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TAI files lawsuit over catalytic converters

Keywords: Tags  catalytic converters, Toyota Tsusho America, Sino Scrap, Autocats, Scott Vollero, Dennis McElroy, Arthur Simpson, John R. Mion Racketeer Influenced and Corrupt Organizations Act

PITTSBURGH — Toyota Tsusho America Inc. (TAI) is suing a California company and a number of managers for allegedly importing counterfeit catalytic converters from China and reselling them in the U.S. market as real ones.

Georgetown, Ky.-based TAI filed the Racketeer Influenced and Corrupt Organizations (Rico) Act lawsuit against Anaheim, Calif.-based Sino Scrap Inc. and its president, Scott Vollero, who also served as president of Autocats Inc. Others named in the suit are Autocats plant manager Dennis McElroy, controller Arthur Simpson and the company’s Asian manager, John R. Mion.

The lawsuit filed in U.S. District Court in California included e-mails and documents obtained by private investigators that allegedly indicate Vollero referred to authentic converters as "McCoys" and counterfeit ones as "dogs" or "pups."

The defendants allegedly went to great lengths to recondition fake converters to look like they were genuine used converters, including adding serrated pipe fittings so they looked as if they were sawed off a vehicle; bead blasting rust off the converters, which were made from lower-quality steel; baking them to make them the correct color; and applying soot.

TAI purchased the converters—mixed with some genuine used converters—and sent them to refiners to extract the precious metals, but it said the converters contained none or minuscule quantities of the metals.

TAI said in the lawsuit that it suffered damage after forming a subsidiary for the purpose of acquiring Autocats for $5.5 million and paid for the company based on falsified financial statements, and Vollero, who was appointed executive vice president of its acquisition, damaged TAI’s reputation by allegedly continuing the practice of importing fake converters.

None of the defendants could be reached for comment.

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