Release 02-19      

April 16, 2002


Jerry Martin
(916) 322-2990

Richard Varenchik
(626) 575-6730
Grey Market Auto Ring Fined $1 Million

-- The California Air Resources Board (ARB) today announced it has won a judgement against several defendants for more than $1 million for selling vehicles not certified for the California market.

“This was a deliberate challenge to the health and well being of all Californians,” said ARB Executive Officer, Michael Kenny.

Kenneth Scheiler of Bug Motors, Steve Schneider of Redwood Auto Plaza, Mike Talebi, and Mark Fogel were found to have worked together to illegally sell in California Volkswagen (VW) Beetles originally manufactured for the Mexican market. From early 1997-1999, the defendants illegally imported, delivered, offered for sale and sold 138 Volkswagen Beetles originally produced for Mexico. These autos were not certified for sale in California as required by law.

The ARB discovered the problem after following up a call to report the sales. Bug Motors represented themselves as a remanufacturer of pre-1974 VWs, which are exempted from Smog Check. This decreased the chances of detection. In actuality, the autos were recently constructed for the Mexican market using the design of the 1974 model year.

The money from this case will go into California’s Air Pollution Control Fund (APCF), which is used to mitigate various sources of pollution throughout the state. The state uses this fund to educate the public and provide programs to minimize the output of smog forming emissions from various sources.

The Air Resources Board is a department of the California Environmental Protection Agency. ARB’s mission is to promote and protect public health, welfare, and ecological resources through effective reduction of air pollutants while recognizing and considering effects on the economy. The ARB oversees all air pollution control efforts in California to attain and maintain health based air quality standards.

The energy challenge facing California is real. Every Californian needs to take immediate action to reduce energy consumption. For a list of simple ways you can reduce demand and cut your energy cost, see our website at 

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