Former Ferrari dealer charged with bank, bankruptcy fraud
Arraignment Sept. 7 in federal court
By Nathan R. Huff
The adage "you can run but you can't hide" came true for former Ferrari of Los Gatos owner Rex Brian Burnett, who was arrested on Aug. 21, for bankruptcy and bank fraud related to the exotic auto dealership.
The arrest comes six years after Burnett filed for Chapter 11 bankruptcy, after the dealership was shut down amid allegations of fraud and tax evasion.
Burnett was indicted on July 18, by a federal grand jury on one count of bankruptcy fraud for allegedly making false statements to the U.S. Bankruptcy Court in connection with Ferrari of Los Gatos' 1994 bankruptcy filing. The charges involved false promises regarding the delivery of new Ferraris.
On Aug. 22, Burnett was charged in a superseding indictment for six additional counts of bankruptcy fraud. Those charges center around a failure to report the sale of a $112,000 Ferrari during bankruptcy proceedings, and improperly using funds from Ferrari of Los Gatos for another business he owned and operated.
The investigation was conducted by agents of the FBI and IRS Criminal Investigations Division. Assistant U.S. Attorney Jane Shoemaker is prosecuting the case. Burnett will appear in federal court in San Jose on Sept. 7, for arraignment.
Burnett had avoided any charges relating to his loss of the dealership in 1994; however, the dealership itself continued to struggle. After being placed in the hands of a court-ordered trustee, the dealership struggled to make a profit due to limited inventory. In 1998 the court sold the troubled dealership for more than $1 million to Symbolic Motor Ltd., an exotic car dealership based in La Jolla.
However, before the finalization of the sale, Ferrari of North America (FNA), a company-backed dealer, filed a motion to block the sale of the dealership. FNA alleged that Symbolic Motor Ltd. president Marc Chase was unfit to take over the dealership, and that FNA needed to step in to repair what president Gian Luigi Longioutti Buitoni called "the catastrophic customer relations and legal difficulties" created by Burnett.
The court ruled for Chase, awarding Symbolic the dealership.
Los Gatos, California Since 1881
