boat broker

Boat dealer caught in 'WEB' - Boat Smart: Consumer Protection Bureau

Complaints by at least 14 customers led to the arrest in mid-February of a Bay Head, NJ, boat broker on charges that he stole over $170,000 in payments and deposits collected in the course of buying and selling used boats.

BoatU.S. played a role in his apprehension. Ocean County investigators were able to identify a number of the broker's victims through a posting on the "Consumer Q&A" message board at BoatUS.com. According to Mark Malinowski, an investigator with the county prosecutor's office, the information helped lead to the arrest of Tom Gringas, 41, owner of Snug Harbor Yacht Sales. He has since been released on bond.

At least three customers complained to police that Gringas allegedly pocketed their payments rather than paying off loans on used boats and nine others reported that the broker refused to return deposits when they had reason to cancel contracts. This resulted in charges of theft by deception and theft for failure to make proper disposition of funds. The broker was also charged with issuing two bad checks.

"I've been in this office for less than a year," Malinowski told BoatU.S., "and I already know more than I want to about boat dealers." Malinowski is not a boat owner himself, but his office and the detectives at the Bay Head Police Department were fully aware of BoatU.S. when we called about the case. "I know why you're calling," said one, without waiting for us to complete our introduction. "It's about that boat broker We know about your Web site."

In all, Gringas is alleged to have mishandled $170,974 paid by individuals from New Jersey, Washington state, Rhode Island, New York, Delaware and Pennsylvania, some of whom responded to boat listings posted on Snug Harbor's Web site. He has not been charged with Internet theft because none of the transactions was consummated online.

Snug Harbor Yachts Sales was a moving target, relocating from Jersey City to Brielle, to Bricktown and finally to Bay Head. According to police, when investigators started to close in, he simply packed up and went somewhere else.

Apparently, Gringas acted alone. There is no evidence that Snug Harbor's sales staff was involved in illegal operations, Malinowski told us, as employee turnover was rapid and "everything was run through [Gringas]," he said.

A Bay Head detective told BoatU.S. that the Snug Harbor case is unusual in his area. "The boat brokers and dealers here are usually on the up and up."

"It's the fly-by-night brokers like this guy and a few more around here who give legit boat brokers a bad rap," said Chip Gahr, owner of Comstock Yacht Sales in Brick, NJ, in an online message at BoatUS.com. Gahr wrote that Gringas "has been pulling this kind of thing for the past two years."

Gahr's statements are bolstered by a letter to Gringas written by Joseph Thompson, executive director of the Yacht Brokers Association of America. "The specific concerns expressed by three parties who contacted our offices include, among other accusations, that your company allegedly held deposit funds [totaling $18,000] which were not returned as promised. In two cases checks were sent to clients from your firm for which there were insufficient funds."

Investigator Malinowski told us that Gringas apparently also ran a boat brokerage in the Cleveland area, at which time he appears to have been going by the name of Tom Collins. Malinowski said his office is not aware of other criminal charges against Gringas.

BoatU.S. first became aware of the Snug Harbor situation in early 2002 when we heard from a Voorhees, NJ, man who said he contracted with Snug Harbor to buy a boat in Virginia for $32,500. The Voorhees man later learned that the broker allegedly told the Virginia seller that the boat sold for only $28,000. Meanwhile, the Voorhees customer said Gringas told him that his trade-in boat sold for $8,300 when it actually sold for $11,000. Neither the Voorhees man nor the Virginia seller got his full share of the profits.

More complaints followed. Through its dispute mediation service for members, the BoatU.S. Consumer Protection Bureau attempted to open up a line of communication with the broker. We contacted Snug Harbor Yacht Sales at least four times, but received no response.

Many of the complaints mediated by BoatU.S. are resolved in a satisfactory way because both parties are willing to negotiate a reasonable settlement. However, when companies refuse to work with their customers--or when consumers are unreasonable in their expectations-BoatU.S. doesn't have the legal authority to force the disputing parties to do the right thing. We do know where to go for help, however.

In the Snug Harbor case, we forwarded our complaint files to the New Jersey Division of Consumer Affairs. In the past, this has been an effective strategy for handling boat dealer and broker disputes in Virginia, Florida and other states. Although state consumer affairs agencies aren't usually in a position to provide legal representation for individuals, they will often launch investigations when a group of consumers has suffered similar damages.

At about the same time we contacted New Jersey authorities, Michael Grover of Greenville, DE, posted his warning on the BoatUS.com message board. The subject line, WARNING/SNUG HARBOR YACHT SALES!!!/TOM GRINGAS/WARNING," was hard to miss. The dragnet was closing in and, less than a month later, Gringas was arrested.

There are a number of lessons that can be learned from the Snug Harbor case. Here are a few tips for avoiding pitfalls when buying a used boat:

* Do business with a company that has been in the community for more than just a few years. Ask for references from other customers. Check with the BoatU.S. Consumer Protection Bureau and the local Better Business Bureau for complaints.

* Buying online is so easy, you can overlook normal precautions. Don't sign a contract for a boat, even a new one, until you or someone you trust can see it in person.

* Be sure that all transactions and agreements are described frilly in a written contract, with contingencies for a refund of the deposit, if necessary, following boat and engine surveys and a sea trial.

* Make sure deposits are placed in an escrow account held by a bank, with stipulations that funds can be applied only to the purchase of the boat described in your contract and can be released only when the purchase is completed.

* Hire a marine surveyor to inspect the boat prior to purchase. Surveyor referrals are available at BoatUS.com. Don't rely on surveyors recommended by dealers or brokers.

* Walk away from the deal if the broker demands additional funds not stipulated in the sales agreement or is unable to produce the proper paperwork giving you title or ownership when you take delivery.

* Immediately report complaints to your local consumer affairs office and to the BoatU.S. Consumer Protection Bureau.

The BoatU.S. Guide to Buying & Selling a Boat and the BoatU.S. Guide to Marine Service are full of consumer tips. To obtain copies of the free 34-page booklets call 703-461-2856 or e-mail ConsumerProtection@BoatUS.com.

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I bought a Raymarine model 53 radio with digital selective calling (DSC) about two years ago because this particular model can be hooked up to an onboard GPS. If there's an emergency, all you have to do is press a button on the radio and your GPS coordinates and vessel information is transmitted to the Coast Guard and anyone else out there. The safety implications are great. Unfortunately, I couldn't get it to transmit anything. On further investigation I learned that Raymarine mis-wired the radio at the factory. The company assured me that they would fix the problem on new radios and notify venders and customers about this problem.

However, I ran into someone who bought the same radio just 10 months ago and he's had the same thing happen. There have to be a whole lotta radios out there, with owners thinking, 'Gee, isn't it nice I have this added safety device," when in fact they do not.

M.T., Upland, CA

Other Raymarine owners report similar experiences with model 53 DSC radios connected to GPS equipment. The radios will still transmit mayday signals and vessel identification data but won't send GPS coordinates. They say Raymarine confirmed that the wires were reversed at the factory and also offered to make repairs. Morten Andreason of Raymarine confirmed that radios with seriat numbers M108877 and higher will function properly. Radios with lower serial numbers "have a potential that wires will have to be reversed," he said. BoatU.S. forwarded your report to the U.S. Coast Guard, which has the authority to require manufacturers to initiate recalls when boats and associated equipment are defective. Owners of Raymarine model 53 DCS radios that are attached to onboard GPS systems should test their equipment. The letters NMEA should appear on the display screen if the system is working correctly. Contact Raymarine at 603-8815200 for advice about corrective act/on.

I noticed right away that the U-bolts for the trailer tie downs on the transom of my aluminum 1998 Deep V 17 Bass Tracker began to "dimple" the metal in the motor well. The U-bolts are at the low point of the well, exactly where water gathers during normal use, so water leaks in behind the bolts. The wood transom core swelled and put pressure on the thin aluminum sheeting. The constant moisture inside caused the aluminum in this area to corrode. I'm concerned about the integrity of the transom core and believe this should be a warranty item.

L.V., Sudbury, MA

According to the marine surveyor who inspected your boat, "the essential problem lies with poor placement of [the motor well drains] and Jack of bedding compounds" where the U-bolts are installed. The drains allow a certain amount of water to sit in the well at all times, so water exposure is inevitable, leading to corrosion of the aluminum. And, eventually, the wood core could rot. The surveyor suggested that, had the boat's hardware been properly bedded at the factory and if the boat's design didn't allow water to collect in the motor well, the damages you report wouldn't have developed. Despite the design questions and the potential for transom core deterioration, Tracker denied your claim because corrosion isn't covered by their warranty. The company did, however ask to review your surveyor's report again. We're awaiting their response.

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