Office of the Attorney General News Release Archive


Tuesday, November 16, 1999

CORNYN SHUTS DOWN HOUSTON BUSINESSMAN

Action taken against Ali Yazdchi for criminal and fraudulent business practices

AUSTIN - Texas Attorney General John Cornyn and the Houston Police Department today announced the filing of a lawsuit against Ali Yazdchi in Harris County.

Houstonian Ali Yazdchi, who has used more than 60 aliases, was arrested yesterday by the Houston Police Department. The Attorney General's Consumer Protection Division simultaneously filed a lawsuit against Yazdchi, under the Deceptive Trade Practices Act, freezing all of Yazdchi's assets. The temporary restraining order obtained by the Attorney General's office prohibits Yazdchi from continuing his fraudulent business practices. "If you defraud consumers and involve yourself in shady business practices, we will shut you down,"Attorney General Cornyn said.

The Attorney General's lawsuit alleges that Yazdchi bought badly wrecked, theft-recovered and flood-damaged vehicles at various auctions and salvage yards in Texas. The defendant would then have the cars repaired so it was difficult to detect that the car had been previously damaged. Yazdchi would sometimes tamper with the odometer settings, rolling back the mileage.

The suit also alleges that Yazdchi then advertised the cars as being in excellent condition with low miles and one owner. After receiving a call from an interested consumer, Yazdchi, would arrange a meeting between himself and the consumer so the vehicle could be seen and test driven. Yazdchi would then tell the consumer that the car was owned by himself or a family member, and had never been wrecked or damaged. Consumers purchased cars from Yazdchi, only to discover later the automobile was formerly wrecked, salvage or rebuilt salvage.

The lawsuit alleges that Yazdchi has defrauded insurance companies, as well. The defendant would allegedly purchase a badly damaged, unrepaired luxury vehicle and transfer the title to one of his aliases or co-conspirators. He would then obtain a bank loan to "purchase" the vehicle in his own name. The bank would issue a cashier's check in the amount of the purchase, payable to the aliases or co-conspirator, and this money would end up in Yazdchi's bank account. He would refuse to carry insurance, forcing the bank to do so. After a few weeks he would report the car as stolen. The insurance company would then pay off the bank loan allowing Yazdchi to "keep" the original loan proceeds. Yazdchi would then have the car "cut up" for parts which he would later sell.

This case was handled by Assistant Attorney General John Owens, of the Attorney General's Consumer Protection Office in Houston.

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Contact Ted Delisi, Heather Browne, or Tom Kelley at (512) 463-2050