- June 12, 2015
By Francis X. Gilpin
Just $25,000 more. That's all the tapped-out Nelson J. Valdes Jr. needed to open ValuCar Inc. in 1996.
Valdes went to Vincent S. LoScalzo, whose sons he knew from growing up in Tampa. Law enforcement officials know LoScalzo better as the boss of the Trafficante crime family.
LoScalzo came through, delivering cash and a check to Valdes in a brown paper bag at a West Tampa bar, records show. The check indicated the money came from an Ybor City produce merchant reputed to be a Trafficante family captain.
From the day Valdes accepted the money until the FBI raided ValuCar four years later, the Mafia helped steer a used car business in Bradenton.
On the outside, ValuCar appeared to be a successful enterprise. The company expanded quickly to Tampa, Port Charlotte, Lakeland and other Florida cities. Valdes gave away cars to the poor, generating positive press. "Mom always taught me: 'Give and you shall receive,'" he told the Sarasota Herald-Tribune in 1997.
According to newly disclosed state records, however, Valdes was receiving a lot more than he should have. He defrauded customers and lenders alike, according to the Florida Department of Law Enforcement. Among his victims was Ford Motor Credit Corp., which claims one ValuCar scheme cost the automobile maker's finance unit more than $3 million.
Valdes also had to hire LoScalzo, who was paid $337,712 over about four years to manage ValuCar's wholesale operation. The FBI found LoScalzo sitting at a desk when agents searched the Bradenton location in June 2000.
ValuCar collapsed into bankruptcy within a year of the FBI raids. The company's debts caused a huge headache for long-time Tampa car dealer Ernest B. Haire III, who had invested $350,000 for about a one-third ownership stake in ValuCar.
Valdes, 45, formerly of Apollo Beach, went on to became a valuable informer for a multi-agency task force that explored connections among local businessmen, gangland figures and public officials, including judges. Valdes is expected to be sentenced early next year after pleading no contest to a grand theft charge in Manatee County circuit court.
Bradenton criminal defense lawyer Thomas H. Ostrander, who represents Valdes, says his client is negotiating with state prosecutors over how much restitution should be paid to ValuCar victims.
Nelson Jesus Valdes Jr. bounced around Tampa Bay area car dealerships as a salesman for a decade before founding ValuCar. He was fired from one dealership after the business manager filed a sexual harassment lawsuit against him, two co-workers he hired for ValuCar told investigators.
Two years into the ValuCar venture, Valdes and one of his original partners split up. Haire, who started working at his family's Ford dealership in Tampa in 1973, bought out the disgruntled co-owner. Haire helped to arrange financing so ValuCar could buy used autos at auction on credit. Ford Motor Credit was reassured by Haire's $5.9 million net worth and personal guarantee that ValuCar was good for the money.
LoScalzo, 68, of Brandon, was already on the job. The reputed mob boss tried to get Tampa businessman Joseph DiGerlando to invest in ValuCar, state records show. Law enforcement officials identified DiGerlando as a Trafficante soldier during a 1992 investigation of the old Key Bank in Tampa.
Nevertheless, DiGerlando declined LoScalzo's invitation, which caused a rift between the two men. Valdes later told the FBI that LoScalzo was so upset at DiGerlando that reputed Trafficiante family underboss Steven B. Raffa had to mediate a truce. DiGerlando couldn't be reached for comment.
ValuCar ripped off banks, including AmSouth and SunTrust, records show.
Valdes was supposed to repay a share of inventory loans within three days of selling a used car. But two ValuCar employees, Linda G. Weinberg and Christina T. Sweet, say Valdes and LoScalzo often delayed repayments for months. That meant ValuCar made tens of thousands of dollars in extra income off the "float" from the floor plan financing, records show.
The men also instructed sales and finance employees to submit phony loan applications to the banks whenever a buyer couldn't be qualified any other way.
ValuCar's Port Charlotte office specialized in creating fictitious W-2 forms. A Port Charlotte employee was so good at digitally manipulating the forms that he was dubbed "the art department" around ValuCar.
Customers who traded in their old vehicles got their own surprise. Court records show Valdes sold trade-ins but would neglect to pay off outstanding loans on the vehicles. That caused difficulties for his customers and their previous lenders.
Ford Motor Credit regularly sent in auditors to inspect ValuCar records. But LoScalzo undermined that check by befriending one of the auditors, who gave the mobster advance warning of inspections. LoScalzo couldn't be contacted for comment.
The rest of the ValuCar operation wasn't quite that slick.
The company reported gross sales of $69.4 million in 1999. But late that year, an employee was fired for misplacing $6 million. The money eventually turned up again.
Nobody felt the financial consequences of the ValuCar debacle worse than co-owner Ernie Haire.
Although Haire considered himself a passive investor, Ford Motor Credit went after him when the publicity from the FBI raids dried up ValuCar sales. Ford inspectors swooped in and this time got to look at the real financial ledgers. Valucar owed Ford nearly $3.4 million.
"I was devastated," Haire testified last year in Tampa. "I was concerned about the reputation to my dealership."
Ford Motor Credit was more concerned with getting repaid $1.2 million that it wasn't able to collect after liquidating ValuCar's inventory. As a major Ford dealer in Tampa, Haire wasn't about to stiff the automaker on his personal guarantee.
"Is this a situation where you get 60, 90 days to try to raise the $1.2 million, or how does that work?" Haire was asked by his attorney, G. Michael Nelson of Tampa.
"Unfortunately not," Haire replied. "It has to be within two or three days."
Haire didn't return a message from the Review seeking comment.
Valdes was able to squeeze $200,000 out of ValuCar before the bankruptcy filing. But Haire says he didn't have $1 million in cash and had to borrow it.
Haire lives in the exclusive north Hillsborough County community of Avila, next door to 1980s-era corporate raider Paul Bilzerian. Haire owned $2.3 million in stock in a Bilzerian company and decided to sell some of it to raise the $1 million.
But Bilzerian and his wife, Terri L. Steffen, persuaded Haire to accept a loan against the stock. Bilzerian didn't want a sudden sale of so many shares to depress the price of his company's stock, court records show.
Haire agreed, despite what he claimed later were grave reservations. Bilizerian has been in and out of bankruptcy and prison for the past 15 years, as he and securities regulators battle over fines and compensation to his former investors, the court record stated.
Bilzerian and Steffens assured Haire that neither the $1 million he was borrowing nor his stock was encumbered. As Florida's Second District Court of Appeal put it in an opinion issued in August: "Subsequently, Mr. Haire learned that these representations were false."
Haire sued a Bilzerian partnership and won a $2.3 million civil trial verdict in 2004, which was recently upheld by the appeals court. But he already had been dragged into the FBI probe.
A year after the ValuCar raids, the FBI searched the Avila estates of Bilzerian and Haire. An FBI affidavit submitted to a federal magistrate who granted permission for the search cited an unnamed informer. Haire claims that informer was Valdes.
Valdes was busy helping the government gather evidence against LoScalzo, Haire, Bilzerian and others. Valdes was in the middle of an unsuccessful attempt by the FBI and FDLE in 2002 to ensnare a top Hillsborough sheriff's commander in an apparent loan-sharking sting.
The former ValuCar general manager is leading a quieter life these days. After the bankruptcy, Valdes managed a restaurant near his former Apollo Beach home. His salary: $26,000 a year, a 10th of what he made in the heyday of ValuCar.
Ernest B. Haire Haire Strikes Back
Tampa automobile dealer Ernest B. Haire III has taken unusual offense to a Federal Bureau of Investigation agent who led a massive probe of possible ties among Tampa Bay area business, government and organized crime.
A federal lawsuit, which seeks $20 million in general and punitive damages, accuses FBI agent Kelly J. Thomas of violating Haire's rights by making false statements to obtain court approval to search the car dealer's Avila mansion in 2001.
In court documents, Haire claims his former ValuCar Inc. partner, Nelson J. Valdes Jr., supplied Thomas with most of the information that was cited in a search warrant affidavit that Thomas submitted to a federal magistrate.
Haire, 50, contends Valdes is now feeding him dirt on Thomas.
In a sworn statement, Haire says Valdes told him that the FBI agent called last June 6 and made the following threat: "I'm going to kick Ernie Haire's ass. I'll put something on him that Ajax won't take off. I'm gonna get Ernie Haire good."
Thomas, who is assigned to the FBI's Sarasota office, didn't return a Review call for comment. Thomas has worked for the bureau for 15 years and was a prosecutor in Seattle before that.
The U.S. Department of Justice, on behalf of the FBI, has asked Judge James S. Moody Jr. to dismiss Haire's lawsuit. Federal prosecutors say Thomas has a qualified immunity from the type of civil claim made by Haire.