Finance firm drops suit against Russ Darrow dealership over straw buyers for fugitive con man

The nation's largest auto finance company has dropped its lawsuit against auto dealer Russ Darrow over loans to what turned out to be straw buyers of luxury vehicles destined for China via a con man's business.

The parties aren't talking, and now the case will offer no more understanding of the man behind it all — an auto broker, gambler and former FBI informant from Belarus named Albert "Alex" Golant. 

A newly unsealed federal search warrant reveals the FBI and the IRS had been investigating Golant for tax evasion, bank fraud, wire fraud and money laundering before he disappeared from his $7,000-a-month rental home in Waukesha County — all while he was supposedly on federal supervision for a conviction in a similar crime.   

Ally Bank sued Russ Darrow LLC last month, but dismissed it with prejudice last week. Utah-based Ally Bank and Ally Financial Inc., of Detroit, formerly GMAC, say they are out more than $355,000 they can't collect from the "straw purchasers" or recover by taking back the vehicles worth between $50,000 and $100,000, which the suit said could not be located.

RELATED:Lawsuit ties Russ Darrow car dealership to Ukrainian con man's China export scheme

Brenda Rios, a spokeswoman for Ally Financial, said the company would not discuss the case, and attorneys did not return messages.

The lawsuit named a Darrow dealership in West Bend and Russ Darrow Jr., saying he essentially vouched for the buyers seeking financing when his company sold the loans to Ally. The Darrow Group said it had no knowledge of the scheme and was itself a victim.

The company had not even filed a response, and no attorney was listed for it when Ally decided to drop the case, suggesting either someone paid Ally or it obtained possession of the cars, or some other resolution was reached out of court.

The Darrow Group did not respond to requests for an interview Monday.

Golant, 37, left many victims in his wake, according to federal court records. He or his company are being sued in New York and in Los Angeles over millions of dollars he may have gambled away, while fraudulently selling some cars twice — once each to competing exporters in California, where dozens of expensive Mercedes-Benz SUVs headed for China were seized by customs agents in February.

His Wisconsin-registered company kept an office in suburban Chicago. During the IRS and FBI investigation, agents surveilled him and associates there and at his golf course home in The Legends, in the Waukesha County community of Wales.

According to investigators, Golant would sometimes get money directly from foreign buyers, then buy their requested luxury cars and SUVs in the U.S. and ship them to China and elsewhere. Sometimes, Golant or people working for him would buy the cars with financing. He would pay off the loans in a few months, then have the unencumbered titles to sell to companies in California that would export the cars.

Manufacturers like Land Rover, Mercedes Benz, BMW and Maserati try to suppress such resales by punishing dealers who sell to buyers they know or suspect will send the vehicle abroad.

In the sales involving Darrow, an Illinois company, Reliable Car Source, would sell the cars to Darrow in West Bend, which would then resell — with financing — to individuals, most of whom later told investigators they never even saw the cars.

According to the Ally lawsuit and federal investigators, most of those straw buyers could not afford the vehicles and their loan applications included false information.

But in 2016,  according to court records, many of the loans just went unpaid. Money that California exporters were sending to Golant's company — millions of dollars — was instead being wagered at casinos in Louisiana and Illinois.  A review of bank records of Golant and his businesses showed that since May 2014, more than $14.6 million had been sent to casino and professional gamblers.

In April that year, Golant and some associates were flown to L'Auberge Casino Resort in Lake Charles, La., and were playing $25,000 hands of blackjack —  and winning — until they were kicked out because the casino couldn't verify the source of the gambled money.

Resort staff told investigators that while Golant didn't actually play, he seemed to direct the players, resisted ever identifying himself and controlled the money he and his group used to gamble.

Golant's activities also raised suspicions about money laundering. According to the IRS agent's affidavit, Golant and his associates deposited hundreds of thousands of dollars in the L'Auberge account, where it was gambled and turned into other winnings of at least $2 million.

In July 2016, Golant and associate Tomasz Bazarewicz gambled about $50,000 at Grand Victoria casino in Illinois, then retrieved two duffle bags of cash from Golant's Mercedes, returned to the casino and bought about $70,000 worth of chips. They continued gambling and later cashed out $182,000 in chips.

While the Ally lawsuit concerned six cars, Darrow Group president Michael Darrow told federal agents in late 2016 that Darrow entities had purchased 32 luxury vehicles from Reliable Car Source, then resold them to Reliable clients, with a total of $2.2 million in financing. The court records do not indicate how much of that financing was with Ally.

Golant, as the seller, had signed over the titles to Darrow. Nineteen of the 32 loan applications turned out to contain materially false statements.

Federal agents were also looking at Golant for tax evasion. According to an investigator's affidavit, Golant has only filed two federal tax returns since 2012, despite his luxurious lifestyle.  He claimed his total income in 2014 was $36,997 from his car sales business. In 2015, he had nearly doubled that, to $72,989, according to his return.

Yet in financing applications he submitted to Darrow, he claimed income of $25,000 a month. He was paying $7,000 a month just to rent his home along the Waukesha County country club. 

In Los Angeles, an auto brokerage known as Powerful Automotive Group is suing Golant over dozens of luxury vehicles he failed to deliver after getting paid by PAG. Another broker, ZHZ Auto Group, was also missing cars it had paid Golant to procure and send to California. Owners of the two firms, normally competitors, realized Golant claimed to have sold each of them the same car on multiple occasions, according to court records.

In New York, a company that put up more than $4 million for Golant to buy cars for export is also suing and may be trying to obtain the same cars the California brokers say they had paid Golant for but were never delivered.

Federal court records show Golant pleaded guilty to wire fraud in 2013 for another car export scheme that involved taking about $3 million from clients ordering cars, failing to deliver and gambling away most of the money.  

But Golant wasn't sentenced until January 2016, after he helped the FBI make a racketeering case against two Russian mobsters involved in illegal gambling and health care fraud, Michael "Fat Mike" Danilovich and Mikhail "Russian Mike" Zemlyansky.

He was sentenced to time served and three years of supervised release, which he was allowed to serve in the Eastern District of Wisconsin since he was living in Wales while running his business, Timeless Autos.

Golant disappeared more than a year ago. One former business associate assumes Golant, who came to the U.S. when he was 9 but speaks perfect Russian, is living in eastern Europe.