Feds Seek Dismissal in Lamborghini Fraud Case

Federal prosecutors have moved to dismiss a wire fraud case against a Laguna Hills man who owned two Lamborghini dealerships that counted celebrities such as Los Angeles Lakers star Kobe Bryant among customers.

Viken Keuylian, 48, pleaded guilty in May 2009 to one count of wire fraud related to the sale of a 2006 Bentley, according to court records. U.S. District Judge Cormac Carney agreed July 2 to let Keuylian withdraw his guilty plea. A trial had been scheduled for Tuesday.

Prosecutors on Thursday filed a one-page motion asking Carney to dismiss the
case "in the interests of justice."

Keuylian asked Carney to let him out of his earlier agreement with
prosecutors based on claims that he did not know the maximum punishment was 20 years and not 30 years in prison and because of new evidence that he believed exonerated him.

Keuylian's attorney, Craig Wilke, argued in the July hearing that his
client felt extra pressure to admit wrongdoing because he thought he faced up
to 30 years in federal prison.

However, Keuylian actually faced up to 20 years in federal prison
because the victim in the case -- Volkswagen Credit Inc. -- was the financing
arm of the parent company of Lamborghini, and not a bank, which is federally
insured, and provides more than just car loans, Wilke said.

Assistant U.S. Attorney Mieke Biesheuvel argued that Keuylian should not
be allowed to withdraw his plea because he would expect to face less time
behind bars than he previously thought. Biesheuvel also relied on various prior
court rulings to try to make her case.

Complicating the case was the original FBI agent who investigated Keuylian -- Peter Norell -- pleaded guilty to a misdemeanor unrelated to Keuylian.

Wilke said a myriad of new evidence surfaced after Keuylian's guilty plea from the various civil litigation prompted by the failure of the defendant's business.

Carney said it wouldn't make sense to make Keuylian stick to his
agreement when it could be overturned on appeal.

"Even more troubling to me is Mr. Keuylian and the public viewing what
happened to him was unfair,'' Carney said in the July hearing. "I would hope
that people would feel like they had their day in court. That's important to
me.''

Keuylian became financially overextended and unable to meet his debt
obligations related to his various holdings, which included a vineyard, a
commercial building on Pacific Coast Highway in Newport Beach and his Lotus
dealership in Beverly Hills, federal prosecutors alleged.

To meet the obligations, Keuylian began selling cars in which VCI had a
security interest, and instead of paying back VCI, he used the money to pay for
his other obligations, prosecutors alleged.

VCI was told that the vehicles in which it had a security interest were
still sitting on the lot, prosecutors alleged.

In October 2008, Keuylian sold at least 54 cars, that included several
Bentleys and other high-end vehicles, for less than he owed VCI, prosecutors
alleged. For those 54 cars, VCI had lent Keuylian $12.5 million, but he
received $8.1 million from the sales, prosecutors alleged.

Keuylian paid some money to VCI for cars sold previously, but none of
the proceeds were used to pay back VCI for the money it had loaned on the 54
cars, prosecutors alleged.

The FBI seized 13 Lamborghinis and an Audi that Keuylian had sold.
Wilke said the new evidence indicates that Volkswagen and VCI executives
were aware Keuylian was discounting the expensive cars as the economy nose
dived and they allowed him to do so in order to help him open up two new
"flashy'' dealerships in Calabasas and Newport Beach on Pacific Coast Highway
across from a Ferrari dealer.

Keuylian acknowledged in his guilty plea that he deceived some auditors
who visited his lot monthly that some cars remained unsold when they were
actually sold, Wilke said.

"But he contended all along that the factory knew all along and was
involved in it,'' Wilke said after the hearing. "And he assumed VCI knew about
it as well.''

The Volkswagen and VCI executives overlooked it to help keep Keuylian's
business afloat, Wilke said.

When the economy tanked and sales slowed, Keuylian was made the
scapegoat, Wilke said. "The reality was the market tanked,'' Wilke said.

Keuylian also disputed the assertion that the 54 cars he sold in October
2008 were sold well below market value, Wilke said. "It was less than the invoice, but not at a loss,'' Wilke said. "He was trying to pay off debt and most of it went to VCI.''

Keuylian fell behind on his debt as he tried to establish the Calabasas
and Newport Beach dealers, which he was pressured into opening by the company to compete with Ferrari, Wilke said.

--City News Service