Seller Beware

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Have you ever sold an airplane? If so, you know it is a remarkably loose transaction. In the days before the internet, you got hold of the carbonless three-part form, wrote down a precious few details including the names of the buyer and seller, the buyer’s address, and the selling price (or $1.00 and OVC, which everyone knows means other valuable considerations). The seller signs it, and off it goes to the FAA via U.S. mail.

Today it’s more sophisticated. Instead of driving or flying to your favorite FSDO to pick up those fancy carbonless forms, you can now download AC Form 8050-2 as a fillable PDF. Using your fillable PDF viewer/editor, you type in everything but your signature, print it, and send a signed original to the FAA. (Snail-mail, of course.) The buyer keeps a copy in the airplane while he or she waits for the final paperwork.

Sometime before the turn of the century, I cut a deal with a close friend of mine that would give him ownership of an airplane I’d been flying for a few years. We agreed it was worth about $40,000. Zip, zap, paperwork done. Sold.

A couple of months later, he asked to meet for lunch at a local airport, and at the end of lunch, pulled out a fresh 8050-2 and asked me to sign it, as he lost the original document. I asked why the sale wasn’t already recorded, and he said something about how forgetful he is, and that he’d take care of it immediately.

Some months went by, and then I received a certified letter from some attorney in Texas. I was being sued for verbal breach of contract on the sale of my airplane. The letter claimed that my agent (my friend) had misrepresented the condition of the airplane, which, after the “sale,” now needed $20,000 in repairs to the tail feathers.

So, I contacted another aviation friend, with whom I had been doing business. He was both a CPA and an attorney. He said he’d get me representation in Texas, as he was not licensed to practice there. He did so and kept me updated over the following months as to how things were proceeding.

During a final lunch meeting, he briefed me on the status of the case, and all seemed to be on track. It looked like an open and shut case to him. After all, I had never spoken to the buyer, nor had any other contact with him. I had not used an “agent,” and if the buyer did not have a prepurchase inspection done, tough luck.

He then showed me a copy of a check he’d written and sent to my attorney in Texas. It was for $10,000, and he stated he felt that would cover the entire cost of legal work down south. I asked why he sent that check, and he explained that he trusted me, and knew that I’d reimburse him for the amount of the check – and that he was not going to charge me for his own efforts in the case.

More months passed. I got another certified letter, from “my” attorney in Texas. He demanded full payment of the $10,000 retainer he required when he accepted my case. I explained that my friend showed me a copy of the check he had written to the Texas attorney’s firm. But he explained that he had not heard from my lawyer in months, and that he never received a check from him.

So now I finally had a conversation with my Texas attorney. (I’ll call him Tex.) Although at first, he was ready to sue me, he slowly realized I had been scammed. He then explained the grisly details. First of all, the only name on the bill of sale was mine. The airplane was never registered to my “friend.” There was no paper trail leading to anyone but me. Duh. Now I was catching on. True, I should have demanded he put his name on the Bill of Sale. But just as true, anyone who would do what he did would have had no qualms about forging my signature.

Tex explained that there existed a warrant for my arrest in the state of Texas. A judge had already awarded the buyer with a $20,000 judgment. Although I insisted I could not possibly have breached a verbal contract with a guy I never spoke to, his response was, “I can appeal it if you want, but Mr. Parnau, you’re in Wisconsin. This is Texas. Things are different in Texas.”

There was another irritating complication. Tex explained that I was exposed in Texas only because my company (a software company) had done business in Texas. I asked how anyone can prove that, and he asked how I could prove it had not. He again reminded me that he was speaking Texas, and I was speaking Cheesehead.

I wrote a check that covered the buyer’s claim ($20,000). I wrote a check to my lone-star lawyer for $10,000. And of course, I had already written a check to my con-man attorney for $10,000. Ah, the irony. I was out $40,000 – an amount which matched the entire value of the airplane. And now, I would need a YAT (Yet Another Attorney) to see if I had any chance of recovering the $10K stolen by the thief who put me on the wanted list in Texas.

Before I continue, there’s a bit of background to the above events:

The attorney who scammed me had, over several months, met with me, plus another attorney, and an investor. He claimed he had purchased a French patent for a device that would be marketed to municipalities across the U.S. I won’t go into details, he needed my expertise because it involved software. When he showed up an hour late for one of our meetings, he announced that had just returned from Europe, and would present an even better opportunity that had worldwide potential. This all smelled, and we (the potential investors) talked on our own, and agreed it was all as a confidence scam.

After settling things with Tex and Texas, I met privately with my YAT. I related all of the details as to how I was ripped off. áHe was quite fired up and said he’d see what he could do, no charge. I must say, at this point I was quite suspicious of dealing with someone who offered to do something for nothin’. áBut I hoped he was as angry at the con-man as I was.

Alas, after months of trying to track down the villain, we couldn’t find him. Maybe he had moved? Been shot? But we did learn this: He was not an attorney. He was not a CPA. And his wife couldn’t find him either. It looked like the end of the story. But …

Although it would probably add to my financial losses, the cost of a private investigator would not make things much worse. I hired one. Somehow, this guy sniffed out where the scammer lived, what he did most days and how to run into him. One mid-summer day, the PI approached him in a parking lot, and said, “Hey, excuse me, but aren’t you the famous pilot-attorney John Doe?” (Name changed to protect the guilty.)

“Why yes, I am!”

Flattery! How clever. The papers were served. Of course, that merely means you have the right to demand the money. It doesn’t mean you’re gonna get it. But …

My YAT, nice as he seemed, was capable of bulldog mode. I don’t know exactly how he pulled it off, but he received a check from the bad boy, and he promptly turned it over to me. We stayed in touch for years after our experience with Mr. Lying (J.D., CPA, SOB) and his scams. We actually became friends. Not friends like those mentioned above. Actualá friends.

Now please, don’t lecture me. I know I was stupid. I was na´ve. It was all preventable, by me and only me. It was all entirely my fault, I know. áBut maybe, just maybe, someone will read this and have an OMG reaction, and learn a thing or two that they, too, should have already known:

Trust, but verify. – Ronald Reagan, translating the Russian proverb, “Doveryai, no proveryai.”á

P.S. Although this happened long ago, I have occasionally checked the courts in Wisconsin and nearby states, tracking the status of the “friend” I “sold” the airplane to, and that of the attorney who was not an attorney. Neither has done well. I was pleased to learn that the non-attorney developed a long rap sheet over the years and was eventually convicted of perpetrating multiple scams. I presume he is in a cell somewhere, and I hope he’s someone’s property.

Comments (6)

Years ago I bought a Luscombe from a dealer in Batavia, NY. When we had signed all the papers he said he would mail the form to the FAA that afternoon. I made some remark about that being nice of him, he told me it was not being nice, he was making damn sure the plane was out of his name and that if I ever sold an airplane, I should insist on sending in the paperwork myself. I always followed his advice. I've had one guy that said no, he might want to put it in a company name. That ended that sale. In the years since I bought the Luscombe, I've know several people who have sold planes which never got re-registered and it came back to haunt them.

Posted by: Richard Montague | November 8, 2018 7:11 AM    Report this comment

Great story Jeff. Enjoyed the punch line :-)

Posted by: Herby Olschewski | November 8, 2018 9:53 AM    Report this comment

This tale certainly resonates with me, as I am sure it does with all too many other aviation folk.

My very first airplane purchase all those decades ago was an unpleasant lesson and a reminder that crooks lurk within every group and every social strata. Foolishly thinking purchasing an airplane was just like buying a car, I bought a doggy Tri-Pacer from a good old boy FBO/dealer for cash, receiving in return a automotive-type bill of sale-contract all nicely signed, but unfortunately not by the aircraft's true owner. After an abortive attempt to get the bird registered using the proper forms, I discovered the hard way how things worked.

A lawyer plus legal bills that just about doubled the cost of the plane did leave me with a clean-titled bird but also left the poor prior owner with zip. The good old boy absconded to Texas with my money plus a much larger amount from several other suckers, where he became a deacon in some church and, I suspect, continued the same behavior.

Posted by: John Wilson | November 8, 2018 4:06 PM    Report this comment

Transport Canada has a nice way of dealing with this.

Your certificate of registration is three parts. The first part is the traditional CoR, the second part is the application form for the buyer to register, and the third part is a report of sale form that the seller fills out and sends in.

The result of this is that the seller has reported the sale, the buyer has all the paperwork to register and the old CoR counts as a three month temporary certificate.

Posted by: Ryan Dewsbury | November 9, 2018 5:46 AM    Report this comment

Some (all?) insurance companies do much the same thing. I had sad occasion to sell a former airplane to my insurance company (aka - it was 'totaled').

Insurance companies really don't want to 'buy' an airplane. They don't want to register it in their name - it just adds expense and complication to an aircraft they don't intend to keep. Instead, they keep its ownership status in limbo until they can sell the remains at a salvage auction.

So, even though I signed all the right forms in all the right places (as instructed by my insurance company), the plane was still listed on the FAA records as being, well, mine.

Buyers of salvage airframes really like this process, too. The insurance company's name never appears as an owner of record. Instead, it looks just like I sold my airplane directly to the highest bidder (except there would be no record of bidding, either, just a name).

Think about it - how would you feel if, as a prospective buyer, you looked over the logbooks and saw the plane was once owned by Acme Insurance? "Hey, I thought you said this plane had no damage history?"

After a couple of YEARS, I noticed the FAA still thought the plane was mine. So I contacted the right Feds in the right places, and sent a letter with the right details to the right address that the plane was NOT mine, and should be deregistered.

Soon after, the current owner finished repairing the plane and re-registered it in his name.

Posted by: Kirk Wennerstrom | November 10, 2018 9:10 AM    Report this comment

I should add that when I filled out the paperwork handing the remains to the insurance company, they specifically instructed me NOT to fill in the buyer's name, as "they would handle it" (in a process I described above).

Also, I was able to keep tabs on the progress of the plane through the auction and buying process by way of the internet and friends of friends, so I didn't feel I would get scammed, per se. But, after several years I felt there was no advantage to having the plane in my name when it sat in someone else's hangar, and so contacted the FAA.

I suspect the FAA may have then contacted the new owner to let them know the registration was going to cease, and that prompted him to finalize the sale by registering it in his name.

Posted by: Kirk Wennerstrom | November 10, 2018 9:18 AM    Report this comment

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