San Bernardino County high-end car dealer suspected in $8 million embezzlement, tax fraud

Two people were charged in a multi-million dollar embezzlement and tax fraud scheme in San Bernardino County, California Attorney General Rob Bonta announced Wednesday.

Clayton Thom, who operated a high-end automobile dealership, was allegedly involved in the theft of over $4 million from 35 victims. Thom is the owner of the shuttered Upland-based CNC Motors Inc. and Lotus of Upland, LLC., according to court records.

Thom and his business manager, Valerie Tanaka, were charged with 13 counts of tax fraud for allegedly defrauding the state of more than $4 million in taxes. Thom was charged with an additional 37 counts of grand theft and one count of elder theft, the Department of Justice stated.

“My office is committed to protecting hardworking Californian consumers from financial crimes,” Bonta said. “Fraud against Californians and against the state will not be tolerated by the California Department of Justice.”

What we know about CNC Motors

Thom ran his alleged embezzlement scheme from 2018 to 2021 by stealing from customers at his dealership in Upland.

Thom encouraged victims to place high-value vehicles on consignment, sometimes persuading them to leave their titles at the dealership. These victims signed contracts that promised payment within 20 days of their vehicle’s sale, the DOJ said.

However, after selling the victims’ consigned cars and collecting the proceeds, Thom did not pay the victims. In many cases, he also used these consigned vehicles to settle his debts and obtain loans.

Thom also allegedly prevented customers who bought consigned vehicles from receiving legal ownership. He did not endorse, date, and deliver the certificates of ownership and registration, or in some cases, deliver forged titles.

A Youtuber brought attention to Thom's business dealings.

Daniel Hurlbert’s YouTube channel Normal Guy Supercar got attention with his CNC Motors video playlist, which includes many of his subscribers sharing their stories about CNC Motors. Hurlbert's channel also includes a 2021 video interview with Thom, who spoke of business challenges because of the COVID-19 pandemic.

The Department of Motor Vehicles was investigated complaints against CNC Motors, according to the DOJ.

“Our Inland Area office worked closely with local law enforcement, (California Department of Tax and Fee Administration) and other agencies to thoroughly investigate these complaints and bring these individuals to answer for their actions,” DMV Investigations Chief Christina Michel said.

Thom and Tanaka were arraigned on Tuesday afternoon at San Bernardino County Superior Court in Rancho Cucamonga.

Thom, 50, remains at the San Bernardino County Sheriff-Department’s West Valley Detention Center in Rancho Cucamonga, with bail set at $8.7 million. He is due back in court on Monday, Nov. 6, booking records show.

Tanaka, 61, who was arrested on Oct. 30, was released the following day. No court date has been scheduled, according to sheriff’s officials.

Daily Press reporter Rene Ray De La Cruz may be reached at 760-951-6227 or RDeLaCruz@VVDailyPress.com. Follow him on Twitter @DP_ReneDeLaCruz

This article originally appeared on Victorville Daily Press: Duo charged after suspected $8 million embezzlement, tax fraud scheme