“The work that California DMV investigators do year-round doesn’t often see a spotlight, but this case demonstrates the kind of consumer protection investigations they conduct. We thank them for working to protect California consumers.”
CSLEA President Alan Barcelona
SAN BERNARDINO COUNTY – On November 1, 2023, California Attorney General Rob Bonta announced the arraignment and filing of charges against two defendants in a multi-million-dollar embezzlement and tax fraud scheme in San Bernardino County.
Defendant Clayton Thom, who operated a high-end automobile dealership, was allegedly involved in the theft of more than $4 million from 35 victims, and charged with 37 counts of grand theft and one count of elder theft. In addition, he and his business manager, Valerie Tanaka, were charged with 13 counts of tax fraud for allegedly defrauding the State of California of more than $4 million in taxes.
“My office is committed to protecting hardworking Californian consumers from financial crimes,” said Attorney General Bonta. “I am grateful to my legal team and our state agency partners for their incredible work in this case. Fraud against Californians and against the state will not be tolerated by the California Department of Justice.”
“The California Department of Motor Vehicles’ (DMV) Investigations Division is tasked with enforcing the laws, rules, and regulations that apply to new and used vehicle dealers,” said DMV Investigations Chief Christina Michel. “Our Inland Area office worked closely with local law enforcement, CDTFA and other agencies to thoroughly investigate these complaints and bring these individuals to answer for their actions.”
The prosecution in this case is being handled by the California Department of Justice’s Special Prosecutions Section. CDTFA and DMV carried out the investigation and arrests in the case.
According to investigators, Thom allegedly perpetrated his embezzlement scheme from 2018 to 2021 by stealing from customers at his dealership in Upland. He is accused of encouraging victims to place high-value vehicles on consignment, sometimes persuading them to leave their titles at the dealership. These victims signed contracts that promised payment within twenty days of their vehicle’s sale. However, after selling the victims’ consigned cars and collecting the proceeds, Thom is accused of not paying the victims. It is alleged he used these consigned vehicles to settle his debts and to obtain loans. Separately, Thom allegedly prevented customers who purchased consigned vehicles from receiving legal ownership. It is alleged he did not endorse, date, and deliver the certificates of ownership and registration, or in some cases, delivered forged titles.
Additionally, with the alleged assistance of Tanaka, Thom allegedly collected but failed to remit around $4.4 million in sales tax to the State of California from 2017 to 2021.
Thom and Tanaka were arraigned on October 31st at the San Bernardino County Superior Court in Rancho Cucamonga.
A copy of the conformed complaint can be found here.
