Mar. 14, 2019 (DENVER, Colo.) — A Denver District Court judge today ordered the owners of Denver Custom Food Trucks to pay $4.5 million dollars to resolve a case in which they took thousands of dollars from clients to build custom food trucks that were either never delivered or equipped with unsafe, fraudulent parts.
The Defendants, Larry Perez and Rudy Martinez, are required to pay $3 million and $1.5 million, respectively. According to witnesses, the food trucks that were eventually delivered by the Defendants frequently failed safety inspections from the Denver Fire Department, thus shifting more costs and delays onto the customers. Additionally, neither Perez nor Martinez held a motor vehicle dealer’s license as legally required to sell trucks. Defendants also often “skipped title” to deliberately avoid government oversight, causing further injury to consumers when they attempted to register their trucks as required by law.
“It is wrong to prey on and cheat entrepreneurs who are working hard to make their dreams come true. As a state, we must support good business practices and hold irresponsible actors accountable. Protecting consumers is essential to creating a pro-business environment. When we have strong enforcement of our consumer protection laws, we support honest people who are doing the right thing,” said Attorney General Phil Weiser.
Attorneys from the Colorado Department of Law’s Consumer Fraud Unit prosecuted the case in court.
The Defendants’ businesses, Denver Custom Food Trucks and Brothers Custom Food Trucks, continued to operate in Denver despite being shut down in May 2018 by Commerce City for failure to pay taxes—the second time that Perez was caught for not paying taxes. In December 2018, a judge issued a temporary restraining order that restricted the Defendants from engaging in any activity related to the fabrication, repair, or sale of food trucks.
Last month, the court heard a full day of testimony from consumer witnesses harmed by the Defendants’ business practices. The court then prohibited them from any involvement in the food truck fabrication process and from selling vehicles without a necessary dealer’s license.
One consumer traveled from Dakota City, Nebraska to testify how she and her husband withdrew 401k retirement funds in order to pay $35,000 for a Denver Custom Food Truck. The food truck was never delivered and the consumer and her husband suffered not only the loss of their deposit, but additional costs associated with their move to Colorado and leaving a prior job to set up their new business. In court she explained that she now owes over $70,000 dollars in federal and states taxes resulting from the withdrawal of their retirement fund.
Some witnesses said that their dreams of owning a food truck were so that they could sustain their families in the future. One witness who worked in the food industry for 25 years said he paid the Defendants to build a food truck as a means to provide employment and income to his 18-year old son who suffers from multiple sclerosis. The failure of Defendants to deliver a truck not only resulted in a loss of the witness’ $6,000 dollar deposit, but the loss of opportunity as well.
The Colorado Attorney General’s office encourages any consumer who is defrauded or cheated to file a complaint here or calling 1-800-222-4444.