WESLEY SMITH thought his car was the least of his worries.
The disabled Army veteran, whose hands were crushed during one of his four tours in Iraq and Afghanistan, is recovering from a stroke and suffers from advanced diabetes. His wife has sickle-cell disease. And his 17-year-old son is being treated for cancer.
At least his car - a 2006 Lexus RX300 - was in great shape. He bought it in August 2013 from Autosource Enterprises Inc., a used-car dealership in Holmesburg.
Smith had purchased several vehicles over the years from Autosource, at Frankford Avenue and Oakmont Street, and had referred many customers to owner Boris Zelen, who rewarded Smith's loyalty by inviting him to the dealership's holiday parties.
"I knew Boris and I met his wife," says Smith. "We'd sit in his office and talk about the car business. I thought we were friends."
Things got strange after Smith bought the Lexus. He financed the purchase with the trade-in of his older-model Lexus and a loan for $16,716.
But he never received the car's registration, nor did his lender ever receive the title. Each time he called Zelen for an explanation, he was given another excuse for the delay. Finally, he says, Zelen wouldn't take his calls.
In February, Smith received notice that Autosource had filed for Chapter 7 bankruptcy. Smith and other Autosource customers were included among the list of creditors and attended an April 23 hearing. They learned that Zelen hadn't been paying his bills. That's why their tags had never arrived from the state. They left the hearing, presuming - naively - that they'd be informed of anything they needed to know while Zelen worked things out with the court.
Three months later, Smith's wife looked out the window of their Germantown home at 3 a.m. and saw the Lexus being towed by a repossession company, even though the Smiths' car payments were current.
The Smiths didn't know it, but the same scenario was playing out for other Autosource customers, all of whom were up to date on payments - and some of whom had been waiting up to a year for their tags.
Monique Branch's 2011 Hyundai Sonata was repo'd, leaving her no way to get from her East Oak Lane home to her corrections officer job on State Road.
Jonathan Frissora's 2007 Cadillac CTS was nabbed in Fishtown the morning he was to drive to a wedding in Maryland. He has since rented a car, as his job as a PECO supervisor requires him to visit field sites.
Autosource customer Michael Keough, meanwhile, has been hiding his 2005 Jeep Grand Cherokee far from his Northeast Philly home, lest someone repo the vehicle he has been paying for since April 2013.
At least five others have lost vehicles they bought from Autosource. There may be more, and it's my hope that they'll read this story and contact the city's consumer advocate, Lance Haver, who is eager to help them get their cars back.
Because this situation is unbelievable, let me untangle it for you. I'm doing so without input from Zelen, who now sells cars at Bell Auto Group on Frankford Avenue. He declined to comment, referring me to his lawyer, David Kasen, who did not return my call.
Back in 2012, Autosource allegedly obtained a $250,000 line of credit from a lending company called Avangard, based in Northeast Philly, that finances the purchase of vehicles for car dealerships. The company holds liens on the titles of the cars it finances, until they sell.
Avangard president Simon Friedman told me that his company, which held titles on "21 or 22" Autosource vehicles, required Zelen to pay ongoing interest and fees on each car. When a car sold, Zelen was to pay its price in full to Avangard within 90 days.
In January, Zelen stopped making payments to Avangard, says Friedman. Zelen also stopped forwarding fees and paperwork on sold cars to the state's Department of Motor Vehicles - the reason Autosource customers never received registrations from the state. All the while, Zelen's customers, unaware that he wasn't paying his bills, were dutifully paying off their car loans. They didn't know that Avangard, a company they'd never heard of, actually held the titles.
At the April 23 bankruptcy hearing, some Autosource customers got to meet Friedman. One of them was Branch, the corrections officer, who says she was "hysterical" when she learned that Avangard held the title of her Hyundai Sonata, which she'd purchased a full year before.
"I was shaking and crying," she said. "I had been paying off my car loan, but the title wasn't mine."
She says Friedman assured her that everything was going to be fine.
"He looked me dead in the eye and said, 'We would never just take your car! You did nothing wrong.' He told my husband, 'Please tell her not to worry. We will all work this out.' "
Four months later, Branch's car was repossessed in the middle of the night, right from her mother's driveway.
"I saved for three years for my down payment," says a woeful Branch. She has continued to pay her car loan, since she's afraid of ruining her credit if she stops.
"I used to drop my husband at his counseling job in West Philly every morning, then drive to my own job. Now he has to get up two hours early to take SEPTA. My daughter used the car to go to her night classes at Temple. Now she's taking the train after dark, which I don't like. I'm begging rides from friends. This is a nightmare."
Her woes do not weigh heavily on Friedman's heart, which has gone stony in the months since he promised not to take her car.
"I am sympathetic, but I really don't care. I have to get my money and just repossess the cars," he told me, adding that he had seized nine cars off the lot, and another nine "wherever I found them."
Haver, the city's consumer advocate, believes Avangard is overzealously interpreting an order signed in June by U.S. Bankruptcy Judge Jean FitzSimon.
Her order states that Avangard may "exercise any and all rights it may have under any and all applicable laws" to five specific cars that were located at a New Jersey lot. The order does not mention the cars that were purchased in good faith by customers who've been driving and paying for them.
Friedman said his attorney, Dominique Ward, would explain the legalities that allowed him to repossess the cars, but Ward didn't return my calls. A spokesman for the State Police, whose Vehicle Fraud Unit received a complaint about Autosource, says that its investigation is on hold pending the outcome of a civil suit filed by Avangard against Autosource.
The only person who seems alarmed on behalf of people who have been terribly wronged is Haver. Two weeks ago, he hand-delivered letters to FitzSimon on behalf of three Autosource victims asking her to examine the repossessions. The judge, bless her heart, has scheduled a hearing for Oct. 15.
"The laws are there to protect people, not to let others take advantage of them," says Haver. "Avangard was in a business relationship with Autosource to make money. That involves risk. When people go to buy a car, they're not engaging in that kind of risk; they are engaging in a fair exchange. For Avangard to expect customers to take on the burden of a lender's risk is just wrong."
How dare Avangard try to recoup its losses from customers who had no idea what they'd gotten into.
The only person with the power to give these duped car buyers a shot at justice is FitzSimon. My fingers are crossed for them because, from where I sit, it looks like they were given lemons.
To reach Lance Haver, the city's consumer advocate, call 215-686-7598 or email firstname.lastname@example.org.
On Twitter: @RonniePhilly