Life in the Fast Lane: American First CU Takes Exotic Car Borrowers to Court
The La Habra-based financial cooperative had an indirect lending relationship with the world's busiest Lamborghini dealer and made exotic loans for cars purchased at at least two other dealers, according to court records.
American First Vice President of Marketing Ryan Zilker denied the community chartered credit union targeted wealthy members. "If you look at our average member, they're not Lamborghini owners," he said. "But, individually, the loans were a good opportunity for the credit union."
Zilker said the purpose of a credit union is to maximize return for members, and the high-yield loans do produce a good return for the credit union.
They aren't defaulting at a higher rate than other auto loans, he said, nor do they represent a large percentage of the credit union's auto loan portfolio, which reported $147 million outstanding as of June 30.
American First reported $2.6 million in delinquent "other" consumer loans and claimed $657,902 in repossessed autos as of June 30. Those figures were down from first quarter, when the credit union reported nearly $3.5 million delinquent "other" loans and nearly $1.4 million in repossessed autos.
Comparatively, the credit union reported nearly $2.3 million delinquent "other" consumer loans as of June 30, 2008, but only $108,575 in repossessed autos during the same period.
One lawsuit targets a member who defaulted on a 2008 Lamborghini Gallardo and owes nearly $226,000 plus interest.
The credit union made the loan through an indirect lender relationship with Lamborghini of Orange County, once the world's most successful Lamborghini dealership, until it closed suddenly in November 2008.
Owner Viken Keuylian was a high-profile businessman who attracted celebrity customers like Kobe Bryant and Dennis Rodman and hosted glitzy charity events with Elton John and Sharon Stone. He pleaded guilty in March to charges stemming from a scheme in which he withheld more than $12.6 million from Volkswagen Credit Inc. Keuylian had borrowed money from Volkswagen, which owns Lamborghini, to fill his showroom floors. He admitted to federal investigators he told VCI the vehicles had not been sold when in fact, they had been.
The FBI reported Keuylian had misappropriated the funds to pay on other business debts, including a vineyard, a commercial building in Newport Beach on Pacific Coast Highway, and a Beverly Hills Lotus dealership.
In a March 11 release, the FBI said it had seized 14 of the vehicles. Included with Keuylian's plea agreement was a list of 54 vehicles VCI claims it owns that had been sold, and included the names of the unfortunate customers. One name is the same as the aforementioned member who defaulted on the Gallardo; however, the vehicle listed in connection with the VCI suit is a 2008 Lamborghini Murcielago.
Although the credit union had made loans through the disgraced dealer for three to four years, Zilker said all outstanding exotic car loans it obtained through Lamborghini of Orange County have perfected titles.
"When the news broke, we immediately checked every single loan from that dealer," he said.
Reality TV star Simon Barney, who stars along with wife Tamra in the Bravo show The Real Housewives of Orange County, is also among the Southern California rich and famous being sued by AFCU to recover against delinquent exotic car loans.
Barney hasn't made a payment on his 1989 Ferrari since May 1, and owes more than $24,000 plus interest according to documents filed June 10 by credit union attorney Alana Anaya in Orange County Superior Court. Barney filed an answer to the credit union's complaint Aug. 7 denying all allegations. He claimed the credit union orally modified the loan agreement, one of 16 filed affirmative defenses.