loses-money-on-every-used-car-sold-related-parties-make-money-on-every-car-carvana https://seekingalpha.com/instablog/767332-clastic/5627003-ca...

There was a whole lot of fraud going on between Carvana (public) and DriveTime (private). It'll come out in due course.

smt88 4y ago

Can you explain the nature of the fraud and how it benefited each company?

jcampbell1 4y ago
Drivetime is a privately held subprime used dealer group that lists their inventory on Carvana, which is a public spinoff of Drivetime. The CEO of Carvana is the son of the Drivetime owner. Plenty of room to launder profits via wholesale prices.
- djbusby 4y ago
  This seems like wild speculation.
  - MrMan 4y ago
    It’s probably dead accurate, let’s find out
  - encryptluks2 4y ago
    There was people saying the same thing about similar comments regarding Theranos once.
  - geeky4qwerty 4y ago
    In October 1990, García, then a Tucson-based real estate developer pleaded guilty to a felony bank fraud charge for his role as a straw borrower in the collapse of Charles Keating's Lincoln Savings and Loan Association.[4][5] Garcia "fraudulently obtained a $30-million line of credit in a series of transactions that also helped Lincoln hide its ownership in risky desert Arizona land from regulators."[4] Garcia spent three years on probation, and he and his firm filed for bankruptcy.[5] In 1991, García bought Ugly Duckling, a bankrupt rent-a-car franchise, for under $1 million and merged it with his own fledgling finance company, and turned it into a company selling and financing used cars for sub-prime buyers with poor credit history.[5] Garcia took the company public on the NASDAQ exchange in 1996, trading under the ticker "UGLY".[6] In 1999, Garcia was involved in six lawsuits alleging he had "abused his position to profit" from a real estate deal where he ultimately acquired 17 company properties at a 10% discount.[5] In 2002, Garcia and the former Ugly Duckling CEO, Gregory Sullivan, took the company private and renamed it DriveTime.[7] https://en.m.wikipedia.org/wiki/Ernest_Garcia_II https://en.m.wikipedia.org/wiki/Ernest_Garcia_II
meta2023 4y ago
It didn’t benefit Drivetime at all, but father & son more than made up for it by selling off CVNA as it rallied to $370 last year. Give it a year or two, it’ll all come out.

jsemrau 4y ago

This well researched article maybe assists here. https://seekingalpha.com/instablog/767332-clastic/5627003-carvana-loses-money-on-every-used-car-sold-related-parties-make-money-on-every-car-carvana https://seekingalpha.com/instablog/767332-clastic/5627003-ca...