The two owners of a Western New York auto loan brokerage company have been sentenced to time behind bars for stealing a total of nearly $300,000 from 150 consumers, New York Attorney General Andrew M. Cuomo announced. The two operated a scam in which they sold non-existent extended warranties and wrongfully took consumers auto loan payments from a bank.
Through the Attorney Generals actions, consumers ripped off by Matthew Hunter and John Pazamickas, operating as Hunter-Paz Funding Services, LLC, a/k/a HP Funding, have received full reimbursement valued at nearly $300,000. The money was primarily provided by warranty companies and Key Bank, which were unknowingly used by the pair in their scheme to defraud customers.
Hunter, 35, of Buffalo, was sentenced to 1-3 years in prison and Pazamickas, 54, of Youngstown, was sentenced to 90 days in jail with 5 years of probation by New York State Supreme Court Justice Penny M. Wolfgang in Buffalo. Both pleaded guilty in January to Grand Larceny in the 2nd Degree. Hunter also pleaded guilty to Scheme to Defraud in the 1st Degree and Pazamickas also pleaded guilty to Grand Larceny in the 3rd Degree.
This business played a shell game with money that was not theirs, leaving customers who thought they had valid warranties without coverage, said Attorney General Cuomo. The pair also defrauded unsuspecting warranty companies and banks by selling their services with no intention of actually paying for them. These con artists are now being locked up and consumers who were ripped off are getting their money back.
Hunter and Pazamickas offered to arrange new loans with better terms for consumers with existing auto loans. When the defendants arranged for new loans, they convinced clients to purchase extended service warranties for their vehicles and added the cost to the new loans. However, they never sent the warranty payments to the companies with which Hunter-Paz had contracted.
From September 2006 to November 2007, Hunter-Paz received approximately $300,000 from consumers. Hunter-Paz was supposed to pay the warranty companies approximately $160,000 (the remaining amounts were sales commissions). Instead, in most cases Hunter and Pazamickas never forwarded the payments. When consumers contacted the warranty companies for services or a refund, they learned that they actually had no coverage.
In January 2007, Hunter-Paz arranged for a new loan with Key Bank that a consumer wanted to use to pay off an outstanding loan with M&T Bank. Key Bank wired Hunter and Pazamickas $56,000 to pay off the M&T loan, but the pair never paid it off. Similarly, in April 2007, Hunter-Paz stole another $57,000 that Key Bank wired to pay off a consumers RV loan.
Recognizing that consumers should not bear the losses resulting from Hunters and Pazamickas theft, Attorney General Cuomos Office reached an agreement with Key Bank and several warranty companies to make all affected consumers whole, even though these companies played no role in the thefts. The companies also agreed to service all Hunter-Paz contracts and provide refunds to consumers who decide to cancel their warranties. Key Bank agreed to write off the two affected consumers loans and return any payments they made to the bank prior to the agreement.
Attorney General Cuomo thanked Key Bank and the warranty companies for agreeing to protect the consumers who were victims of this fraud. As part of the sentences at Attorney General Cuomos request, the court ordered Hunter and Pazamickas to make full restitution to the warranty companies and Key Bank.