ST. GEORGE — Last week, a defendant and former business owner was sentenced in a case filed in 2021 after a state investigator received multiple complaints alleging a fraud scheme that bilked car dealerships, lenders and consumers out of nearly $2 million.
The defendant, 47-year-old David L. Donleavy, of Ivins, appeared in 5th District Court for sentencing on Nov. 16 on two second-degree felony counts of theft and one third-degree felony count of equity skimming of a vehicle.
The charges relate to either taking in a vehicle for trade-in that has a loan or lien and then failing to pay off the lean or failing to tell the buyer of a financial obligation attached to the car.
He was also sentenced on two misdemeanor charges for failure to deliver dealer title and dismantling dealer plates.
Donleavy originally faced 40 charges in total, including 10 second-degree felony charges — one count of communications fraud and nine counts of theft.
He also faced five third-degree felony counts of equity skimming of a vehicle, along with 25 misdemeanor charges — 18 counts of failure to deliver dealer title, as well as two counts of dismantling dealer plates, three counts of failing to pay warranty or service contract and two counts of failure to pay off lien on motor vehicle trade-in.
During a hearing held in December of last year, the defendant pleaded “no contest” to the five counts, while the remaining charges were dismissed.
Utah State Tax Commission investigation
The charges stem from an investigation initiated by the Motor Vehicle Enforcement Division of the Utah State Tax Commission on Dec. 15, 2020, when an investigator assigned to work in Washington County was tasked with reviewing several complaints totaling more than $1.7 million in losses filed against Elite Auto Credit in St. George.
The first complaint was filed in November 2019 from a dealership in St. George that had been contacted by Donleavy several months earlier about possibly wholesaling vehicles. The defendant explained he didn’t have time to go to auctions to purchase inventory and was hoping the dealership could supply him with cars to sell at his business, according to charging documents filed at the time.
The dealership was told that Elite was selling a high volume of vehicles and that the defendant would be paid a commission on every vehicle sent to Elite that was sold. Commission would be paid in payments sent every 30-45 days. Elite had sold nearly 60 of the dealership’s vehicles, but Donleavy refused to pay the fee for any of the vehicles sold, giving “many different excuses as to why he could not pay,” the report stated.
Prosecutor Lane Wood addresses court during sentencing of 47-year-old David L. Donleavy, who reportedly ran a car broker fraud scheme, during a hearing held in 5th District Court in St. George, Utah, Nov. 16, 2023 | Photo by Cody Blowers, St. George News
When the dealership was owed more than $800,000 from the vehicle sales, the dealership owner, who still had 20-30 cars on the Elite lot at the time, told Donleavy he would not provide the car lot with any further titles to the vehicles until the dealership was paid in full.
The defendant told the dealership he did not have any money left from the sale of the vehicles and said he used the money they made selling the vehicles to pay off debt.
The dealership owner decided to allow Elite to sell the cars that remained on their lot in the hopes that Donleavy would make good on his promise to pay them back. Donleavy ended up selling a total of 90 of the dealership’s vehicles, he paid nothing on the more than $1 million owed to the dealership for the cars brokered and sold.
The state motor vehicle division became involved after receiving several complaints from various lenders, banks and credit unions in St. George alleging that Elite failed to provide the titles to the vehicles that were financed by each of the lenders, as well as from consumers reporting that Donleavy never paid off the loans of the vehicles they used as trade-ins.
From there, $1 million in civil claims and judgements made their way through the courts, while the state motor vehicle investigation continued until February of 2021, when the criminal charges were filed and the suspect was arrested and booked into jail in Washington County.
Mistake or fraud
During the hearing held last week, Defense Attorney Randall Allen said that Donleavy’s business, a car dealership, went under and his client “made some mistakes,” adding that his client takes responsibility for his actions and was very sorry “to the people that got hurt.”
Donleavy, the defense attorney said, is committed to paying the victims back, and in fact, his client brought four checks to the hearing, including a $40,000 check, along with three $500 checks, totaling $41,500 that he was ready to turn over to the courts as a good faith gesture to his commitment to pay restitution.
District Judge John J. Walton, who presided over the hearing, asked how the defendant would be generating income to pay the restitution, which is when Allen said is client did have a job and was committed to paying at least $500 per month.
47-year-old David L. Donleavy, who reportedly ran a car broker fraud scheme, appears in 5th District Court with defense attorney Randall Allen for sentencing in St. George, Utah, Nov. 16, 2023 | Photo by Cody Blowers, St. George News
Walton said that amount “won’t pay the interest, I don’t think.”
Allen responded by saying Donleavy has been a successful businessman in the past and that his client is trying to figure out the means by which to pay the restitution.
Prosecutor Lane Wood said that state and the defense worked hard to put together stipulated sentencing terms — efforts that went on “for a long time,” he said.
The agreement stipulated that the maximum prison sentence on each of the counts be suspended in the case, and that instead, Donleavy would be placed on three years’ probation through Adult Probation and Parole and be ordered to complete 50 hours of community service in lieu of jail.
The restitution amount the state was asking for, the prosecutor said, was more than $603,600 that would be paid back to multiple victims in the case.
Donleavy said he has taken responsibility, and said he was sorry “it happened the way it happened,” and ended by saying he would pay the victims back in full.
One of the individuals affected also addressed the court and said the losses incurred by the defendant’s actions resulted in the closure of the victim’s business, the loss of their home and that he and his family “had to start completely over.”
He also said the process was “extremely difficult,” and was made even more difficult when it took more than three years for the case to be resolved and asked the court to consider those losses when rendering the sentence. He closed by saying:
“We 100% believe in the power of forgiveness. But we also believe in the power of justice.”
The judge opened by saying that it is not uncommon wherein a defendant with no prior criminal history engages in conduct where they are dealing with the property of someone else, and then those victims are left “high and dry.”
“The million dollar question is always whether somebody should go to prison or not to serve a significant period of incarceration,” Walton said.
If they do, then “obviously,” the chances of them paying back their victims drops significantly.
With that, the judge told Donleavy that everyone was banking on the fact that it would be better for him to be working and producing income to repay the victims in the case, as opposed to being sentenced to jail or prison.
“I wouldn’t lose any sleep over sending you to prison after what you’ve done,” Walton said. “So what I would suggest is that you better work tirelessly to pay your victims back.”
If the defendant failed to do so, then Walton said that a prison cell may be the most appropriate place for Donleavy.
The judge then suspended the 1-15 year prison term for the second-degree felony, and 0-5 years on the third-degree felony charge. He also suspended the two jail terms on both misdemeanor charges.
The defendant was ordered to pay the more than $603,400, as per the stipulated agreement, and to get a mental health evaluation and complete any recommended treatment while on probation, as well as other standard provisions as ordered by the court.
At $500 per month, it could take the defendant as long as 102 years to pay the total restitution.
This report is based on statements from court records, police or other responders and may not contain the full scope of findings. Persons arrested or charged are presumed innocent until found guilty in a court of law or as otherwise decided by a trier-of-fact.
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