Maryland brothers sentenced in odometer fraud scheme

Two Maryland brothers have been sentenced to federal prison for an odometer rollback scheme that defrauded used car buyers out of about $1.2 million, federal prosecutors said.

Kamal Khalid, 44, of Pasadena, was sentenced to three years in prison followed by three years of supervised release, according to the U.S. Attorney's Office. He pleaded guilty in May to conspiracy to commit securities fraud and securities fraud.

His younger brother, Fnu Shahrukh, 31, of Severna Park, pleaded guilty in April to conspiracy to commit securities fraud. He was sentenced to 18 months in prison.

Both men were ordered to pay roughly $1.2 million in restitution to their victims.

How the scheme worked

Between 2016 and 2019, prosecutors said the brothers bought high-mileage cars from auto auctions, rolled back the odometers to show lower mileage, and obtained new titles reflecting the fraudulent readings.

They then sold the altered vehicles through auctions and directly to consumers, often at inflated prices because buyers believed the cars had fewer miles.

"On average, the co-conspirators lowered the vehicles' mileages by 124,000 miles, resulting in consumers grossly overpaying for used vehicles near or past their expected lifespans," said Jonathan Morrison of the National Highway Traffic Safety Administration.

Risks to buyers

U.S. Attorney Kelly Hayes said the scheme left unsuspecting customers with unreliable cars.

"Khalid and his brother preyed on unsuspecting people simply looking to buy a reliable used car. But instead, these victims were deceived into purchasing vehicles that were well past their prime," Hayes said.

Morrison said odometer fraud does more doesn't just cost money, it also puts drivers at risk.

"Odometer fraud is a serious crime that not only costs consumers billions of dollars every year, but also makes our roads more dangerous," Morrison said. "Buyers were purchasing vehicles without knowing that critical components like brakes, belts, and fluids were long past their service dates."