New York Superintendent of Insurance Gregory Serio announced that Ernest Varacalli, 58, was sentenced Monday to 10 years in prison and 3 years probation and ordered to pay nearly $1 million in restitution to insurance companies for running a Brooklyn auto chop shop.
Varacalli was one of 26 arrested in May 2001 in an auto fraud round up in the metropolitan area. He was convicted in U.S. Federal Court Southern District of Witness Tampering, Conspiracy to operate a chop shop and Interstate commerce of a chop shop. The remaining subjects have active cases in New York State courts.
The investigation revealed that Varacalli’s shop chopped up and sold parts from $5 million worth of stolen Mercedes-Benz, BMW, Lexus and Infiniti cars over a four-year period. Some of those cars were “stolen” with the consent of their owners who wanted to get out of lease payments.
Varacalli’s arrest followed an investigation by the Department, the Brooklyn District Attorney’s office, the New York City Police Department, and GEICO and CGU Insurance Company, involving 11 auto body shops in Kings, Queens, Nassau and Richmond Counties.