Preview
FILED
DALLAS COUNTY
8/30/2019 8:14 AM
FELICIA PITRE
DISTRICT CLERK
I
DC-19-07459 Martin Reyes
CAUSE No.
CYRUS KHOSHROO § lN THE DISTRICT COURT
§
Plaintiff §
§
§
§
§ 95TH
VS. § ______ JUDlCIAL DISTRICT
§
UNITED AUTO CREDIT CORPORATION, §
RICHARD FLEESON, and KYLE MUSIL §
§
§
Defendants § DALLAS COUNTY, TEXAS
AFFIDAVIT OF CYRUS KHOSHROO
STATE OF TEXAS §
§
COUNTY OF DALLAS §
BEFORE ME on this day personally appeared CYRUS KHOSHROO, being known by
me, who after being duly sworn, upon his oath deposed and said:
1. “My name is CYRUS KHOSHROO. I am over 18 years of age, of sound mind,
and fully capable of making this Affidavit against United Auto Credit Corporation (“UACC”). I
am the Plaintiff in this action and have personal knowledge of the facts stated herein (and the
attached summary exhibit With my statements) and they are all true and correct”
SUMMARY OF RELIEF REQUESTED
“I know
2. that it is a chore t0 read all 0f this to consider a TRO. In short, I am very
upset that UACC has decided to defame me t0 my mother, at least two customers, and at least
one employee at my auto dealership (and called my father). UACC crossed the line when they
told all of them “fraud.” I don’t want UACC ever contacting my mother again because she does
not have any deal with them, she is down t0 one lung and suffering from cancer. I can show Via
transcripts 0f 2 voicemail messages and 2 texts that UACC sent t0 her cell phone that UACC told
her my brother and I are committing fraud, over $365,000 is owed, that we have violated the
law, that we Will be investigated by authorities, and that the FBI Will be called and I don’t think
that they have a right t0 say these false things merely t0 try and bully the auto dealership that I
manage into settling with them. I don’t know what this Court thinks about defamation per se, so
t0 play it safe I wanted t0 prove the prior statements are defamatory generally as stated and that
they are untrue and defamatory even as applied to UACC’s beliefs 0n its claims against the auto
dealership. I appreciate the Court’s patience in sorting this.
TABLE OF CONTENTS OF ATTACHMENTS
A. UACC contract that does not discuss any Carfax requirement;
B. CA UACC lawsuit;
C. Vehicle damage disclosure and requirement in specific instance only (not in original
contract or course 0f dealing);
D. Summary of Testimony 0n 23 V¢hicles showing statements are false;
E. Customer affidavits that they paid in store when debit card was used;
F. 11 vehicle extortion list, proof damages are capped at $ 3,500 and that UACC was
claiming fraud for vehicles it knew were damaged and retroactively applying Carfax
reports contrary t0 language in contract;
G. Affidavit 0f Co—employee Lori Duane —UACC discussed “fraud” in Dallas County, TX;
H. Affidavit of Rachel Houff (Customer) that UACC called and discussed fraud;
I. Loan condition of damage disclosure for 2 cars UACC later added to Exhibit F list;
J. List of at least 15 other vehicles With damage that UACC approved; and
K. Auto checks performed by UACC proving UACC used its own data for before loans were
approved and relied upon its own data (negating fraud and the right t0 defame me).
AFFIDAVIT OF CYRUS KHOSHROO 2
SPECIFICS 0F AFFIDAVIT
3. “This Affidavit is given in support of the Plaintiff’s Original Petition,
Application for Temporary Restraining Order and Injunctive Relief. I have read all 0f the facts
contained in Plaintiff’s Original Petition Application for Temporary Restraining Order and
Injunctive Relief and the Facts are Within my personal knowledge, true and correct.
“I work Dosk
4. at Investments, LLC, also known as 1800myautos.com. From that
location, I manage an office that assists with tax returns and purchases 0f automobiles. I have
been in the tax preparation business forever fifteen years and I have been in the auto dealership
business for over fifteen years. My name is Cyrus Khoshroo and I also go by Cyrus Shah to
honor my relatives because it is one 0f the names 0f my family. The auto business and tax
business are located in south Dallas and primarily deal with individuals Who have a FICO score
of less than 600. Generally, customers are purchasing used cars and the industry focused
on
providing loans t0 these customers is known as the sub prime auto loan industry. In the past,
dealerships that I have worked With make an agreement with one loan provider that tends to act
as the primary source 0f sub prime auto loans. Employees are trained in the process of meeting
with the customers and assisting in the loan application process, Which usually involves
transmitting information relating t0 the customer, such as their credit score and
paycheck stubs
and information relating t0 the vehicle, Which usually includes the vehicle identification number
0r VIN.
DISCUSSION OF HOW AUTO LOANS ARE PROCESSED WITH UACC
5. 1800myautos.com entered into an agreement with UACC whereby UACC agreed
to review and approve, reject, 0r change basic auto loan offers/terms after receiving information
about the auto loan applicant and description sufficient to identify the vehicle
(usually A VIN).
A true and correct copy 0f the agreement between UACC and 1800myautos.com is attached as
AFFIDAVIT OF CYRUS KHOSHROO 3
Exhibit A. After a VIN and loan application is sent to UACC, the 1800myautos.com employee
and potential loan customer wait until UACC approves, rejects, 0r modifies loan terms. If a loan
is rejected, the customers is encouraged t0 consider other auto loan sources and the vehicle is
frequently is not sold. If the loan is approved on standard terms, the customer usually makes
payment arrangements, signs the loan documents, and leaves with the vehicle.
6. One 0f the considerations that UACC has in determining whether t0 offer a loan
t0 an individual is the customer information; another is the VIN. In the agreement between
1800myaut0s.com and UACC, there is n0 requirement that 1800myautos.com make any
representation as to the quality 01‘ prior history of the vehicle. For example, there is a company
named “Carfax” that provides information regarding vehicles (prior wrecks, insurance
claims,
repair history, use as a rental car, auction sales, etc.) for a fea. In prior dealings
With other sub
prime loan providers, some financial institutions required that 1800myautos.com provide a
vehicle history report, such as a Carfax and some have When
not. representatives of UACC
came from their Tarrant County office and solicited business from 1800myautos.com, one 0f
their main selling points is that 1800myautos.com did not have t0 pay for and provide copies of
Carfax reports because UACC had its own proprietary system of taking a VIN number and
gathering its own data on the history of a vehicle. What this meant cost wise is that the auto
seller could save about $ 3O 0r more per vehicle by not being required to order, gather, and
maintain up to date Carfax reports every time that a prospective car purchaser decided t0
apply
for auto loans with the financial institu‘tion 0f UACC. UACC toted the relaxing of the need of a
Carfax report as a reason why using its loan services would be more attractive to the loan
customer and dealership and would make its loan packages competitive with other providers of
sub prime auto loans that did not require the additional expense. Representatives 0f UACC
said
that it collects its own data on vehicles, called internally, “auto checks” and that UACC would
AFFIDAVIT OF CYRUS KHOSHROO 4
review the results of matching a VIN with the auto check to see if there was something else that
came up in the history 0f the vehicle that would make the vehicle ineligible for a loan 0r require
UACC t0 offer a more expensive loan, 0r a lower amount up front for the vehicle, because the
vehicle was more likely t0 be worth less than a similar vehicle without the blemish in its overall
vehicle history. The basic concepts is that a vehicle with documented damage and repair (such
as a wreck) is more likely t0 have future expenses and problems than an identical make, model,
and mileage vehicle without the same incident.
UACC LOANS APPLICATIONS WERE MADE BECAUSE THEY DID NOT
REQUIRE A $ 30 EXPENSE FOR A CARFAX; UACC RAN ITS OWN ‘AUTO
CHECK’
7. 1800myautos.com was sold on UACC’S sales pitch, which included the fact that
the dealership was not going to be required to order an up to date Carfax as a requirement 0f the
loan application, potentially saving $ 3.0 more per loan application over time (whereas not every
loan applicant has the credit history and proof 0f income to qualify for
every vehicle that they
may want t0 purchase). Not only did UACC not require a Carfax (as was common for many 0f
the sub prime auto loan providers), but UACC said it would rely upon the auto Check and any
other due diligence that it performed to make an overall assessment 0f the value 0f the vehicle
and the ability t0 underwrite a loan for the loan applicant. A true and correct copy of the auto
checks (showing that UACC used its own data When processing loans and relying upon
statements relating to vehicle history) for these vehicles is attached as Exhibit K. What this
means as a bottom line 1's
that UACC was incapable of relying on any reprasenta‘cions or
misrepresentations relating to the history 0f a vehicle that 1800myautos‘com made because
1800myautos.com never warranted anything specific about the vehicle. 1800myautos.com did
not review or submit Carfax documents. as part of the loan application
process (just customer
AFFIDAVIT OF CYRUS KHOSHROO 5
information and VINs) and instead ISOmeautos.com relied upon its own business acumen, its
internal “auto Check” and any other information that chose review 0r not review
it t0 in its own
due diligence process.
8. 1800myautos.com has n0 input as t0 what information is recorded 0n UACC’S
auto Check or what information is contained in a Carfax. Both of those data sets are maintained
by third parties and 1800myaut0s‘com did not submit auto checks or Carfax reports t0 UACC, so
it was also incapable 0f deleting information from those reports.
9. Additionally, by relieving 1800myautos.com of the requirement 0f sending and
reviewing Carfax reports, UACC had the option 0f either choosing t0 review Carfax reports and
buy a higher volume discounted higher Ivolume subscription t0 the service 0r not. UACC was
aware 0f the existence 0f Carfax reports and chose to rely only upon its own auto checks in its
due diligence/loan underwriting decision making. As a matter oflaw, if UACC is complaining
that the Carfax report indicates additional negative vehicle history information
than the auto
check that it chose t0 rely upon, UACCcannot attribute fraud to me, my brother, or
1800myautos.com from its decision to-vehicle without the If the vehicle history rely upon its
own auto check information in making a decision t0 offer a vehicle loan or to modify a vehicle
loan request and charge a greater rate for the loan (0r advance less money 0n the vehicle).
SUMMARY REGARDING UACC’S FLAWED THEORY OF “CARFAX FRAUD”
10. Since there is a lot t0 read, I wanted to summarize that (1) some auto loan
providers require a Carfax as a condition 0f a loan application and some do not ~ UACC got the
contract With 1800myautos.com because it did not require a Carfax report t0 be bought on each
loan application; (2) 1800myautos.com'did not separately have Carfax reports on these
vehicles;
(3) the loan application process involved submitting customer information and a VIN —
1800myautos.com did not make other representations regarding the prior history 0f the car 0r its
AFFIDAVIT OF CYRUS KHOSHROO 6
condition (and cars were sold “as is”); (4) UACC ran its own search (called an auto check) and
relied upon its own data t0 make loan decisions; (5) UACC frequently charged more for loans for
damaged cars based 0n its auto check; (6) UACC retroactively, many months later, decided to
pay for Carfax reports on cars and accuse 1800myautos.com of fraud because its “auto check”
system did not contain the same data as the Carfax; (7) UACC has even tried t0 extort
1800myautos.com for cars Claiming “Carfax fraud” When there is a documented history of
UACC commenting on the defects of certain cars before a loan is approved, and so,
consequently, UACC relied upon its own information and cannot tell third parties that
1800myautos.com committed “fraud” merely because UACC asserts a flawed “Carfax fraud”
theory t0 try and extort us for money.
CONTINUATION 0F NARRATIVE TESTIMONY
11. It is deceptive and slanderous to accuse me, my brother, and 1800myautos.com of
fraud based upon the fact that UACC’s auto check did not contain the same data as a third party
independent Carfax because 1800myautos.com does not generate either report and cannot
control
the results of either report.
12. UACC did not require 1800myautos.com to submit a Carfax, chose not t0 review
Carfax reports in its own, and did not have the right to tell customers 0f 1800myautos.com, my
relatives, and employees of 1800myautos.com that I am committing fraud based upon data that it
found on Carfax reports.
13. I am seeking a TRO against UACC t0 prevent it from contacting my relatives,
employees, and car customers and telling them false information about me, my brother, and
1800myautos.com. Similarly, I am requesting that the Court issue a similar order instructing
UACC not t0 lie and tell my employees and customers thatI am committing fraud (but I am not
seeking any other restriction 0n UACC as t0 what it might ordinarily due t0 collect 0n its auto
AFFIDAVIT OF CYRUS KHOSHROO 7
loans with its loan customers).
14. Because my brother owns the auto dealership and I manage the auto dealership,
statements that 1800myautos.com is “committing fraud” or “Violating the law” are effectively
statements that I am committing fraud 0r that I am Violating the law.
TESTIMONY DEALING WITH ISSUE THAT PLAINTIFF’S MOTHER HAS NO
PRIVITY OF CONTRACT WITH UACC, IS RECOVERING FROM CANCER
(HAS ONE LUNG), AND UACC SEPARATELY SOUGHT OUT HER CELL
PHONE NUMBER AND TOLD HER SHE SHOULD BE CONCERNED (AS
WELL AS COPIES OF DEFAMATORY STATEMENTS).
15. It is important t0 testify as to the defamatory statements that UACC made to my
mother, Mahin Masounmaliazadeh. Both my mother and father (divorced) live in separate
residences in North Texas. I did not give UACC permission to discuss any part of my life with
my mother. My brother, Soheil Khoshroo did not give UACC any permission t0 discuss any part
0f his life With UACC. To verify this, one can double Check with the Dealer Agreement with
UACC, which is attached as Exhibit A. A careful review of the Dealer Agreement between
UACC and 1800myautos.com reveals that no one provided the contact information for my
mother (Mahin Masounmaliazadeh) or her name in the documents. Contact numbers were sent
in the Dealer Agreement for me, Soheivihoshroo, and 1800myautos.com. My mother’s name is
not mentioned on the Dealer Agreement and my mother is not a guarantor of any loan 0r contract
with regards t0 UACC. The same is true with regards to contact information for my father.
16. Without deliberate action, UACC did not have access to a phone number for my
mother or father. At some point, represéntatives or agents 0f UACC had t0 make a deliberate
decision to find a good phone number for my mother and communicate false statements
regarding me, my work (1 800myautos.corn), and my brother, Soheil Khoshroo. My mother has
AFFIDAVIT OF CYRUS KHOSHROO 8
spoken to me several times and is very distraught about what is going on. T0 say the least, she
has told me that representatives of UACC have said that my brother and I broke the law, that we
are committing fraud, and that they are going t0 get the authorities involved if we d0 not make
arrangements t0 pay them what they want.
17. I am now going t0 testify about the representations by UACC t0 my mother that I
am asking the Court to order injunctive relief to stop the false communications. Before the four
statements 0f texts/voicemail messages below, my mother was called by Marlina Batista 0f
UACC and Marlina spoke With her forr a while saying that Marlina knew that my brother was a
doctor and that: his credit could be hurt.
BEGINNING 0F TESTIMONY RELATING TO FOUR VERIFIABLE
COMMUNICATIONS (TEXTS AND VOICEMAIL MESSAGES) THAT WERE
SENT TO MOTHER’S CELL PHONE THAT CONSTITUTED DEFAMATION
OF PLAINTIFF AND PLAINTIFF’S BROTHER
18. I know that the testimony regarding the specific statements made by UACC is
accurate because the statements were recorded in voicemails and text messages. Here is the
exact copy of four statements from Defendants. The first two statements are from voicemail
messages. Notice that Marlina from UACC also identifies my mother by name and mentions
that she is discussing my mother’s sons. Here is a true and correct copy 0f the voicemail
message (typed verbatim), which were follow ups after the discussion With my mother which
went into many of the details below, which I have listened to as well:
“Hi Mahin (name of mother), this is Marlina calling with United Auto Credit
reaching out to you in regards to your son, Saheil Khoshroo, the owner of the
dealership 1800myautos.com out in Dallas, Texas. Please let him know that it is
urgent that he gets in contact with our office today. We are suing him for 23
AFFIDAVIT OF CYRUS KHOSHROO 9
accounts, that’s a lot of money. |
can’t get Cyrus on the phone, | know that Cyrus
runs the auto dealership, but he has no interest in trying to help his brother out,
trying to get this resolved. So maybe you being his mother wiH be more
concerned. So you can have give us a call today at 844-709-4898. My
extension is 1418. Thank you, goodbye.”
19. The second voicemail message left with my mother also identified her by name.
This is a true and correct copy 0f What was said (typed verbatim), Which I listened to as well:
“Hi Mahin, this is Marlena. am
| calling with United Auto Credit with regards to
your son, Soheil Khoshroo, the owner of the dealership 1800myautos.com. They
are located on Beckley in South Dallas, Texas. Please let him know that it is
urgent that he get in contact with us today. It is in regards to the lawsuit that we
filed against him and it is for 23 accounts, that is a lot of money that he owes us.
My number is 844-709-4898. My extension is 1418. Thank you. Goodbye.”
20. These two communications to my mother Via voicemail messages were followed
up with a very long text that was also sent t0 my mother in Which was I accused of Violating the
law, fraud, and it was suggested that my brother and I needed t0 contact UACC because law
enforcement was going t0 get involved, which resulted in my mother asking me if I broke the
law or committed fraud. I know that this is a true and correct copy 0f the correspondence,
because we “cut and copied” the text that was sent to my mother:
“Good afternoon. I’m unsure Which 0f these numbers belongs to Sohiel, but I do hope
that at least one of the #s does. My name is Mr. Fleeson. I work for United Auto Credit.
AFFIDAVIT OF CYRUS KHOSHROO 10
My Company filed a lawsuit against you in Orange County Superior Court for
3 365,83 1 .89‘ My company has made several attempts t0 contact you. My company has
made several attempts to contact you personally. Dealer Compliance rep have attempted
to contact you at your job, they have called family. My dealer compliance reps have
spoken t0 Cyrus multiple times and he has hung up 0n them. Either your (sic) not getting
any messages 0r you are burying your head in the sand and pretending this isn't
happening. You have 23 buybaéks. I have been asked t0 either collect or see what other
directions we can g0 with this. I have only investigated 5 of the 23 accounts as of now. I
investigated the 5 more delinquent. These 5 (sic) was enough for me to know I can prove
fraud and enough to know I laws have been broken. The same credit card/ debit card was
used t0 make payments on 4 of these 5 accounts. While I believe Cyrus runs the
dealership please understand this. You signed the dealer agreement, you signed the
personal guarantor, your name is attached the bank account in which United Auto Credit
did ACH deposits. You are the one that owns property that I will take a closer 100k at
once we get our judgement (sic), it is your bank accounts Iwill be looking t0 garnish,
your pay check I will 100k to garnish. I can tell you I don't have the ability to see who's
name is 0n the card ending 6555, the law enforcement agency I get involved in this 0f
course will. If 4 0f the 5 account have gotten payments from this card so car What are the
chances that a lot more 0f the 18 remaining accounts for me to 100k at Will also have
payments from that card? Point is, you might want to get your head out of the sand and
get this resolved. 949 224 1917 X 2495.”
21. Since the time 0f the receipt of the last text, I received a call from Fleeson, who
works for UACC and stated that he knew that he contacted my mother and directed
communications t0 her regarding me and my brother.
AFFIDAVIT OF CYRUS KHOSHROO 11
SLANDEROUS STATEMENTS RELATED TO “FRAUD,” BECAUSE LOAN
CUSTOMERS AND 1800MYAUTOS.COM WERE NOT REQUIRED TO AND
DID NOT PROVIDE CARFAX REPORTS ARE FALSE; RETROACTIVELY
REVIEWING THE CARFAXV REPORT WITH THE AUTO CHECK THAT
UACC CHOSE TO RUN AND RELY UPON AT THE TIME OF THE LOAN
(AND THE DECISION TO NOT REVIEW OR REQUIRE A CARFAX AS A
CONDITION OF THE LOAN) CANNOT BE A TRUTHFUL BASIS FOR
TELLING THIRD PARTIES THAT PLAINTIFF COMMITTED FRAUD.
A. UACC DID NOT REQUIRE 1800MY AUTOS.COM OR LOAN CUSTOMERS
TO SUBMIT CARFAX REPORTS, UACC COULD HAVE DONE SO, AND
UACC COULD HAVE PAID FOR ITS OWN CARFAX REPORTS PRIOR TO
OFFERING A LOAN.
22. In the context of facts needed t0 prove that neither I, my brother Sohefl, nor
1800myautos.com committed fraud as alleged by UACC, it is important to document that in the
context 0f how the vehicle loans were processed, UACC Chose t0 View its own auto checks, did
not require 1800myautos.com to submit any Carfax reports, and then made its own decision
whether t0 view any Other vehicle history information before accepting the loan, rejecting the
loan, or making the loan more expensive for the customer for t0 take the loan because of the
history of the vehicle. Because n0 one (neither my brother, nor me, nor 1800myautos.com) was
required to provide Carfax reports as condition 0f the loan application, we were incapable 0f
defrauding UACC. Since UACC.had its own auto check system and could choose t0 also look at
other third third party vehicle history reports (such as a Carfax) before making a decision 0n a
AFFIDAVIT OF CYRUS KHOSHROO 12
loan application, it is not true t0 say that me, my brother, or 1800myautos.com defrauded UACC
merely because UACC later read a Carfax report and it differed from UACC’S own autocheck.
B. UACC FREQUENTLY ACCEPTED MANY OTHER VEHICLES FOR
AUTO LOANS EVEN WHEN THE VEHICLE HAD A CONDITION THAT
UACC SAID THAT IT USAULLY WOULD NOT ACCEPT FOR A LOAN.
23. Additionally, when UACC first approached 1800myautos.com about the
possibility of getting a majority of its customers t0 try loan applications With UACC,
1800myautos.com expressed concern that sub prime auto loan vehicles typically had a Checkered
past and they are not the ideal cars for all loan providers and UACC’S representative specifically
stated that UACC was willing t0 provide loans 0n many cars that had a history 0f other
problems, as long as the customer’s earfiings were enough to make the payments. Attached as
Exhibit J is a true and correct copy of a list of at least 15 other vehicles that UACC approved for
a loan when a car had a prior issue (wreck, damage, use as a rental car, etc.) and those loans were
approved by UACC and did not make it to the CA lawsuit and yet somehow UACC picked these
other cars for the CA lawsuit and called it fraud. Surely, the difference in those transactions and
UACC accusing me t0 third parties 0f fraud in this situation is not just that UACC’s auto check
matched up with the Carfax report. The course of dealing between UACC and
1800myautos.com involves hundreds of cars. There are at least these 15 other instances whereby
UACC accepted a customer’s loan application for vehicles that had a less than desirable prior
history (Le. sale at auction, prior wreck, used as a rental, etc.) UACC knew about the checkered
history 0n the front end, charged the customer more for the loan, advanced 1800myautos.com
less for the loan, and did not include these cars in its lawsuit. Just like the cars is sued over,
UACC had a chance to pay for a Carfax and did not require us t0 d0 so and did not do so then ~—
it will not prevail 0n case 0f fraud based upon retroactively purchasing and cross checking
AFFIDAVIT OF CYRUS KHOSHROO 13
Carfax reports and it similarly did not have a right to tell me customers, relatives, and employees
thatI am committing fraud.
C. UACC CHOSE TO USE ITS OWN SYSTEM OF “AUTO CHECK” TO
CHECK THE VEHICLE CONDITION HISTORY AND CANNOT TELL
THIRD PARTIES THAT PLAINTIFF COMMITTED FRAUD MERELY
BECAUSE ITS OWN SYSTEM OF LOAN UNDERWRITING CONTAINED
INFORMATION THAT WAS DIFFERENT FROM A CARFAX REPORT.
24. What this means with regards to the statements sent in the text relating t0 “fraud”
is that the allegations were untrue. If UACC was presented With a correct vehicla VIN and
truthful information regarding the customer’s credit (provided
by the customer), ran its own auto
check and made a decision, after reviewing vehicle history reports (that were not provided by or
altered by 1800myautos.com) to charge even more money for the loan as an additional risk
premium, than UACC knew about the condition of the car from the vehicle history report and
chose t0 charge more for the loan, meaning that “fraud” or failing to disclose a material fact
known at the time, was impossible as alleged.
D. SINCE UACC GOT PLAINTIFF’S LOAN APPLICATION CUSTOMERS
BY DIFFERENT LOAN UNDERWRITING FEATURES, SUCH AS NOT
REQUIRING THE LOAN CUSTOMER OR 1800MYAUTOS.COM TO
PURCHASE AN UP TO DATE CARFAX, BOTH UACC AND PLAINTIFF
AGREED THAT A CARFAX REPORT WAS NOT NEEDED TO BE
SUBMITTED AND THE CONTENT 0F A CARFAX REPORT NOT
ORDERED CANNOT BE THE BASIS FOR SLANDERING PLAINTIFF AND
ACCUSING HIM OF FRAUD.
25. I am the manager of 1800myautos.com and I have personal knowledge 0f how the
AFFIDAVIT OF CYRUS KHOSHROO 14
loan application process occurred, Which I supervised. I know that 1800myautos.com, myself,
and Soheil conducted ourselves properly and did not commit fraud; specifically, I deny that any
vehicle loan application occurred whereby anyone from 1800myautos.com altered a vehicle
history report that 1800myautos.com received. As a general rule 0f thumb, 1800myautos.com
simply did not order 0r submit Carfax reports 0r other vehicle history reports as a part 0f the
customer’s loan application process at all.
E. IN MANY INSTANCES THE CLAIMS OF UACC’S LAWSUIT, THE
ALLEGATION OF FRAUD IS UNTRUE BECAUSE UACC BEGAN
REQUIRING CUSTOMERS TO SUBMIT VEHICLE DAMAGE REPORTS
AS A CONDITION OF THE LOAN, WHICH PLAINTIFF COMPLIED WITH,
AND THE ACTUAL DISCLOSURE OF THE DEFECT PREVENTS
ALLEGATIONS OF FRAUD (AND THE RIGHT TO TELL THIRD PARTIES
THAT PLAINTIFF IS COMMITTING FRAUD).
26. To understand that the claim 0f fraud is untrue in a more detailed form, I have
attached a true copy of the lawsuit filed by UACC against 1800myautos.com alleging the fraud
as Exhibit B. In the paragraphs 31 to S3 of the lawsuit, UACC complains in detail that for 22 0f
the 23 cars that they sued over that fraud was committed because 1800myautos.com got UACC
t0 offer car loans on vehicles that had a less than immaculate vehicle history report. Dealing
with the allegations with these 22 cars, first (and then we can deal With the other car in
addressing their other allegation 0f “fraud” with regards t0 some of the vehicles, t0 cover all
discussions of the meaning of the term), an audit and review 0f each of the 22 instances whereby
UACC offered a loan 0n these 22 vehicles based upon the customer information, VIN, and auto
checks that were conducted by UACC from its own means 0f evaluating a vehicle’s history. I
reviewed the audits 0n these and UACC had the opportunity t0 approve 0r reject the loan based
AFFIDAVIT OF CYRUS KHOSHROO 15
upon the disclosure of the auto check as provided by UACC, not 1800myautos.com. These files
did not contain a Carfax in them and n0 Carfax was submitted by 1800myautos.com because it
was not a requirement of the customer’s loan application. T0 retroactively make a decision that
UACC should have checked the Carfax'instead 0f relying upon its own auto Check and then to
tell third parties (my mother, my customers, and my fellow co workers) that I am engaging in
fraud is deceitful, untrue, and does not even legally constitute fraud by its definition, since
neither I nor 1800myautos.com submitted 0r altered Carfax reports as part 0f the loan process.
27. Additionally, I reviewed'the audits 0f these 22 of the 23 accounts where this
complaint of fraud was made by UACC and in many of these auto loans, a premium was charged
for the loan (Le. an additional $ 2,000 on the loan), because of the histow of the vehicle,
meaning that more money was charged for the loan than was requested in the loan application
and it was charged afterwards because of the vehicle history report. For example, 0n paragraph
31 of the lawsuit in California, it is alleged that for VIN ending in 1881 (Chevy Camaro), that
there was some sort of fraud that the vehicle damage was not reported to UACC, however, a
review of the documents submitted t0 UACC reveals that a “Motor Vehicle Damage Disclosure
Form” was separately signed by the loan applicant and that UACC knew this when the file
printout shows that it approved a loan in the amount of $ 23,221.08 and only provided a net
check 0f $ 18,946 t0 cover it (meaning that it Charged several thousand dollars more for this loan
at an APR of 20. 10%). A true and correct copy 0f the Motor Vehicle Damage Disclosure Form
and a true and correct copy 0f the loan printout for this car is attached as Exhibit C.
CLAIMS RELATED TO “FRAUD” BASED UPON WHETHER THE
CUSTOMERS MADE THE PAYMENTS ON THE CARS ARE ALSO FALSE
(“PAYMENT FRAUD”); THE MERE USE OF A CREDIT CARD ASSOCIATED
WITH PLAINTIFF IS NOT EVIDENCE OF FRAUD IN THE INSTANCES
AFFIDAVIT OF CYRUS KHOSHROO 16
WHERE THE RECEIPT BOOKS AND CUSTOMER AFFIDAVITS
ESTABLISHED THAT THE CUSTOMER ACTUALLY MADE THE BASIS (AND
MOST USED CAR LOT CUSTOMERS ARE ACCUSTOMED TO A “BUY HERE,
PAY HERE” WAS OF DOING BUSINESS AND DO NOT HAVE CHECKING
ACCOUNTS), AND SO THE STATEMENT IN THE TEXT THAT A REVIEW OF
4 OF 5 INSTANCES OF DEBIT CARD PAYMENTS SHOWED FRAUD IS
FALSE AND DEFAMATORY.
SUMMARY OF TESTIMONY THAT THERE WAS NOT PAYMENT FRAUD IN
4 OF THE 5 INSTANCES EXAMINED, AS STATED BY UACC IN ITS TEXTS
28. I included as Exhibit D a summary 0f testimony of the 23 vehicles that subject to
the CA lawsuit and numbered them the same way they are numbered in the CA Lawsuit. I am
also testifying in that chart and had it attached t0 my affidavit when notarized because I am also
affirming that those statements are true (it is easier to have the testimony summarized in one
place). I think tha
Preview
FILED DALLAS COUNTY 8/30/2019 8:14 AM FELICIA PITRE DISTRICT CLERK I DC-19-07459 Martin Reyes CAUSE No. CYRUS KHOSHROO § lN THE DISTRICT COURT § Plaintiff § § § § § 95TH VS. § ______ JUDlCIAL DISTRICT § UNITED AUTO CREDIT CORPORATION, § RICHARD FLEESON, and KYLE MUSIL § § § Defendants § DALLAS COUNTY, TEXAS AFFIDAVIT OF CYRUS KHOSHROO STATE OF TEXAS § § COUNTY OF DALLAS § BEFORE ME on this day personally appeared CYRUS KHOSHROO, being known by me, who after being duly sworn, upon his oath deposed and said: 1. “My name is CYRUS KHOSHROO. I am over 18 years of age, of sound mind, and fully capable of making this Affidavit against United Auto Credit Corporation (“UACC”). I am the Plaintiff in this action and have personal knowledge of the facts stated herein (and the attached summary exhibit With my statements) and they are all true and correct” SUMMARY OF RELIEF REQUESTED “I know 2. that it is a chore t0 read all 0f this to consider a TRO. In short, I am very upset that UACC has decided to defame me t0 my mother, at least two customers, and at least one employee at my auto dealership (and called my father). UACC crossed the line when they told all of them “fraud.” I don’t want UACC ever contacting my mother again because she does not have any deal with them, she is down t0 one lung and suffering from cancer. I can show Via transcripts 0f 2 voicemail messages and 2 texts that UACC sent t0 her cell phone that UACC told her my brother and I are committing fraud, over $365,000 is owed, that we have violated the law, that we Will be investigated by authorities, and that the FBI Will be called and I don’t think that they have a right t0 say these false things merely t0 try and bully the auto dealership that I manage into settling with them. I don’t know what this Court thinks about defamation per se, so t0 play it safe I wanted t0 prove the prior statements are defamatory generally as stated and that they are untrue and defamatory even as applied to UACC’s beliefs 0n its claims against the auto dealership. I appreciate the Court’s patience in sorting this. TABLE OF CONTENTS OF ATTACHMENTS A. UACC contract that does not discuss any Carfax requirement; B. CA UACC lawsuit; C. Vehicle damage disclosure and requirement in specific instance only (not in original contract or course 0f dealing); D. Summary of Testimony 0n 23 V¢hicles showing statements are false; E. Customer affidavits that they paid in store when debit card was used; F. 11 vehicle extortion list, proof damages are capped at $ 3,500 and that UACC was claiming fraud for vehicles it knew were damaged and retroactively applying Carfax reports contrary t0 language in contract; G. Affidavit 0f Co—employee Lori Duane —UACC discussed “fraud” in Dallas County, TX; H. Affidavit of Rachel Houff (Customer) that UACC called and discussed fraud; I. Loan condition of damage disclosure for 2 cars UACC later added to Exhibit F list; J. List of at least 15 other vehicles With damage that UACC approved; and K. Auto checks performed by UACC proving UACC used its own data for before loans were approved and relied upon its own data (negating fraud and the right t0 defame me). AFFIDAVIT OF CYRUS KHOSHROO 2 SPECIFICS 0F AFFIDAVIT 3. “This Affidavit is given in support of the Plaintiff’s Original Petition, Application for Temporary Restraining Order and Injunctive Relief. I have read all 0f the facts contained in Plaintiff’s Original Petition Application for Temporary Restraining Order and Injunctive Relief and the Facts are Within my personal knowledge, true and correct. “I work Dosk 4. at Investments, LLC, also known as 1800myautos.com. From that location, I manage an office that assists with tax returns and purchases 0f automobiles. I have been in the tax preparation business forever fifteen years and I have been in the auto dealership business for over fifteen years. My name is Cyrus Khoshroo and I also go by Cyrus Shah to honor my relatives because it is one 0f the names 0f my family. The auto business and tax business are located in south Dallas and primarily deal with individuals Who have a FICO score of less than 600. Generally, customers are purchasing used cars and the industry focused on providing loans t0 these customers is known as the sub prime auto loan industry. In the past, dealerships that I have worked With make an agreement with one loan provider that tends to act as the primary source 0f sub prime auto loans. Employees are trained in the process of meeting with the customers and assisting in the loan application process, Which usually involves transmitting information relating t0 the customer, such as their credit score and paycheck stubs and information relating t0 the vehicle, Which usually includes the vehicle identification number 0r VIN. DISCUSSION OF HOW AUTO LOANS ARE PROCESSED WITH UACC 5. 1800myautos.com entered into an agreement with UACC whereby UACC agreed to review and approve, reject, 0r change basic auto loan offers/terms after receiving information about the auto loan applicant and description sufficient to identify the vehicle (usually A VIN). A true and correct copy 0f the agreement between UACC and 1800myautos.com is attached as AFFIDAVIT OF CYRUS KHOSHROO 3 Exhibit A. After a VIN and loan application is sent to UACC, the 1800myautos.com employee and potential loan customer wait until UACC approves, rejects, 0r modifies loan terms. If a loan is rejected, the customers is encouraged t0 consider other auto loan sources and the vehicle is frequently is not sold. If the loan is approved on standard terms, the customer usually makes payment arrangements, signs the loan documents, and leaves with the vehicle. 6. One 0f the considerations that UACC has in determining whether t0 offer a loan t0 an individual is the customer information; another is the VIN. In the agreement between 1800myaut0s.com and UACC, there is n0 requirement that 1800myautos.com make any representation as to the quality 01‘ prior history of the vehicle. For example, there is a company named “Carfax” that provides information regarding vehicles (prior wrecks, insurance claims, repair history, use as a rental car, auction sales, etc.) for a fea. In prior dealings With other sub prime loan providers, some financial institutions required that 1800myautos.com provide a vehicle history report, such as a Carfax and some have When not. representatives of UACC came from their Tarrant County office and solicited business from 1800myautos.com, one 0f their main selling points is that 1800myautos.com did not have t0 pay for and provide copies of Carfax reports because UACC had its own proprietary system of taking a VIN number and gathering its own data on the history of a vehicle. What this meant cost wise is that the auto seller could save about $ 3O 0r more per vehicle by not being required to order, gather, and maintain up to date Carfax reports every time that a prospective car purchaser decided t0 apply for auto loans with the financial institu‘tion 0f UACC. UACC toted the relaxing of the need of a Carfax report as a reason why using its loan services would be more attractive to the loan customer and dealership and would make its loan packages competitive with other providers of sub prime auto loans that did not require the additional expense. Representatives 0f UACC said that it collects its own data on vehicles, called internally, “auto checks” and that UACC would AFFIDAVIT OF CYRUS KHOSHROO 4 review the results of matching a VIN with the auto check to see if there was something else that came up in the history 0f the vehicle that would make the vehicle ineligible for a loan 0r require UACC t0 offer a more expensive loan, 0r a lower amount up front for the vehicle, because the vehicle was more likely t0 be worth less than a similar vehicle without the blemish in its overall vehicle history. The basic concepts is that a vehicle with documented damage and repair (such as a wreck) is more likely t0 have future expenses and problems than an identical make, model, and mileage vehicle without the same incident. UACC LOANS APPLICATIONS WERE MADE BECAUSE THEY DID NOT REQUIRE A $ 30 EXPENSE FOR A CARFAX; UACC RAN ITS OWN ‘AUTO CHECK’ 7. 1800myautos.com was sold on UACC’S sales pitch, which included the fact that the dealership was not going to be required to order an up to date Carfax as a requirement 0f the loan application, potentially saving $ 3.0 more per loan application over time (whereas not every loan applicant has the credit history and proof 0f income to qualify for every vehicle that they may want t0 purchase). Not only did UACC not require a Carfax (as was common for many 0f the sub prime auto loan providers), but UACC said it would rely upon the auto Check and any other due diligence that it performed to make an overall assessment 0f the value 0f the vehicle and the ability t0 underwrite a loan for the loan applicant. A true and correct copy of the auto checks (showing that UACC used its own data When processing loans and relying upon statements relating to vehicle history) for these vehicles is attached as Exhibit K. What this means as a bottom line 1's that UACC was incapable of relying on any reprasenta‘cions or misrepresentations relating to the history 0f a vehicle that 1800myautos‘com made because 1800myautos.com never warranted anything specific about the vehicle. 1800myautos.com did not review or submit Carfax documents. as part of the loan application process (just customer AFFIDAVIT OF CYRUS KHOSHROO 5 information and VINs) and instead ISOmeautos.com relied upon its own business acumen, its internal “auto Check” and any other information that chose review 0r not review it t0 in its own due diligence process. 8. 1800myautos.com has n0 input as t0 what information is recorded 0n UACC’S auto Check or what information is contained in a Carfax. Both of those data sets are maintained by third parties and 1800myaut0s‘com did not submit auto checks or Carfax reports t0 UACC, so it was also incapable 0f deleting information from those reports. 9. Additionally, by relieving 1800myautos.com of the requirement 0f sending and reviewing Carfax reports, UACC had the option 0f either choosing t0 review Carfax reports and buy a higher volume discounted higher Ivolume subscription t0 the service 0r not. UACC was aware 0f the existence 0f Carfax reports and chose to rely only upon its own auto checks in its due diligence/loan underwriting decision making. As a matter oflaw, if UACC is complaining that the Carfax report indicates additional negative vehicle history information than the auto check that it chose t0 rely upon, UACCcannot attribute fraud to me, my brother, or 1800myautos.com from its decision to-vehicle without the If the vehicle history rely upon its own auto check information in making a decision t0 offer a vehicle loan or to modify a vehicle loan request and charge a greater rate for the loan (0r advance less money 0n the vehicle). SUMMARY REGARDING UACC’S FLAWED THEORY OF “CARFAX FRAUD” 10. Since there is a lot t0 read, I wanted to summarize that (1) some auto loan providers require a Carfax as a condition 0f a loan application and some do not ~ UACC got the contract With 1800myautos.com because it did not require a Carfax report t0 be bought on each loan application; (2) 1800myautos.com'did not separately have Carfax reports on these vehicles; (3) the loan application process involved submitting customer information and a VIN — 1800myautos.com did not make other representations regarding the prior history 0f the car 0r its AFFIDAVIT OF CYRUS KHOSHROO 6 condition (and cars were sold “as is”); (4) UACC ran its own search (called an auto check) and relied upon its own data t0 make loan decisions; (5) UACC frequently charged more for loans for damaged cars based 0n its auto check; (6) UACC retroactively, many months later, decided to pay for Carfax reports on cars and accuse 1800myautos.com of fraud because its “auto check” system did not contain the same data as the Carfax; (7) UACC has even tried t0 extort 1800myautos.com for cars Claiming “Carfax fraud” When there is a documented history of UACC commenting on the defects of certain cars before a loan is approved, and so, consequently, UACC relied upon its own information and cannot tell third parties that 1800myautos.com committed “fraud” merely because UACC asserts a flawed “Carfax fraud” theory t0 try and extort us for money. CONTINUATION 0F NARRATIVE TESTIMONY 11. It is deceptive and slanderous to accuse me, my brother, and 1800myautos.com of fraud based upon the fact that UACC’s auto check did not contain the same data as a third party independent Carfax because 1800myautos.com does not generate either report and cannot control the results of either report. 12. UACC did not require 1800myautos.com to submit a Carfax, chose not t0 review Carfax reports in its own, and did not have the right to tell customers 0f 1800myautos.com, my relatives, and employees of 1800myautos.com that I am committing fraud based upon data that it found on Carfax reports. 13. I am seeking a TRO against UACC t0 prevent it from contacting my relatives, employees, and car customers and telling them false information about me, my brother, and 1800myautos.com. Similarly, I am requesting that the Court issue a similar order instructing UACC not t0 lie and tell my employees and customers thatI am committing fraud (but I am not seeking any other restriction 0n UACC as t0 what it might ordinarily due t0 collect 0n its auto AFFIDAVIT OF CYRUS KHOSHROO 7 loans with its loan customers). 14. Because my brother owns the auto dealership and I manage the auto dealership, statements that 1800myautos.com is “committing fraud” or “Violating the law” are effectively statements that I am committing fraud 0r that I am Violating the law. TESTIMONY DEALING WITH ISSUE THAT PLAINTIFF’S MOTHER HAS NO PRIVITY OF CONTRACT WITH UACC, IS RECOVERING FROM CANCER (HAS ONE LUNG), AND UACC SEPARATELY SOUGHT OUT HER CELL PHONE NUMBER AND TOLD HER SHE SHOULD BE CONCERNED (AS WELL AS COPIES OF DEFAMATORY STATEMENTS). 15. It is important t0 testify as to the defamatory statements that UACC made to my mother, Mahin Masounmaliazadeh. Both my mother and father (divorced) live in separate residences in North Texas. I did not give UACC permission to discuss any part of my life with my mother. My brother, Soheil Khoshroo did not give UACC any permission t0 discuss any part 0f his life With UACC. To verify this, one can double Check with the Dealer Agreement with UACC, which is attached as Exhibit A. A careful review of the Dealer Agreement between UACC and 1800myautos.com reveals that no one provided the contact information for my mother (Mahin Masounmaliazadeh) or her name in the documents. Contact numbers were sent in the Dealer Agreement for me, Soheivihoshroo, and 1800myautos.com. My mother’s name is not mentioned on the Dealer Agreement and my mother is not a guarantor of any loan 0r contract with regards t0 UACC. The same is true with regards to contact information for my father. 16. Without deliberate action, UACC did not have access to a phone number for my mother or father. At some point, represéntatives or agents 0f UACC had t0 make a deliberate decision to find a good phone number for my mother and communicate false statements regarding me, my work (1 800myautos.corn), and my brother, Soheil Khoshroo. My mother has AFFIDAVIT OF CYRUS KHOSHROO 8 spoken to me several times and is very distraught about what is going on. T0 say the least, she has told me that representatives of UACC have said that my brother and I broke the law, that we are committing fraud, and that they are going t0 get the authorities involved if we d0 not make arrangements t0 pay them what they want. 17. I am now going t0 testify about the representations by UACC t0 my mother that I am asking the Court to order injunctive relief to stop the false communications. Before the four statements 0f texts/voicemail messages below, my mother was called by Marlina Batista 0f UACC and Marlina spoke With her forr a while saying that Marlina knew that my brother was a doctor and that: his credit could be hurt. BEGINNING 0F TESTIMONY RELATING TO FOUR VERIFIABLE COMMUNICATIONS (TEXTS AND VOICEMAIL MESSAGES) THAT WERE SENT TO MOTHER’S CELL PHONE THAT CONSTITUTED DEFAMATION OF PLAINTIFF AND PLAINTIFF’S BROTHER 18. I know that the testimony regarding the specific statements made by UACC is accurate because the statements were recorded in voicemails and text messages. Here is the exact copy of four statements from Defendants. The first two statements are from voicemail messages. Notice that Marlina from UACC also identifies my mother by name and mentions that she is discussing my mother’s sons. Here is a true and correct copy 0f the voicemail message (typed verbatim), which were follow ups after the discussion With my mother which went into many of the details below, which I have listened to as well: “Hi Mahin (name of mother), this is Marlina calling with United Auto Credit reaching out to you in regards to your son, Saheil Khoshroo, the owner of the dealership 1800myautos.com out in Dallas, Texas. Please let him know that it is urgent that he gets in contact with our office today. We are suing him for 23 AFFIDAVIT OF CYRUS KHOSHROO 9 accounts, that’s a lot of money. | can’t get Cyrus on the phone, | know that Cyrus runs the auto dealership, but he has no interest in trying to help his brother out, trying to get this resolved. So maybe you being his mother wiH be more concerned. So you can have give us a call today at 844-709-4898. My extension is 1418. Thank you, goodbye.” 19. The second voicemail message left with my mother also identified her by name. This is a true and correct copy 0f What was said (typed verbatim), Which I listened to as well: “Hi Mahin, this is Marlena. am | calling with United Auto Credit with regards to your son, Soheil Khoshroo, the owner of the dealership 1800myautos.com. They are located on Beckley in South Dallas, Texas. Please let him know that it is urgent that he get in contact with us today. It is in regards to the lawsuit that we filed against him and it is for 23 accounts, that is a lot of money that he owes us. My number is 844-709-4898. My extension is 1418. Thank you. Goodbye.” 20. These two communications to my mother Via voicemail messages were followed up with a very long text that was also sent t0 my mother in Which was I accused of Violating the law, fraud, and it was suggested that my brother and I needed t0 contact UACC because law enforcement was going t0 get involved, which resulted in my mother asking me if I broke the law or committed fraud. I know that this is a true and correct copy 0f the correspondence, because we “cut and copied” the text that was sent to my mother: “Good afternoon. I’m unsure Which 0f these numbers belongs to Sohiel, but I do hope that at least one of the #s does. My name is Mr. Fleeson. I work for United Auto Credit. AFFIDAVIT OF CYRUS KHOSHROO 10 My Company filed a lawsuit against you in Orange County Superior Court for 3 365,83 1 .89‘ My company has made several attempts t0 contact you. My company has made several attempts to contact you personally. Dealer Compliance rep have attempted to contact you at your job, they have called family. My dealer compliance reps have spoken t0 Cyrus multiple times and he has hung up 0n them. Either your (sic) not getting any messages 0r you are burying your head in the sand and pretending this isn't happening. You have 23 buybaéks. I have been asked t0 either collect or see what other directions we can g0 with this. I have only investigated 5 of the 23 accounts as of now. I investigated the 5 more delinquent. These 5 (sic) was enough for me to know I can prove fraud and enough to know I laws have been broken. The same credit card/ debit card was used t0 make payments on 4 of these 5 accounts. While I believe Cyrus runs the dealership please understand this. You signed the dealer agreement, you signed the personal guarantor, your name is attached the bank account in which United Auto Credit did ACH deposits. You are the one that owns property that I will take a closer 100k at once we get our judgement (sic), it is your bank accounts Iwill be looking t0 garnish, your pay check I will 100k to garnish. I can tell you I don't have the ability to see who's name is 0n the card ending 6555, the law enforcement agency I get involved in this 0f course will. If 4 0f the 5 account have gotten payments from this card so car What are the chances that a lot more 0f the 18 remaining accounts for me to 100k at Will also have payments from that card? Point is, you might want to get your head out of the sand and get this resolved. 949 224 1917 X 2495.” 21. Since the time 0f the receipt of the last text, I received a call from Fleeson, who works for UACC and stated that he knew that he contacted my mother and directed communications t0 her regarding me and my brother. AFFIDAVIT OF CYRUS KHOSHROO 11 SLANDEROUS STATEMENTS RELATED TO “FRAUD,” BECAUSE LOAN CUSTOMERS AND 1800MYAUTOS.COM WERE NOT REQUIRED TO AND DID NOT PROVIDE CARFAX REPORTS ARE FALSE; RETROACTIVELY REVIEWING THE CARFAXV REPORT WITH THE AUTO CHECK THAT UACC CHOSE TO RUN AND RELY UPON AT THE TIME OF THE LOAN (AND THE DECISION TO NOT REVIEW OR REQUIRE A CARFAX AS A CONDITION OF THE LOAN) CANNOT BE A TRUTHFUL BASIS FOR TELLING THIRD PARTIES THAT PLAINTIFF COMMITTED FRAUD. A. UACC DID NOT REQUIRE 1800MY AUTOS.COM OR LOAN CUSTOMERS TO SUBMIT CARFAX REPORTS, UACC COULD HAVE DONE SO, AND UACC COULD HAVE PAID FOR ITS OWN CARFAX REPORTS PRIOR TO OFFERING A LOAN. 22. In the context of facts needed t0 prove that neither I, my brother Sohefl, nor 1800myautos.com committed fraud as alleged by UACC, it is important to document that in the context 0f how the vehicle loans were processed, UACC Chose t0 View its own auto checks, did not require 1800myautos.com to submit any Carfax reports, and then made its own decision whether t0 view any Other vehicle history information before accepting the loan, rejecting the loan, or making the loan more expensive for the customer for t0 take the loan because of the history of the vehicle. Because n0 one (neither my brother, nor me, nor 1800myautos.com) was required to provide Carfax reports as condition 0f the loan application, we were incapable 0f defrauding UACC. Since UACC.had its own auto check system and could choose t0 also look at other third third party vehicle history reports (such as a Carfax) before making a decision 0n a AFFIDAVIT OF CYRUS KHOSHROO 12 loan application, it is not true t0 say that me, my brother, or 1800myautos.com defrauded UACC merely because UACC later read a Carfax report and it differed from UACC’S own autocheck. B. UACC FREQUENTLY ACCEPTED MANY OTHER VEHICLES FOR AUTO LOANS EVEN WHEN THE VEHICLE HAD A CONDITION THAT UACC SAID THAT IT USAULLY WOULD NOT ACCEPT FOR A LOAN. 23. Additionally, when UACC first approached 1800myautos.com about the possibility of getting a majority of its customers t0 try loan applications With UACC, 1800myautos.com expressed concern that sub prime auto loan vehicles typically had a Checkered past and they are not the ideal cars for all loan providers and UACC’S representative specifically stated that UACC was willing t0 provide loans 0n many cars that had a history 0f other problems, as long as the customer’s earfiings were enough to make the payments. Attached as Exhibit J is a true and correct copy of a list of at least 15 other vehicles that UACC approved for a loan when a car had a prior issue (wreck, damage, use as a rental car, etc.) and those loans were approved by UACC and did not make it to the CA lawsuit and yet somehow UACC picked these other cars for the CA lawsuit and called it fraud. Surely, the difference in those transactions and UACC accusing me t0 third parties 0f fraud in this situation is not just that UACC’s auto check matched up with the Carfax report. The course of dealing between UACC and 1800myautos.com involves hundreds of cars. There are at least these 15 other instances whereby UACC accepted a customer’s loan application for vehicles that had a less than desirable prior history (Le. sale at auction, prior wreck, used as a rental, etc.) UACC knew about the checkered history 0n the front end, charged the customer more for the loan, advanced 1800myautos.com less for the loan, and did not include these cars in its lawsuit. Just like the cars is sued over, UACC had a chance to pay for a Carfax and did not require us t0 d0 so and did not do so then ~— it will not prevail 0n case 0f fraud based upon retroactively purchasing and cross checking AFFIDAVIT OF CYRUS KHOSHROO 13 Carfax reports and it similarly did not have a right to tell me customers, relatives, and employees thatI am committing fraud. C. UACC CHOSE TO USE ITS OWN SYSTEM OF “AUTO CHECK” TO CHECK THE VEHICLE CONDITION HISTORY AND CANNOT TELL THIRD PARTIES THAT PLAINTIFF COMMITTED FRAUD MERELY BECAUSE ITS OWN SYSTEM OF LOAN UNDERWRITING CONTAINED INFORMATION THAT WAS DIFFERENT FROM A CARFAX REPORT. 24. What this means with regards to the statements sent in the text relating t0 “fraud” is that the allegations were untrue. If UACC was presented With a correct vehicla VIN and truthful information regarding the customer’s credit (provided by the customer), ran its own auto check and made a decision, after reviewing vehicle history reports (that were not provided by or altered by 1800myautos.com) to charge even more money for the loan as an additional risk premium, than UACC knew about the condition of the car from the vehicle history report and chose t0 charge more for the loan, meaning that “fraud” or failing to disclose a material fact known at the time, was impossible as alleged. D. SINCE UACC GOT PLAINTIFF’S LOAN APPLICATION CUSTOMERS BY DIFFERENT LOAN UNDERWRITING FEATURES, SUCH AS NOT REQUIRING THE LOAN CUSTOMER OR 1800MYAUTOS.COM TO PURCHASE AN UP TO DATE CARFAX, BOTH UACC AND PLAINTIFF AGREED THAT A CARFAX REPORT WAS NOT NEEDED TO BE SUBMITTED AND THE CONTENT 0F A CARFAX REPORT NOT ORDERED CANNOT BE THE BASIS FOR SLANDERING PLAINTIFF AND ACCUSING HIM OF FRAUD. 25. I am the manager of 1800myautos.com and I have personal knowledge 0f how the AFFIDAVIT OF CYRUS KHOSHROO 14 loan application process occurred, Which I supervised. I know that 1800myautos.com, myself, and Soheil conducted ourselves properly and did not commit fraud; specifically, I deny that any vehicle loan application occurred whereby anyone from 1800myautos.com altered a vehicle history report that 1800myautos.com received. As a general rule 0f thumb, 1800myautos.com simply did not order 0r submit Carfax reports 0r other vehicle history reports as a part 0f the customer’s loan application process at all. E. IN MANY INSTANCES THE CLAIMS OF UACC’S LAWSUIT, THE ALLEGATION OF FRAUD IS UNTRUE BECAUSE UACC BEGAN REQUIRING CUSTOMERS TO SUBMIT VEHICLE DAMAGE REPORTS AS A CONDITION OF THE LOAN, WHICH PLAINTIFF COMPLIED WITH, AND THE ACTUAL DISCLOSURE OF THE DEFECT PREVENTS ALLEGATIONS OF FRAUD (AND THE RIGHT TO TELL THIRD PARTIES THAT PLAINTIFF IS COMMITTING FRAUD). 26. To understand that the claim 0f fraud is untrue in a more detailed form, I have attached a true copy of the lawsuit filed by UACC against 1800myautos.com alleging the fraud as Exhibit B. In the paragraphs 31 to S3 of the lawsuit, UACC complains in detail that for 22 0f the 23 cars that they sued over that fraud was committed because 1800myautos.com got UACC t0 offer car loans on vehicles that had a less than immaculate vehicle history report. Dealing with the allegations with these 22 cars, first (and then we can deal With the other car in addressing their other allegation 0f “fraud” with regards t0 some of the vehicles, t0 cover all discussions of the meaning of the term), an audit and review 0f each of the 22 instances whereby UACC offered a loan 0n these 22 vehicles based upon the customer information, VIN, and auto checks that were conducted by UACC from its own means 0f evaluating a vehicle’s history. I reviewed the audits 0n these and UACC had the opportunity t0 approve 0r reject the loan based AFFIDAVIT OF CYRUS KHOSHROO 15 upon the disclosure of the auto check as provided by UACC, not 1800myautos.com. These files did not contain a Carfax in them and n0 Carfax was submitted by 1800myautos.com because it was not a requirement of the customer’s loan application. T0 retroactively make a decision that UACC should have checked the Carfax'instead 0f relying upon its own auto Check and then to tell third parties (my mother, my customers, and my fellow co workers) that I am engaging in fraud is deceitful, untrue, and does not even legally constitute fraud by its definition, since neither I nor 1800myautos.com submitted 0r altered Carfax reports as part 0f the loan process. 27. Additionally, I reviewed'the audits 0f these 22 of the 23 accounts where this complaint of fraud was made by UACC and in many of these auto loans, a premium was charged for the loan (Le. an additional $ 2,000 on the loan), because of the histow of the vehicle, meaning that more money was charged for the loan than was requested in the loan application and it was charged afterwards because of the vehicle history report. For example, 0n paragraph 31 of the lawsuit in California, it is alleged that for VIN ending in 1881 (Chevy Camaro), that there was some sort of fraud that the vehicle damage was not reported to UACC, however, a review of the documents submitted t0 UACC reveals that a “Motor Vehicle Damage Disclosure Form” was separately signed by the loan applicant and that UACC knew this when the file printout shows that it approved a loan in the amount of $ 23,221.08 and only provided a net check 0f $ 18,946 t0 cover it (meaning that it Charged several thousand dollars more for this loan at an APR of 20. 10%). A true and correct copy 0f the Motor Vehicle Damage Disclosure Form and a true and correct copy 0f the loan printout for this car is attached as Exhibit C. CLAIMS RELATED TO “FRAUD” BASED UPON WHETHER THE CUSTOMERS MADE THE PAYMENTS ON THE CARS ARE ALSO FALSE (“PAYMENT FRAUD”); THE MERE USE OF A CREDIT CARD ASSOCIATED WITH PLAINTIFF IS NOT EVIDENCE OF FRAUD IN THE INSTANCES AFFIDAVIT OF CYRUS KHOSHROO 16 WHERE THE RECEIPT BOOKS AND CUSTOMER AFFIDAVITS ESTABLISHED THAT THE CUSTOMER ACTUALLY MADE THE BASIS (AND MOST USED CAR LOT CUSTOMERS ARE ACCUSTOMED TO A “BUY HERE, PAY HERE” WAS OF DOING BUSINESS AND DO NOT HAVE CHECKING ACCOUNTS), AND SO THE STATEMENT IN THE TEXT THAT A REVIEW OF 4 OF 5 INSTANCES OF DEBIT CARD PAYMENTS SHOWED FRAUD IS FALSE AND DEFAMATORY. SUMMARY OF TESTIMONY THAT THERE WAS NOT PAYMENT FRAUD IN 4 OF THE 5 INSTANCES EXAMINED, AS STATED BY UACC IN ITS TEXTS 28. I included as Exhibit D a summary 0f testimony of the 23 vehicles that subject to the CA lawsuit and numbered them the same way they are numbered in the CA Lawsuit. I am also testifying in that chart and had it attached t0 my affidavit when notarized because I am also affirming that those statements are true (it is easier to have the testimony summarized in one place). I think tha