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Thursday, June 22, 2006 - Page updated at 12:00 AM

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Police investigate fraud allegations against dealership

Times consumer-affairs Reporter

A high-end car dealership in Seattle is under investigation by Seattle police and the state Department of Licensing for allegedly defrauding buyers and sellers of luxury cars, leaving some stuck with a big bill and no car.

In April, Scott Hensrude of Woodinville took out a loan for $88,496 to buy the car of his dreams, a red 1998 Ferrari, from Auto Gallery of Seattle.

The Belltown dealership specializes in consignment sales of used luxury vehicles.

Police notified Hensrude this week that the car had been reported stolen and he would have to release it to its owner. The previous owner had not been paid by Auto Gallery owner Tyson Spring, and Hensrude had never received the title.

"Now I have no car ... and I have to pay the Boeing credit union $1,500 a month for the next six years for nothing," Hensrude said.

Several criminal investigations are open against Auto Gallery, spokesman Sean Whitcomb said.

At least three victims contacted police with stories similar to Hensrude's. Detectives are investigating a variety of potential criminal charges against the dealership, Whitcomb said.

In one case, the owner of a BMW sold on consignment reported that a $44,409 check from Auto Gallery had bounced, Whitcomb said.

Calls to the dealership Wednesday were not answered.

The state Department of Licensing also is investigating the dealership.

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Twenty-one complaints have been filed against Auto Gallery, 14 of them in the past two months, spokesman Brad Benfield said. Most complaints are about problems with title transfers or consignment agreements, Benfield said.

Last week, Spring turned in his dealer's license and the dealer license plates and suspended operations, Benfield said.

The department has been working with Spring in its investigation.

Spring was profiled in a Puget Sound Business Journal story last fall in which he said he expected his 3-year-old dealership to have sales of more than $5 million this year. He said he had sold a $190,000 Lamborghini and shipped a Rolls-Royce to South Africa.

In the article, Spring said he handled all sales personally and provided one-on-one customer care.

"I'm a low-volume, high-margin guy," Spring said. "I don't do Hondas and Toyotas. I can sell 20 cars and still have a good month."

Jolayne Houtz: 206-464-3122 or jhoutz@seattletimes.com

Copyright © 2006 The Seattle Times Company

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