Jaguar Cars Inc Case Summary

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This appeal arises out of a civil RICO action, 18 U.S.C.A. § 1961 et seq. (1984), brought by plaintiff, Jaguar Cars, Inc. ("Jaguar"), against Theodore Forhecz, Sr., and his sons Theodore Forhecz, Jr. and Mark Forhecz, alleging that they had perpetrated a scheme to systematically submit fraudulent warranty claims to Jaguar through their jointly owned Jaguar dealership, Royal Oaks Motor Car Company, Inc. ("Royal Oaks") in violation of RICO sections 1962(c) and (d). A jury awarded Jaguar damages of $550,000 against Theodore Forhecz, Sr. ("Theodore, Sr.") and $450,000 against Mark Forhecz ("Mark").[1] In its final judgment, the district court molded the verdict to reflect treble damages for the RICO violations, as required by 18 U.S.C.A. § 1964(c)…show more content…
Under this scheme, warranty claims were continuously submitted to Jaguar for the cost of labor and parts for alleged repairs that were either unnecessary, were never actually performed, or were performed on cars that were no longer under warranty. The scheme included submitting fictitious timesheets, doctoring the warranty paperwork submitted to Jaguar, and altering new parts to make them look old and in need of replacement. Additionally, an outside sublet paint-and-body shop, Kolorworks, and its owner, Linda Kucharski, assisted the defendants by helping them construct fraudulent warranty claims for Royal Oaks to submit to Jaguar. In total, Royal Oaks defrauded Jaguar in an amount of between one and two million dollars,[2] enabling Royal Oaks to generate hundreds of thousands of dollars of warranty income per month and to maintain extremely lucrative salaries for the defendants through periods of declining sales income even though its work bays were often empty and its technicians idle. The evidence presented at trial demonstrated that actual work had declined to a point where there were few, if any, cars in the service…show more content…
In order to avoid detection, the defendants placed a load of new cars in the service areas for mock repairs, so that the area looked full and technicians were kept busy while Jaguar's representatives were at the dealership. Such actions along with other modifications and refinements to 262*262 the fraudulent scheme allowed the fraud to continue until May of 1991. After discovering the fraud and terminating the dealership in May of 1991, Jaguar brought suit in the District Court for the District of New Jersey alleging violations of RICO sections 1962(c) and (d). Section 1962(d) prohibits conspiring to violate subsection (c). 18 U.S.C.A. § 1962(d) (West Supp.1994). Accordingly, the viability of Jaguar's section (d) claim depends on the legal sufficiency of its § 1962(c) claim. As noted above, the jury awarded damages against Theodore, Sr. and Mark on Jaguar's RICO claims. The district court upheld the jury's award in response to the defendants' post-trial motions for judgment as a matter of law under Fed.R.Civ.Proc. 50(a) or for a new trial under Fed.R.Civ.Proc. 59. This appeal from the judgment and from the district court's order denying the defendants' post-trial motions followed.

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