UNDATED (WTAQ) - It's estimated that dozens of people were victims of fraudulent practices, lies and deception to the tune of hundreds of thousands of dollars tied to two northeast Wisconsin car dealerships.
Just in the past week, the blame game over Standard Pre-owned in Suamico and Standard Pre-owned 1 in Kaukauna has reached new levels. This as a federal grand jury convenes Tuesday in Milwaukee in this ongoing investigation.
"I certainly didn't see this day coming," says John Solberg, who many believe is the owner and cause of all the problems. "May 18th, when I was fired, I didn't know all the answers and I believed everything would be fixed."
Among those believing that Solberg, who has a long list of entries in Wisconsin's online court system database, is the person responsible are the Wisconsin Department of Motor Vehicles and at one point the Brown County Sheriff's Department.
Since 2011, investigators have been looking into at least 46 fraud cases against Solberg.
"The misconception is that there was a long-term fraud, there was people who didn't get paid at the end," Solberg says. "That's not to say that anybody wasn't paid late, but if somebody was paid late, they were paid interest."
During an interview with WTAQ last week, Solberg claimed he was a front for three men whom he referred to as, "the real owners."
"These three guys I'm pointing as the culprits, the people if you follow the money they have it," says Solberg. "They are saying they have the ability to pay it, but they won't because of my actions."
According to a small claims case filed in Outagamie County and confirmed by Solberg, the 3 men are Brent Strelka, Bryan Crain and James Lenz.
"There ain't one thing that he says that's even remotely true," Strelka responded when asked about Solberg. "From November (2015) to February (2016), we paid all consigners. Everybody was paid in full, the warranty company was paid, and every bill was paid while I was under ownership."
Strelka claims Solberg is the true charlatan, not just to the numerous consigners he never paid and the vehicles sold without titles, but to the people recruited as former owners and investors.
"John sold a bunch of cars and never told anybody and hid the paperwork, never filed it with the DMV, never filed it with anybody," says Strelka. "People are driving around in cars, the owner doesn't know their car is sold, the DMV doesn't know a car is sold and no one knows it other than John and John kept the money."
CRIMINAL ROADMAP
In July 2010, a Wisconsin dealer license for Suamico Investment Group LLC was granted to John Solberg. The business, located at 4060 Veterans Avenue, was opened as Backwoods Bargains.
Nearly 4 years later, in June of 2014, the Wisconsin Department of Transportation investigates complaints of dealer license violations with Suamico Investment Group. DOT officials at that time issues a conditional license with certain stipulations.
"He was always buying a lot of cars. My auction's every Tuesday and usually he'd pay by Friday. But then all of a sudden we've got an issue with him not paying for cars," says Mark Sheriff, owner of Fox Valley Auto Auction. "I called the state inspector, we went up there. He had sold these cars, even though I had all the titles for them because he hadn't paid me for them."
Sheriff says he's never seen anything like this in his 30 years in the car business. Solberg, according to Sheriff, still owes him money, along with a financial institution that works with people who purchase vehicles at the auction.
"They should've shut him down when the state inspector was with me, and I was right there looking for my cars, and the state inspector says 'John where's this car' and he says 'I retailed it'," Sheriff says. "I can't believe it ever got this far, because he should've been shut down at least 2 years ago."
It would be another year or so before Brent Strelka meets Solberg.
"I met John in 2015 as a consignor, he sold two vehicles for me," Strelka says, before explaining the Solberg ordeal he encountered. "He took like $300,000 worth of cars, sold them, never had titles or anything for them, and he got caught doing that. I guess they were going to put him in jail back in 2014 for the same thing, but he agreed to make large payments every month and if he pays off his large bill, everything would be set fine."
Strelka says he was talked into going to auctions and buying cars for Solberg, before he became one of the unpaid masses common with this story.
"So I was out $55,000. He sold all the vehicles I had bought at the auction and never paid me, even though that was the agreement we had," says Strelka. "He kept saying he couldn't pay me because he kept owing NextGear and all these other companies he owed from his previous problems. So he's trying to catch up with them, but he'll catch up with me eventually and he kept putting me off."
By November 2015, according to Strelka, Solberg had a plan to open up a franchise and naming it "Standard Pre-owned" under the Bella Investment Group LLC company.
"He offered me basically to buy into the franchise and since he owed me money it would be free of charge," Strelka says. "And I thought, well, that's one way of getting my money back."
The Kaukauna location, 2930 Lawe Street, was opened as part of that franchise opportunity. Strelka contends that he started as 90 percent owner of Bella Investment Group, with Solberg owning 10 percent. Solberg could become 50 percent owner, Strelka says, if he repaid all the money he owed.
"He always said from the beginning if you ever want out, I'll just buy you out its no big deal. I said you still owe me roughly $45,000, if you give me that over a period of time, I just want to be done," says Strelka. "So in February we signed papers. I transferred the rest of the money in my account to his new account that he started as the new owner."
Solberg recalls a different 2015 path for what would become Standard Pre-owned.
"Backwoods Bargains, February, March 2015, when James Lenz, Brent Strelka came in and took over the company and they changed the direction of the company to Standard Pre-owned," says Solberg, adding that before the boys came in that Sheila Verhagen owned the now-former Backwoods Bargains. Verhagen is also named as a defendant in a small claims case brought by a consignor.
Solberg also disputes previous media reports and accounts which say that he would contact people selling their cars on Craigslist and offer to do it for them.
"There was a call center with 20 to 30 people that worked in it. I never called people," Solberg claims. "I wasn't involved in the day-to-day operations. The only time somebody talked to me is when they were trying to get to the owners of the company, and I was the barrier between Brent Strelka and the customers."
Solberg detailed how money began disappearing from business accounts at Standard Pre-owned, including his assertion that the wives of Strelka, Lenz and Crain used it as a, "personal ATM."
"What you have is, I put this much money in the company so I can take this much out," says Solberg. "You have that attitude a lot, some personal things come up."
Then in November 2015, Solberg claims he spoke up to Strelka and Lenz about how the business side was being run. At that time, he was given, "a kickback and then threats were made to do it this way or else."
"It seemed like everybody was signing everybody's name," claims Solberg. "There was promissory notes signed in my name by other people."
Things really began to unravel this past March, when the Wisconsin DMV files its own complaint with the state Division of Hearing and Appeals to revoke the license of Suamico Investment Group. However, a revocation hearing for that would not be scheduled until July 20th. At the same time, the Brown County Sheriff's Office opened a criminal investigation into Standard Pre-owned in Suamico.
According to their release, "The main person of interest in this investigation has been identified as John M. Solberg. Search warrants had been served on financial institutions and ultimately on 05-18-16 a warrant was executed at the 4060 Veterans Avenue location and the business was shut down. Another business location for Standard Pre-Owned is located at 2930 Lawe Street Kaukauna WI in Outagamie County. This location is also part of this joint investigation and has also since been shut down."
Strelka says everything was supposed to be changed over to his name, per their agreement, by May.
"He showed me proof of an IRS paper that he changed the IRS number, which now comes to find out, was fraudulent, he doctored it up," Strelka claims. "Then he opened bank accounts with fraudulent papers. I canceled my insurance, well he went behind my back called my insurance guy, and said Brent never sold the place and here I'll send you a payment. So he kept my insurance going without my knowledge."
During that period between March and May 18, Strelka believes Solberg knew something was happening and decided to bail money out of the company. Apparently, May 18 was a big day because that's also the day Solberg says he was fired. When asked what he was told upon his termination, Solberg said this:
"That's an interesting question, never thought about the answer. But the answer is this...Brent said he put $100,000 into it, there was other people who said they would invest up to $50,000," Solberg says. "Bryan calls me up and says you don't dare talk to any of these investors or try to get anybody any money, that's not your job. I replied that I've been the face of this company, I'm not going to listen to that. He said well don't show up tomorrow. The next thing I know is the media saying that John Solberg took all this money."
According to a statement from the Brown County Sheriff's Office last week, "The Standard Pre-Owned case is now being handled by the U.S. Attorney’s Office. The investigation is ongoing but is now being handled by the FBI." The Kaukauna Police Department did not respond to repeated requests for comment.
When the FBI Field Office in Milwaukee was contacted, Special Agent Jennifer Walkowski said, "While this continues to be an active investigation, there is no new information I can give you at this time."
VICTIMS SHARE STORIES
Media accounts going back to May have detailed victims of Standard Pre-Owned and its less than scrupulous business practices.
Even WTAQ parent company, Midwest Communications, was touched by the dealerships. Louis is an employee at the Green Bay office and was looking for a trade-in this past April.
"We were looking for a light truck, as we end up doing a lot of hauling, got kids in school going back and forth to college," Louis explains. "That brought me to Standard Pre-Owned in Kaukauna, I had visited the lot a few times."
Louis says they had several trucks which he was interested in. After narrowing down the one, and working out a deal for his trade-in car, Louis drove away in the truck meeting his family's need.
"A few days had passed and they hadn't paid off my lien yet of the vehicle I traded in, so I went and talked to them about it and they said it must've been an oversight, it would be taken care of," says Louis. "So I gave them now 4, 5 days...called my bank, still hadn't been paid off, called them back and couldn't get a hold of them."
This runaround continued, even while he and his son went up to visit friends in Upper Michigan.
"My son had used the truck to drop somebody off and was ticketed for non-registration of a vehicle," says Louis. "Turns out the MV11 form was never turned in to the state, which they completely denied and said everything was done, it was taken care of. And I said you might want to inform the DMV of that."
Louis says between the mess involving an unpaid lien, an unfiled registration form and a major brake issue employees at Standard Pre-Owned claimed they would fix, he went back to find out about his car that was traded-in.
"My vehicle was gone," Louis recalls. "By now we're into May, and I finally got a hold of one of the managers at Standard Pre-Owned and they said they could tell me nothing. I was surprised, and then they gave me a name and number of a state investigator for the Department of Transportation. From then on, all my dealings were with either them or the Kaukauna Police Department."
Richard Sprague, who along with his son, has filed legal action over his experience at the dealership is outspoken about it. On April 11th, Sprague and his son agreed to put their Mazda Miata on the lot, with conditions.
"Under the circumstance, nobody was to drive the car, the car wasn't to leave the lot, no test drives, nothing without calling us and we would come there when the test drive was being done," Sprague says. "Come to find out they sold the car April 29, but they called us on May 11 to see if we'd do a consignment on the car that they had a potential buyer who was a family member of one of the employees. They wanted to buy the car, but they couldn't pay for it until May 30."
Sprague and his son showed up to the Kaukauna dealership on May 30 and the place was a virtual ghost town.
"We still own the title, the title is in my name today," says Sprague, adding that his dealings with local law enforcement has been just as fruitful. "He has no registration on the car, no plates on the car. If the plates are there, they're illegal. I had my appeals hearing a week ago, and the attorney for the state told me and the judge the title is still under my name."
He even knows who's driving that Mazda, stating, "If he ever has an accident and something happens...who are they gonna sue? It's me they're gonna sue."
Louis, who considers the summer of 2016 a lost cause, says he's out nearly $2,000. The lone bit of humor came when he learned about the fate of his trade-in...abandoned.
"The one time my wife and I laughed pretty much all summer was when I brought home a bill," Louis recalls. "I said 'Look at this they found out car,' she said 'You're kidding," and I said nope, we owe $985."
CAUGHT UP IN COURT
Plenty of legal action has happened since both dealerships were silenced, but there may be plenty more to come.
Solberg claims he's working with a group of consignors who lost money, led by Sprague. At first, Solberg says he wasn't accepted well when contacting those victims.
"But as time went on...they gave me a chance to divulge all the facts, get more bank statements, more documents to show that these guys took the money out," Solberg says.
"I contacted 18 people now that have had their vehicles stolen," Sprague says. "Everybody's come to my court cases, they've helped out, and they've answered questions. Everybody's sharing information to get their vehicles back."
Like everything else in the time Brent Strelka has spent knowing John Solberg, something he admittedly regrets, Strelka remains skeptical.
"John's talked to Richard Sprague, and he's a nice guy and he's a victim, but Richard has put a lawsuit against Sheila (Verhagen) and James Lenz who has absolutely nothing to do with his car or anything to do with what's going on," says Strelka. "Now they're going to countersue Richard Sprague and so now you have two innocent victims out of money suing each other."
It's unclear who the main target of the FBI investigation into Standard Pre-Owned is, but Strelka contends it's Solberg.
"We talked with the FBI, and his last ditch effort is to make chaos, none of it matters, he's the only guy they know it," says Strelka, who will be at Tuesday's grand jury hearing. "John's the only one not invited to it, if that makes sense, because it's about him."
Still, there is a belief that the true villain in all this is the state of Wisconsin. Sprague and Brad Sheriff both believe something must be done about their role in this scam.
"You talk to the cops they tell you Motor Vehicle's in charge of everything, you talk to Motor Vehicle they tell you the police are in charge of everything," Sprague says. "I don't think either one of them has a clue of what they're doing."
"You go after the state because the state was the one that should've shut them down two years ago," says Sheriff, relaying advice he gave to a victim who contacted him. "The state knew what he was doing, they knew they were taking all those cars on consignment. Well, if he did it before, it's too easy you knew he was going to do it again."
Sprague puts the blame squarely on the shoulders of Wisconsin DOT Field Investigation Unit Inspector Michael Urban.
In a statement from Field Investigative Unit Supervisor Mark Sier, "Consignment sales represent a tiny percentage of dealer vehicle sales in Wisconsin. Consignment sales have broad requirements, but are largely regulated via the signed consignment agreement between the consignor (vehicle owner) and consignee (sales agent).
DMV is responsible for licensing motor vehicle dealers. Neither of the two dealerships are currently licensed. The Suamico location was put on a conditional license on June 13, 2014. Revocation was recommended in 2016 once cases of consignment default were brought to DMV's attention.
DMV is responsible for titling vehicles. Cases brought to the attention of DMV involve consignment agreement default - which is a criminal activity. DMV is cooperating with state and federal authorities in a complex investigation, which may lead to criminal charges.
Because there is an ongoing criminal investigation, DMV must hold on releasing any records regarding this case. Once the information is available to share, the data will be released."
In the meantime, consignors waiting to get paid remain in the red, drivers of vehicles without titles are riding illegally and the last pieces of the puzzle have yet to be seen.
