Indictment of auto broker reveals a 'major problem' Maryland attorney general warns of illegal auto sublease agreements.

November 19, 1991|By Norris P. West | Norris P. West,Evening Sun Staff

Chris and Marty Leslie have found that it's not easy to unload a motor vehicle and the high monthly car payments.

In January 1990, the Maryland City couple answered an ad that offered to help people stuck with high payments and agreed to let a broker take over their 1989 Ford pickup truck and the $409 monthly note. A month later, they turned over their year-old van, too.

That December, the Leslies found themselves in an even deeper financial hole. Chris Leslie alleges that the broker, A & A Auto Rental and Leasing, had bounced payment checks to the lender and then refused to return their autos to them. She said she and her husband got the van back after threatening legal action for alleged insurance violations and found the pickup after a long search.

The practice of arranging to sublease an automobile while there's an existing contract between an owner and lender, as A & A Auto allegedly did, is illegal under a 1990 law, says Maryland Attorney General J. Joseph Curran Jr.

Curran yesterday announced the arrest of Peter M. Stiltz, owner of A & A Auto, who has been charged with the theft of 130 motor fTC vehicles and three boats and 25 counts of violating the state's subleasing law.

Stiltz was named recently in a sealed indictment by a Baltimore County grand jury, Curran said.

Stiltz, 49, of the 8700 block of Carriage Hill Drive in Columbia, was arrested at his home yesterday by State Police and was being held last night at the Baltimore County Detention Center on $50,000 bail.

Curran said the arrest concluded a seven-month investigation by his office and was the first arrest under the 1990 state law, which prohibits obtaining a vehicle from a lien holder and subleasing it to another person.

Curran said his office is involved in at least two similar investigations. Other officials said some local state's attorney offices also are probing illegal subleasing businesses.

"This is essentially a type of problem that exists when times are tough," Curran said. "The classic scenario is when a borrower falls on hard times and can't make the payments, and another individual with poor credit can't borrow money to buy a car. You're putting together two people who have money problems."

He said the lessee ends up paying for a car that he will never own. Often, he said, that person cannot make the payments and the owner's credit rating suffers because the subleasing company does not pay the lender.

"That is why we're so concerned that consumers are being hurt, banks are being hurt, insurance companies are hurt, and it causes problems for the Motor Vehicle Administration," Curran said. "It's just a lose, lose situation all the way around."

He said the charges of theft of 130 autos and three boats against Stiltz stem from the company's allegedly arranging to sublease the properties when there were existing contracts between the owners and lenders.

If convicted, Stiltz could face a maximum prison term of 15 years on each theft charge and three years on the subleasing charges.

Curran said the practice slipped through the cracks of justice until the 1990 state law because there was no licensure requirement for auto brokers as there is for dealers.

"The MVA reports to us that this is a major, major problem that has affected far more than the 130 people involved in this indictment," he said. "What we're trying to do is warn consumers that you can't simply sublease your car and get out of debt. For one thing, that's a violation of the sales agreement. The better practice would be to go back to the bank and negotiate a forgiveness period."

Anyone who has had business dealings with Stiltz is asked to call the attorney general's office at 576-6391.

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