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Home --> Fraud & Scams --> Autos --> Miracle Cars Fraud

Miracle Cars Fraud

Scam:   Thousands of people were scammed out of millions of dollars in a "miracle cars" fraud.

Origins:   Affinity fraud is a type of scam wherein members of a close-knit group are exploited via a con artist's presenting himself as one of their own kind. Such grifts work on the principle that people who are like us — folks of our particular ethnicity or religion, who hail from our hometowns, who attend the same church (or club, or school), who live in the same neighborhood, or who have weathered similar hardships and setbacks to those we have endured — can be trusted. They talk our talk and walk our walk, and since we ourselves are honest people, we assume by extension that people who are so much like us must be just as trustworthy. The nature of the bond itself matters not; what matters is the victims' being led to believe they have a great deal in common with those who are about to cheat them out of their life savings.

The "Miracle Cars" scam that ran between 1998 and 2002 is a good example of affinity fraud. Before it finished running its course, thousands of churchgoers had been convinced to part ways with millions of dollars, all because they trusted as one of their own the person they handed their money to.

In 1998, rumors began to circulate among congregations in California that a wealthy man named John Bowers had died a few years earlier, leaving behind a $400 million estate. Part of that estate reportedly included a huge inventory of vehicles that the estate's beneficiary, Bowers' adopted son Robert Gomez, had been instructed to sell at bargain prices to Christians who acted in accordance with the Bible's teachings. The proceeds of those sales were to be used to defray the estate tax on the inherited fortune. These rumors were started by Robert Gomez, who announced the deal from the pulpit of a church in one of Los Angeles' poorest areas, and the rumors were supported by James Nichols, Gomez's roommate, whose family had long been associated with the church where the pitch was made.

For as little as $1,000 each, those of strong religious faith could acquire good, reliable cars — all they had to do was pick a vehicle they wanted off the handwritten list being circulated, pay the money requested, and wait for the estate to settle before receiving their cars. Those who chose to buy were given "contracts" in exchange for their checks, cash, or money orders, but those contracts did not include mention of the vehicles' identification numbers (VINs), that information supposedly withheld under a gag order issued by the judge probating the will. The list of available vehicles was mouthwatering: one could have a practically brand new Toyota Camry for $1,000, a Lexus for $3,000, or a Cadillac Escalade for $6,500.

News of this windfall fell on highly receptive ears, many of them belonging to folks of limited means who had up until then been making do with unreliable transportation (or none at all). But thanks to this dead millionaire's generosity, in due time they would be able to get to their doctors' appointments and tend to ailing relatives across town all on their own. A little time, a little money, and a whole lot of faith would set them on their way to vehicular-assisted freedom.

Word about the purported deals circulated through grass-roots Christian networks across the nation, then escaped into the secular world. As the scam rolled along, Gomez and Nichols hired two women, Corinne Conway and Gwendolyn Baker, to talk up the cars and to embroil further congregations in the scam. Churchgoers were told that God wanted to reward them and that all they needed was to believe. Congregations in various communities were worked into buying frenzies by these practiced pitchwomen, who presented themselves as fellow believers out to share good news with their brethren. Duped members of the clergy also preached the good news of the discounted cars from their pulpits, adding another patina of credibility to the
pitch.

As time went on and no cars appeared, faith in the scheme was maintained in a variety of ways. First, there was always the handy explanation that the cars were still tied up in the legal wranglings attendant to the disposition of a large estate. Court delays were therefore to be expected. Lack of information about the vehicles themselves (such as their VINs or the location where they were being housed) was explained as having to do with a gag order placed on the matter by the judge probating the will. And those who grew tired of waiting for their "miracle cars" and demanded their money back, got it — they were issued full refunds, acts that worked to frame the entire proposition as being on the up-and-up. After all, if one knew of a doubter who'd gotten his money back, didn't that prove that the people behind the "miracle cars" proposition were to be trusted?

Yet all that belief to the contrary, it was a scam. There never were any cars to be had, either by those of strong faith or otherwise. There was also no deceased millionaire named John Bowers. By the time the fraud was uncovered and halted, believers across the nation had shelled out more than $20 million for vehicles that didn't exist, all on the strength of what they heard through their local churches. In all, 7000+ vehicles were "sold" during the run of the fraud, the list of available cars always expanding to include more vehicles for those determined to have them.

The two men who ran the con, James Nichols and Robert Gomez, received sentences of 24 years and 22 years respectively, while the two women they recruited, Corinne Conway and Gwendolyn Baker, received sentences of 14 months and 5 years respectively. All four were ordered to make restitution to their victims, but even after all their cash and assets were rounded up millions of dollars remained unaccounted for. On 17 March 2008, the U.S. Attorney's Office posted a notice for the victims of the Miracle Cars scam, advising them that it was ready to begin mailing restitution checks to those duped by the fraud. Victims can expect refunds in the amount of approximately 6% of their total losses.

Most cons run on the basis of blinding potential victims to the underlying fraud by placing before them tantalizing mental images of great riches or extraordinary windfalls that are about to be theirs. The "miracle cars" scam had that in its promise of barely-used automobiles to be had for a mere pittance. Yet what truly caused this fraud to succeed was its "affinity" element: the victims were especially trusting thanks to their reliance on the presumed commonality between them and those running the con. Themselves good Christians, they believed those who were telling them about the cars were also good Christians — they did not doubt that the cars existed or that there was a deceased millionaire who had left instructions that his fleet of vehicles was to be handed over to fellow Christians for a nominal fee.

In affinity scams, con artists sometimes provide returns to leaders of the targeted group first, then use those trusted individuals' names as proof of their own integrity. While no one at any level of the fraud received one of the "miracle cars," church leaders were duped into participating in the con through their own belief in the promised windfall, and a number of pastors stood before their flocks to share with their congregations the good news about the discounted vehicles. This phenomenon is part and parcel of an affinity scam: before anyone involved catches wise to the game being run, those being victimized enthusiastically recruit friends and relatives to share in the wealth, thereby themselves becoming unwitting agents of con men.

"Miracle cars" victims not only had to overcome their reluctance to admit (even to themselves) that they might be getting taken, they also had to grapple with their own faith in God. Those running the game had the ones they were fleecing convinced that giving up on their "investment" was tantamount to turning their backs on God. He had a grand plan for them, and opting out of it would have demonstrated weakness in their faith, so they therefore chose to continue to believe.

Barbara "lambs to the financial slaughter" Mikkelson

Additional information:
    United States Attorney's Office on Miracle Cars Scheme   'Miracle Cars' Scheme Targeted Churches, Religious Groups
  (United States Attorney's Office, Western District of Missouri)
Last updated:   28 April 2008

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  Sources Sources:
    Harris, Sheryl.   "Scam Artists Get Close to Victims."
    Plain Dealer.   15 June 2006   (p. C5).

    Logan, Casey.   "God's Little Acura."
    The Pitch [Kansas City].   16 January 2003.

    Tubbs, Sharon.   "Duped by Faith?"
    St. Petersburg Times.   26 July 2002   (p. D1).

    Associated Press.   "Government Alleges Four Offered Discount Cars to People of Faith."
    8 July 2002.

    Associated Press.   "Two Women Sentenced to Federal Prison Terms for Roles in Miracle Car Scheme."
    23 October 2003.

    Associated Press.   "Man Must Pay Back $12.5 million, Serve 24 Years in Car Sales Scam."
    4 December 2003.

    Associated Press.   "Final Man Sentenced in Miracle Cars Scheme."
    11 December 2003.

    Associated Press.   "Prosecutors Don't Want Convict to Benefit from Role in Miracle Cars Scheme."
    24 September 2005.