On Friday August 16, 2013 Stanley Torgerson the head of International Classic Auctions (ICA) was sentenced in Maricopa County (AZ) Superior Court to 3.25 years in prison. Torgerson previously pled guilty to three counts of fraudulent schemes and artifices and theft. He also will serve seven years of probation and will be required to pay restitution of up to $1.5 million in restitution to his victims.
Torgerson was originally indicted on 101 counts of fraud, theft and illegal control of an enterprise. ICA started in 1989 with Torgerson and was known in Arizona for hosting two classic car auctions in Gilbert, Arizona at his headquarters. The firm held auctions on Thanksgiving and St. Patrick’s weekends.
Where did the ICA money go?
So what happened? His car sellers complained that the proceeds from their cars weren’t delivered to them. Typically auction houses have the owners sign the titles and then transfer the title to the final buyer after the money is paid. Generally the auction houses take their cut of commissions and fees and then pass on the proceeds to the seller. Most contracts (written by the auction houses) give the firms up to 21 days to make the final transfer of funds.
When ICA started to have problems they stopped having their Arizona auctions. Silver Auctions stepped in and had a Spring Auction in Fort McDowell, AZ this year.
So the auction house, without any escrows in place, has large sums of monies in their hands and some lag time before they need to dispose of it. And when the economy started to tank, some buyers were slow in making good on their winning bids. In fact some slippery souls have been known to flip the car to a third buyer before they were required to even pay the first original seller.
Buyer beware
So for those thinking of using an auction house to sell your classic car, remember what happened to ICA. Read your contract, understand your terms and make sure your auctioneer is reputable. Ironically ICA’s website is still up and running today!
