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Indy towing operator charged with defrauding car owners in massive scheme

May 17, 2019

The owner of an Indianapolis towing company has been indicted for running what prosecutors describe as a “title-washing scheme,” in which he targeted financially distressed car owners, took possession of their vehicles, charged huge towing and storage fees and then resold them.

The U.S. Department of Justice said Friday that a federal grand jury indicted Brian Fenner, 44, of Indianapolis, and a partner, Dennis Birkley, 59, of Wisconsin, with conspiracy to commit mail, wire and bank fraud.

The two men were arrested by the FBI and Indiana State Police. Birkley’s company, AMI Asset Management, was also charged in the indictment.

The indictment alleges that between 2013 and 2016, Fenner found numerous people around the country who had declared bankruptcy and were behind in their vehicle loans. He promised to pay their bankruptcy attorneys’ fees if they surrendered their vehicles to him and allowed him to tow the vehicles to his impound lot near the White River, about 10 minutes south of downtown.

Fenner sometimes charged up to $4,000 to tow and store the vehicle. “Many vehicle owners understood that they would not have to pay the fees, while others were unaware of the fees at all,” the indictment said.

After the vehicles arrived at Fenner’s lot, he began taking steps to attach a lien to the vehicle’s title for nonpayment of the fees.

What the vehicle owners and the banks didn’t realize, prosecutors say, was that Fenner had allegedly agreed with Birkley to exploit Indiana’s mechanic’s lien law to strip the vehicle titles of the banks’ liens.

The mechanic’s lien law is designed to protect mechanics and related business owners from customers who don’t pay their bills. If the customer doesn’t pay within 30 days, the company can sell the vehicle at a public auction. The law is intended to allow the mechanic to recoup legitimate fees, and then pass excess money from the auction to other lienholders, such as banks, and then to the vehicle’s owner.

In Fenner’s case, however, there were no genuine auctions. Fenner arranged that Birkley’s company would “win” at a sham auction proceeding, and the vehicles would be shipped to the AMI lot in Wisconsin, the indictment said.

Under the arrangement, Birkley and AMI would pay the exact amount of Fenner’s mechanic’s lien, which was equal to the amount of Fenner's high towing and storage fees, prosecutors said. Therefore, there was no surplus, and nothing left to pay the banks or the original vehicle owners. As a result, Birkley received the vehicles with titles clear of bank liens.

The move left the car owners with the debt but no collateral to return to the bank, the indictment said. Afterward, Birkley resold the vehicles, sometimes at a real public auction, and often received thousands of dollars in profit, which he split with Fenner.

Fenner, a former repo man, has been sued more than a dozen times in Marion and Hendricks county courts, with lenders demanding he give back dozens of cars worth hundreds of thousands of dollars. Fenner operated Sperro Towing and Recovery, which operating a lot on an industrial stretch of Bluff Road, south of Raymond Street. That company was not named in the indictment.

Fenner and Birkley each face up to 20 years in prison, prosecutors say. Attorneys for the two men declined to comment on Friday afternoon.

 

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