A former co-owner of a used car dealership, who was on the run in Iran for more than seven years, admitted in U.S. District Court in Norfolk, Va., Monday that he faked 61 Navy Federal Credit Union car loans worth more than $1.1 million.
Andysheh Ayatollahi, the former co-owner of the Car Store in Virginia Beach, Va., pleaded guilty to one felony count of conspiracy to commit financial fraud and one felony count of submitting a false federal tax return.
Although the fraud scheme occurred from July 2007 to May 2008, Ayatollahi was not arraigned on charges until January because he fled the country in 2008 for Iran. Officials said they are not sure why Ayatollahi, an American citizen who is of Iranian decent, returned to the U.S.
Federal agents arrested Ayatollahi in December 2015 at the Baltimore-Washington International Airport.
About a dozen other individuals, including employees and the business' other co-owner, Reza Azizkhani, were indicted in 2008 and 2009 and pleaded guilty to various offenses related to the fraudulent scheme.
Azizkhani pleaded guilty to witness tampering in 2009. He persuaded other employees to destroy fraudulent documents that were used in the used car loan applications soon after local police launched an investigation. Azizkhani was sentenced to 27 months in federal prison.
Ayatollahi was indicted in February 2010.
According to court documents, the former used car dealer and others used straw borrowers with poor credit to apply for loans for luxury used cars, such as models from BMW, Jaguar, Lincoln Navigator, Mercedes Benz and Lexus.
In addition to overstating a borrower's job income, Ayatollahi and other employees produced and submitted fake pay stubs and falsely reported other sources of income to the Vienna, Va.-based Navy Federal.
When Ayatollahi and other employees called Navy Federal, they impersonated the buyers who applied for the loans and gave the credit union fake phone numbers for the loan applicant's employer.
According to federal prosecutors, when credit union employees called whom they thought was the applicant's employer, they were in fact calling Ayatollahi or other employees at the used car dealership, who impersonated the employer and falsely verified the loan applicant's employment and wage information.
What's more, the car dealership inflated the true purchase price on buyer's orders that was submitted to Navy Federal, causing the credit union to approve loans in an amount that exceeded the purchase price. The dealership would then split this excess loan amount with the buyer, according to court documents.
Because most of the $1.1 million in car loans fell into default, Navy Federal posted a loss of $867,388.
Virginia Beach Police detectives began investigating the Car Store in March 2008 after receiving a tip about loan fraud.
When contacted Tuesday, Navy Federal declined to comment because the case remains in litigation.
Ayatollahi, who is in federal custody, is scheduled to be sentenced in July.
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