Number range CHAPTER**This is a declaration analyzing loss for cases
being sentenced under U.S.S.G. 2F1.1. This applies to offenses completed
before November 1, 2001. For offenses that continued or were completed
after November 1, 2001, use the U.S.S.G. 2B1.1 declaration.**

[DECLARATION OF ROBERT L. EPPES]{.underline}

Robert L. Eppes does hereby declare as follows:

1.  I am a Special Agent employed full time with the Odometer Fraud
    Staff of the National Highway Traffic Safety Administration
    (\"NHTSA\") of the United States Department of Transportation. I
    have been employed in this capacity (with varying titles) for nine
    years. My office is located in Kansas City, Missouri.

2.  As a Special Agent for the Odometer Fraud Staff of NHTSA, my duties
    and responsibilities include personally conducting investigations of
    odometer fraud rings, providing assistance to federal, state, and
    local law enforcement agencies engaged in similar investigations,
    and coordinating and developing odometer fraud countermeasure
    programs by state agencies. My area of responsibility includes 18
    states in the central portion of the United States, including Texas,
    Louisiana, Oklahoma, Arkansas, Tennessee, Alabama, Mississippi, New
    Mexico, Kansas, Missouri, Nebraska, Iowa, Indiana, Ohio, Illinois,
    Minnesota, Wisconsin, and Michigan.

3.  In fulfilling my responsibilities, I have frequent contact with
    several types of individuals familiar with particular aspects of
    odometer tampering. The types of people I encounter in this regard
    include other investigators and regulatory agencies investigating or
    attempting to prevent odometer tampering, individuals actively
    involved in odometer tampering, people who knowingly or innocently
    purchase vehicles which have been the subject of odometer tampering,
    consumers who have purchased cars the odometers of which have been
    rolled back, and individuals involved at all levels of the
    automobile wholesale business, including auctions, insurance
    companies, banks, fleet wholesale dealers and other fleet vehicle
    disposal agencies.

4.  I also attend annual meetings of the National Odometer and Title
    Fraud Enforcement Association, and attend, help organize, and speak
    at, annual meetings of other regional task forces engaged in
    combating odometer fraud. I have provided training to numerous
    federal, state, and local law enforcement and regulatory personnel
    regarding methods of combating odometer fraud. Both the national and
    regional meetings I refer to are attended by, among others, federal
    and state officials involved in enforcing odometer tampering
    statutes and other statutes and regulations related to odometer
    fraud and motor vehicle registration.

5.  As a result of the activities described above, I have become
    familiar with the problems encountered by people who purchase
    vehicles with rolled odometers. I have also spoken frequently with
    used car wholesalers and retail dealers regarding vehicles with
    rolled odometers.

6.  Section 2N3.1 of the United States Sentencing Commission Guidelines
    (\"U.S.S.G.\") provides that for odometer fraud, one should apply
    the \"Fraud and Deceit\" Guideline, 2F1.1 if more than one vehicle
    was involved in the offense, as in this case. Guideline 2F1.1
    requires than an \"amount of loss\" be determined for the offense.
    The method directed by the U.S.S.G. for cases of fraud involving
    misrepresentation of the quality of a consumer item is to compare
    the purchase price to the amount for which a consumer could resell
    the product received. [See]{.underline} Guideline 2F1.1, Application
    Note 7(a). In this case, that requires an estimation of the
    difference in value between consumer prices for apparent low mileage
    cars, and resale value of vehicles with rolled odometers whose
    actual mileage is not known. The records gathered in the
    investigation do not show the prices that all consumers paid for
    vehicles whose odometers were altered. However, the average retail
    sales price for a random sample of \[ \# \] cars that defendant sold
    with rolled odometers for which retail price was available was
    \[\$xxxxxxx\]. \[In addition, consumers on average paid \$xxxxxxx in
    finance charges for these cars, for a total payment of \$xxxxxxx.\]
    These prices \[and finance charges\] appear typical for the cars
    that defendant sold.

7.  I have discussed odometer rollback situations similar to this case
    with owners or other responsible individuals at a number of the
    firms which have unknowingly purchased cars with altered odometers
    from perpetrators of odometer fraud. They informed me that they
    would ordinarily not knowingly purchase a vehicle with an altered
    odometer. Certain firms indicated that they would purchase a vehicle
    with an altered odometer only at a greatly reduced price as a trade
    in, in order to complete the sale of another vehicle to the owner of
    the rolled-back vehicle. A number of firms that have sold vehicles
    with rolled-back odometers have also had to repurchase from
    consumers the vehicles sold with altered odometers, because the
    consumers did not want those vehicles. A consumer attempting to
    resell a vehicle with a rolled odometer, therefore, would be likely
    to obtain less than half of what he had paid for the vehicle.

8.  On the basis of the above, I believe that the loss per vehicle that
    consumers would suffer if they attempted to resell their vehicles
    would amount to at least 40 to 50% of the purchase price they paid
    for their cars. Since the average purchase price was \$xxxxxxx, this
    average loss would be \$xxxxxxx to \$xxxxxxx.

9.  This loss figure is based on an attempt to determine the loss per
    vehicle on resale. The resulting loss figure is reasonable, even if
    one examines losses people suffer if they do not sell these rollback
    vehicles. This is because there are several elements of damages that
    individuals suffer when they purchase a car the odometer of which
    has been altered. The damages begin with the purchase price and
    increase as time passes. The damages consumers suffer include the
    following:

> a\. Purchase price: The difference between the purchase price of a
> used car with accurate mileage, and the purchase price which is
> inflated by a false low mileage on its odometer.[^1]
>
> b\. Finance charges: Consumers pay finance charges on the portion of
> the higher price of a used car caused by the false low odometer
> reading.
>
> c\. Insurance costs: Frequently owners of vehicles with high mileage
> do not insure them for collision damage, while owners of lower mileage
> cars do carry such insurance. The false low mileage reading thus leads
> owners to pay more for insurance than they would if they knew the
> vehicles\' actual mileage. My attempts to determine the cost of
> collision insurance indicates that these costs could easily be \$200 -
> \$250 annually.
>
> d\. Repair costs: The difference in the purchase price of low and high
> mileage cars theoretically reflects, among other things, anticipated
> repair costs to vehicles with higher mileages. However, as a practical
> matter many high mileage vehicles suffer serious and expensive
> mechanical problems which are not reflected in purchase price
> differentials. Thus, owners of high mileage vehicles frequently suffer
> extraordinary costs to repair and maintain their vehicles that are not
> accounted for in differences in the cost of the vehicles, as described
> in paragraph \"a\" above.
>
> e\. Taxes: Car buyers commonly pay sales tax on the purchase price of
> their vehicles, and thereafter (in some jurisdictions which impose
> property taxes on motor vehicles) pay property taxes which are based
> in part on that purchase price. When the price of the vehicle is
> fraudulently inflated as the result of a rolled back odometer, the
> purchaser pays additional sales and property taxes beyond what he or
> she would pay if the odometer reflected the vehicle\'s actual mileage.
> The sales tax on an automobile in \[name of state where most cars
> sold\] is \_\_\_%.
>
> f\. Lost time: In addition to the actual cost of repairs, people
> suffer a loss of time associated with breakdowns and dealing with
> service personnel. They may also spend considerable amounts of time
> attempting to resolve the problems that arise with the seller if they
> realize they have purchased a vehicle with a rolled-back odometer. The
> costs of this lost time are real, including lost wages and the
> opportunity to spend time in other more productive pursuits.

10. I was the lead federal investigator in the case, [United States v.
    \[name of defendant\]]{.underline}. Based on all of the above
    factors, and on the type of cars that defendant purchased and sold,
    and the amount of the mileage rollbacks involved,[^2] I believe that
    an extremely conservative estimate of losses consumer suffered per
    vehicle, using the figures discussed in the previous paragraph, is
    \$4,000.

11. Because many elements of a motor vehicle wear out with use and
    mileage, rather than with years, there are dangers involved in not
    knowing the correct mileage on a motor vehicle. Congress noted this
    fact in passing the laws which I am charged with enforcing, linking
    \"an accurate indication of the mileage\" traveled by a motor
    vehicle to its \"safety and reliability\". 49 U.S.C. § 32701(a)(3).
    The brakes, front end suspension, steering, and drive line members
    are particularly subject to failure as the result of mileage.
    Because consumers of vehicles that have been the subject of odometer
    rollbacks are unaware of the true mileage on their vehicles, they
    are less likely than people with accurate odometers to provide
    proper maintenance to their cars, and the cars may therefore be
    subject to sudden failure. In many circumstances common in everyday
    driving, such a failure could cause serious injury or death not only
    to a driver and his or her passengers, but to others on the road or
    nearby.

12. My investigation revealed that \[name of defendant\] was responsible
    for rolling the odometers of approximately \[ \# \] vehicles (\_\_%
    of \[ \# \] vehicles). \[If necessary in a particular case, add: I
    derived this estimate as follows. In the course of this
    investigation, I learned that \[name of defendant\] used several
    bank accounts, several sources of financing (\"floorplanning\" in
    the jargon of the industry), and purchased and sold vehicles at
    various places. While the investigation revealed many of these
    accounts, floorplanners, and sources of vehicles, I do not believe
    that the investigation revealed all sources, or documentation, of
    vehicles defendant purchased. He purchased at least \[ \# \]
    vehicles which are recorded in documents gathered in the
    investigation. Based on the entire investigation, including
    interviews of defendant and his employees, I believe that he
    purchased and sold approximately \[ \# \] vehicles during the period
    \[state the relevant period\].\]

13. I also believe that \[name of defendant\] caused the rollback of
    approximately \_\_% of the vehicles he bought and sold. My office
    checked for mileage discrepancies on at least \[ \# \] vehicles that
    he sold. Either I or someone acting under my direct supervision
    conducted one of a variety of checks to determine whether or not the
    vehicles were sold with accurate mileage.[^3] These checks showed
    mileage discrepancies on \[ \# \] of the \[ \# \] vehicles, which is
    a \_\_% discrepancy or rollback rate.

I declare under penalty of perjury that the foregoing is true and
correct.

Executed on \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Robert L. Eppes

Special Agent

Odometer Fraud Staff

National Highway Traffic Safety Administration

United States Department of Transportation

[^1]: ^[?]{.underline}/^ This difference is reflected only in part in
    publications which list the value of used vehicles with varying
    amounts of mileage on them. Those publications are meant to compare
    low and high mileage vehicles with accurate odometers. In my
    experience, used car wholesalers and retailers for the most part do
    not want a vehicle the odometer of which has been altered (if it has
    to be sold with that fact acknowledged), and consumers simply do not
    want such a vehicle.

[^2]: ^[?]{.underline}/^ On average, defendant caused vehicle odometers
    to be rolled back approximately \[ \# \] miles, from \[ \# \] to \[
    \# \] miles. This is based on a group of \[ \# \] cars for which we
    have both high and low mileage figures.

[^3]: ^[?]{.underline}/^ The checks for mileage discrepancies were
    accomplished by comparing mileage available from state registration
    files or title histories showing mileage after defendant\'s
    organization sold the vehicles to other evidence of mileage on the
    vehicles before defendant acquired them. The comparisons were done
    by me or someone acting under my direct supervision. My office
    checked for \"pre-defendant\" mileage by examining documents
    obtained from persons who sold to defendant, or obtained from their
    financial institutions, mileages stored in a computer system used to
    track vehicle titles and mileages, other title history documents, or
    by orally contacting an owner prior to defendant to inquire as to
    the mileage at which the vehicle was sold to defendant. In all cases
    the identity of the vehicles were verified by \"VIN\", or vehicle
    identification numbers, which are unique to each vehicle.