Bay City Motor Co. owner gets probation, ordered to pay $175,000 in illicit sale of vintage 1963 Jaguar

BAY CITY, MI — The former owner of a classic car dealership in downtown Bay City expressed his apologies and regret for having sold a vintage car on consignment then pocketing the proceeds, saying his goal going forward is to make his victims whole. His sentencing judge, however, said he felt the man deserved prison time for his six-figure theft, but was sparing him that fate due to his age and poor health.

David F. Cotten, 69, on Monday, Oct. 18, appeared before Bay County Circuit Judge Harry P. Gill for sentencing. Cotten in September pleaded no contest to the lone count he faced: larceny by conversion greater than $20,000. The charge is a felony punishable by up to 10 years in prison and a fine of $15,000 or three times the value of what was stolen.

Cotten owned the now-permanently closed Bay City Motor Company/Bay City Auto Company at 1124 N. Water St., a Class D dealership that was licensed to broker vehicle sales between parties. Cotten’s conviction stems from a consignment sale of a red convertible 1963 Jaguar XKE OTS, owned by Florida couple Douglas and Sharyn Chapman.

In accordance with Cotten’s plea deal, Gill sentenced him to five years’ probation, with one year in jail held in abeyance. Gill also ordered him to pay $175,000 in restitution to an insurance company.

The charge Cotten pleaded to only allows for a maximum probation term of three years, but Cotten consented to a five-year term.

Defense attorney Matthew B. Hewitt said the case has “taken a long, winding road” to reach its conclusion, but that he felt the sentencing recommendations were “appropriate and just.”

Reading from a prepared statement, Cotten shared his contrition.

“I agree and fully understand that the Chapmans were not paid by me for their car that I sold,” he said. “I regret and apologize for this situation. I specifically apologize to Mr. and Mrs. Chapman for leading them on, for their suffering, their financial loss and, very importantly, for the injury of the relationship we once had. Unfortunately, my apologies cannot repair those things, but it is sincere.”

Cotten referred to a civil lawsuit the Chapmans filed against him before he was criminally charged. He was unable to pay the couple in the suit, leading him being charged, he said.

“That is what got me here, agreeing to things I could not reasonably accomplish, all in hopes of keeping things going for yet another day,” he said.

Since then, Cotten has returned his vehicle sales business licenses to the state.

“I assure you that I realized it was my doing and my fault,” he continued. “I should have asked for help sooner, especially forthrightly and urgently. If I could go back and do it all over again, I would do very much differently, including protecting the Chapmans, my business and its visions, and my family. I acknowledge my mistakes and offer my sincerest apologies.”

Cotten went on to say he spent decades building up a global reputation for himself and his business, which has now been greatly damage by his actions. Moving forward, he plans to make good on paying his debts.

“It is my overall primary personal and professional goal then and now to compensate the Chapmans and do business rightly, always,” he said. “I am not sure where my life will go from here, but I will do my best to live with what I have learned and correct my wrongs with the time I have and by whatever proper means are allowed to me.”

The Chapmans were not present to provide victim impact statements.

Just before imposing sentence, Gill said he was feeling pangs of conscience, as he has sent people to prison for taking significantly less money than Cotten did.

“I think this crime is a huge breach of trust,” the judge said. “You’re not unlike a lawyer or a doctor. When someone consigns a car to you for sale, they’re trusting you with a very valuable asset. You breached that trust horribly. You just sold the thing out from under them and lied to them about it. In my opinion, that kind of act does deserve severe punishment, including prison. In the interim, however, your health declined significantly, and that is the only reason I have agreed not to send you to prison. Because of your health and your age, I’ve decided I will not send you to prison.”

He went on to tell Cotten that his primary responsibility is to repay the money he owes. Earlier in the hearing, Hewitt told the judge Cotten receives $2,200 monthly from Social Security.

Cotten’s conviction stems from an investigation conducted by the Michigan Department of State Regulatory Monitoring Division and Michigan State Police.

In 2016, the Chapmans approached Cotten about selling their Jaguar on consignment. The two parties agreed to list the car for about $220,000, though a truer estimate for the Jaguar would have been about $126,000, officials claim.

Officials allege Cotten later claimed the Chapmans wanted to trade the Jaguar for a 1958 Cadillac Eldorado valued at $130,000, with an understanding that the balance of about $90,000 would be forwarded to the customer once the Jaguar sold. However, dealership records show the Eldorado was purchased outright by the Chapmans, officials said.

Officials allege Cotten then assigned the Jaguar’s title to Bay City Auto Company, transferring ownership of the Jaguar to the dealership, and brokered the sale of the car for approximately $118,300 with an auto auctioneering company in California. The vehicle was sold to a buyer in Germany and officials allege Cotten never remitted the sale proceeds to the Chapmans, who, for the next two years, were led to believe that the car was still on the market.

A Regulatory Monitoring Division agent was contacted by an attorney representing the Jaguar’s original owner. Authorities in December 2019 issued a warrant for Cotten and he was arraigned later that month.

In addition to his criminal matter, Cotten’s handling of the Jaguar led him to being the target of a 2019 civil lawsuit filed by the Chapmans. The couple had bought the Jaguar from Cotten in December 2014 for $178,644.70.

In September 2016, the parties agreed to have Cotten and his company resell the Jaguar, court records state.

Cotten and the Chapmans exchanged numerous statements and emails. In them, Cotten claimed to have sold the Jaguar and refused to turn over the sale’s proceeds, the Chapmans alleged in the suit.

“Despite having made many claims that Bay City Motor sold the Jaguar and was repeatedly promising to pay plaintiffs, Bay City Motor continues to market the Jaguar on the company’s website as part of its inventory,” the suit stated.

In January 2018, Cotten agreed to return the Jaguar to the Chapmans or pay them $220,000, the lawsuit alleged. The car’s owners claim neither action happened, which led them to file a civil lawsuit.

In July 2019, Bay County Circuit Judge Joseph K. Sheeran issued an order granting final judgment in the Chapmans’ favor. Sheeran ruled the defendants owed the Chapmans $257,360, which includes the principal of $225,500 plus accrued interest.

The judge also ruled Cotten and his business obtained the Jaguar or money by false pretenses, a false representation, or actual fraud.

Read more:

Bay City Motor Co. owner pleads to felony in sale of classic 1963 Jaguar

Bay City Motor Co. owner faces felony charge in sale of classic 1963 Jaguar

Classic car dealer in Bay City facing criminal charge was ordered to pay $257K in civil suit

https://www.mlive.com/news/saginaw-bay-city/2021/10/bay-city-motor-co-owner-gets-probation-ordered-to-pay-175000-in-illicit-sale-of-vintage-1963-jaguar.html

Nina Zatulini

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