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Department of State, State Police investigators nab Bay City auto dealer for fraudulent vehicle sale

LANSING – A Bay City auto dealer has been charged with larceny by conversion for allegedly selling a 1963 Jaguar XKE on consignment and keeping the sale proceeds, after an investigation by the Department of State Regulatory Monitoring Division and the Michigan State Police.

A warrant was issued Tuesday, Dec. 17, for David Cotten, owner of Bay City Auto, 1120 Water St., who surrendered and was arrested and arraigned Dec. 19. A preliminary hearing is scheduled for Thursday, Jan. 2, in Bay County Circuit Court.

The case began in 2016 when a customer allegedly approached Cotten about selling the 1963 Jaguar on consignment. Cotten also owns Bay City Motors, 1124 N. Water St., a Class D dealership licensed to "broker" or arrange vehicle sales between a seller and a buyer. The two parties agreed to list the car for about $220,000. A truer estimate for the Jaguar at that time would have been about $126,000. Cotten later claimed the customer wanted to trade the Jaguar in 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 actually purchased outright by the customer.

Cotten then assigned the Jaguar’s title to Bay City Auto, his used car dealership, 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 Cotten never remitted the sale proceeds to the Jaguar’s original owner, who, for the next two years, was 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. After an investigation by department staff and the Michigan State Police, it was referred for prosecution.

Any customers of Bay City Auto or Bay City Motors who have complaints concerning a vehicle are encouraged to contact the Regulatory Monitoring Division at 517-335-1410.


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