Former Fredericton used car dealers have pleaded guilty to defrauding customers
Former managers of a defunct Fredericton used car dealership have pleaded guilty to several fraud charges in connection with an auto trade and sales that left customers on the hook with third-party creditors for tens of thousands of dollars.
Peter Kennedy, a former director of W&P Auto Sales, pleaded guilty in New Brunswick’s Court of King’s Bench on Tuesday to 12 counts of fraud exceeding $5,000 and two counts of fraud not exceeding $5,000.
Kennedy appeared in court in person, alongside his accomplice William Cornford, who pleaded guilty to two counts of fraud over $5,000.
The two, who were not in custody, were allowed to remain under a release order awaiting their sentencing, which was scheduled for February 1, 2024.
The crimes occurred more than a year ago
Tuesday was supposed to be the first day of the men’s trial before Judge Thomas Christie.
However, at the beginning of the proceedings, Christie revealed that prosecutors and defense attorneys had agreed to a statement of facts, and both men were willing to plead guilty.
Christie first convicted Kennedy, and began reading all the charges against him, all of which related to things that happened at the Riverside Drive dealership between April 2018 and May 2019.
Crown Prosecutor James McConnell then read a statement of facts to which the Crown and Kennedy agreed.
According to the statement, it was common among W&P Auto customers to trade in their previous vehicles when purchasing the car from the agency, so that the value of the car being traded was deducted from the purchase price.
In each case of fraud, Kennedy advised the customer that W&P Auto would pay off the remaining loan on his trade-in vehicle, when he knew the company would not do so, or he was “blind or willfully reckless with respect to that fact.”
In one case, agent Michelle Macaulay traded in a 2014 Hyundai Accent worth $5,000 for a 2012 Dodge Ram worth $23,800.
Kennedy told MacAulay that her existing loan of $15,500 with EdenPark on the Hyundai would be paid off.
After the sale, Kennedy sent Macaulay biweekly payments to cover her loan payments, but stopped doing so in July 2019.
The following month, EdenPark wrote to MacAulay saying its loan to Hyundai had an outstanding balance of $14,458.88.
However, in March 2019, W&P Auto sold the Hyundai to Roxie Palmer for $12,000 without Kennedy disclosing to her the lien owed to EdenPark.
Due to the lien, EdenPark repossessed the Hyundai from Palmer on September 4, 2019.
The statement of facts does not say whether Palmer was ever compensated for the money she paid W&P Auto for the Hyundai.
Other cases detail similar fraudulent acts involving other customers, with some losing their cars and others taking major hits to their credit scores.
Cornford defrauded his brother
After Kennedy’s conviction, Christie moved to Cornford, who sat next to Kennedy in the defendants’ box.
Christie asked McConnell to read the agreed-upon statement of facts, which revealed that W&P Auto was experiencing “significant cash flow issues” in August 2019, and Cornford relied on personal resources to help maintain the company’s liquidity.
According to the statement of facts, Cornford took out a second mortgage on his home and took out personal loans from friends and family.
“Cornford took no steps to halt or slow W&P’s operations despite his awareness of the cash flow issues,” the statement read.
“He continued to operate the business in the hope that it would recover without considering that continued operations might put customers’ property at risk.”
One of the two charges Cornford faced stemmed from a quid pro quo that ultimately led to him defrauding his brother.
On October 10, 2017, Charlie and Nancy Cornford traded in a 2007 Chevrolet Silverado worth $8,000 for a 2015 Ford F150 Lariat worth $38,500.
In April 2019, William Cornford obtained a loan for a Ford truck in the amount of $52,087.07 from Zag Bank using an old copy of the truck’s registration, which showed he was its owner.
The loan led to his brother’s truck being impounded.
“Mr. W. Cornford acknowledges that he signed the documents that gave rise to a lien against his brother and sister-in-law Lariat,” the statement read.
“Mr. W. Cornford states that these documents were presented to him, and that he signed them without considering the details; however, he acknowledges that by failing to properly review these documents he either deliberately blinded himself or recklessly placed his brother and his parents’ sister-in-law’s property at risk.” “
On January 12, Zag Bank repossessed the truck as a result of William Cornford’s non-payment of his outstanding loan.
Five of the charges Kennedy faced were jointly brought against Cornford as well.
McConnell told Christie that those charges were suspended without pleas, with the intention of withdrawing them or withdrawing them at sentencing.
Another fraud charge that Kennedy originally faced was also postponed, with a plan to withdraw it later, McConnell said.
While the two will not be in custody awaiting sentencing, they are under an order not to contact any of their victims.
The conviction of the two men comes after they successfully applied for another batch of fraud and theft charges against them.
The 25 charges against the two men related to business entities they allegedly defrauded. Due to the excessive length of time it took for them to reach trial, King’s Court judge Terence Morrison granted a stay, effectively halting any proceedings permanently.