It was a business deal with a convicted sex predator that landed Nicholas Reinhart in deep trouble.

Or, at least, in deeper trouble.

It was 2009.

The convict, a wealthy Philadelphia-area businessman named Andrew Mogilyansky, was facing prison on charges of sexually assaulting three teenage orphan girls in Russia.

Reinhart, a 58-year-old luxury auto dealer from Ephrata, agreed to sell dozens of cars on consignment for Mogilyansky's company, Ifex Global Inc.

But according to Philadelphia court papers, the parties disagree on how the deal went down.

Mogilyansky's attorneys claim Reinhart and three of the 10 or so companies he controls transferred the vehicles' titles and sold some of the cars without Ifex's consent.

Reinhart's attorneys vigorously dispute the claims.

The Ifex case set off a continuing legal tug-of-war over the vehicles and sparked at least one additional lawsuit.

Reinhart, meanwhile, is in tough legal straits here, too.

Ephrata police arrested him last month and charged him with taking $151,050 but failing to deliver a couple of Mercedes-Benzes to Oleg Zhuiko, another Russian car dealer from the Bucks County area.

A preliminary hearing is scheduled for 9 a.m. Wednesday at District Judge Jene Willwerth's office in Ephrata.

Reinhart, who was charged with failure to make required disposition of funds received, is the principal owner of Black Tie MotorCars International, 515 N. Reading Road, Ephrata, and the former owner of Reinhart Ford.

His troubles seem to have been brewing for several years.

In 2006, court records show, Reinhart began to take on large amounts of debt.

In August 2008, the Internal Revenue Service filed a tax lien against Reinhart and his wife, Denise.

The state Department of Revenue filed a lien in October 2008.

The federal claim was satisfied in November 2008. That same month, though, Wachovia Bank hit Reinhart and his wife with two judgments totaling more than $4.7 million.

Those judgments were withdrawn in January 2009; court records listed no reason.

Nine months later, though, the Reinhart companies involved in the Ifex lawsuit declared bankruptcy.

This past April and May nine bank judgments were filed against the Reinharts in the Lancaster County courthouse; he's charged with defaulting on business loans totaling nearly $13.7 million.

 Lancaster County District Attorney Craig Stedman said last week that he could not comment on the charge against Reinhart, who remains free on bail.

Ephrata police Detective Graeme Quinn said, however, that his department is preparing additional criminal charges against the auto dealer.

"They're complicated cases," Quinn added, declining to comment on them or on widespread rumors that the state or feds are involved.

"I'm not saying there's a federal case or there's not a federal case," Quinn said.

Still open, meanwhile, is an inquiry into the April 9 fire that leveled the 12-year-old estate house built by the Reinharts at 450 Hertzog Valley Road, West Cocalico Township.

No one was in the house at the time of the fire, police said. The property had been foreclosed on by Penn Liberty Bank in March, according to court records. The loss was estimated at $2.4 million.

"Quite frankly," said state police Fire Marshal Brian Herr, "I don't know that we'll ever determine the cause."

Open for business
Attempts to contact Reinhart over the past two weeks were unsuccessful. His defense attorney in the Zhuiko matter, Michael Malloy, did not return three calls to his office in Media.

Reinhart, who reportedly grew up in the Philadelphia area, has long been a prominent figure on the local car scene.

He lived expansively, according to a former Reinhart Ford employee who spoke on condition of anonymity.

The man said his former boss is a licensed pilot whose family owned several planes, boats and houses, including an exclusive property in the Sailfish Point community in Florida.

Reinhart's wife maintains a home there, according to court records. A foreclosure on the property was initiated last year.

Meanwhile, the ex-employee said, Reinhart "owned" the local car market for many years. "He had a big chunk of it."

Reinhart Ford, 620 N. Reading Road, distinguished itself by offering customers generous specials and financing deals, the ex-employee said.

In a 1999 promotion in the Reading Eagle, for example, Reinhart proclaimed an "emergency selloff" of half of his overstocked inventory.

In 2003, around the time Reinhart Ford became known as Victory Ford, one of Reinhart's companies, DB&E Enterprises LLC, spent nearly $2 million to buy the property that became Black Tie MotorCars International.

Car dealer Michael Wanner purchased the Victory Ford dealership and property from Reinhart in 2008.

Black Tie MotorCars was open for business on a recent Thursday, and open to the public, as signs out front noted.

Red, white and blue streamers rustled in the breeze; several high-end cars populated the spacious showroom.

A man who identified himself as one of Reinhart's sons declined to talk about legal matters involving his parents.

Going in debt
The father and his businesses took on significant amounts of debt in the mid-2000s.

According to documents filed with Lancaster County Court between 2005 and 2008, several of Reinhart's businesses, including Dunphy Nissan Inc., BPC Partners, SNL Trading Inc., DB&E Enterprises LLC, Reinhart Partners L.P., Three Arrows Enterprises Inc. and Autohaus Acquisition Inc., along with Reinhart himself, borrowed tens of millions of dollars, most of it from Susquehanna Bank and Wachovia Bank.

Autohaus Acquisition is not the same business as Autohaus Lancaster Inc.; the latter was founded by Herbert Wilhelm Wanner — Michael Wanner's father — and is now owned by Herbert's wife, Marianne, according to documentation from the Pennsylvania Department of State.

At least $3 million came in the form of "floor plan judgment notes" — essentially a bank loan used to buy inventory, vehicles that a car dealer would sell on the floor of a showroom. Other borrowing came in the form of promissory notes; court documents do not specify what the money was used for.

But the court records show that by early 2007, Reinhart and his businesses had run into difficulty repaying some of the loans.

In a complaint filed in Lancaster County Court Nov. 14, 2008, Wachovia Bank filed a "complaint in confession of judgment," against Dunphy Nissan and seven other Reinhart companies — along with Nicholas and Denise Reinhart — seeking $4.73 million in unpaid principal, interest and other fees. The complaint noted that Reinhart and his companies had taken out 14 separate loans with Wachovia, totaling $31.23 million, and still owed money on two promissory notes, one for $1.84 million, a second for $2.88 million.

Reinhart and his companies had agreed to repay the money, but the complaint asserted that they failed to make payments, and in July 2007 the bank deemed Reinhart and his companies in default.

The complaint was withdrawn, however, in January 2009; no reason was given in court documents. A call to Jennifer P. Knox, an attorney with the Philadelphia firm of Reed Smith LLP, which handled the case, was not returned.

But Reinhart had other problems. In August 2008 the IRS had filed a federal tax lien against Nicholas and Denise Reinhart in Stuart, Fla., totaling $203,692.94. The lien was released in November 2008, after the Reinharts paid up.

But in October 2008, the Pennsylvania Department of Revenue filed a lien against Nicholas Reinhart for $54,909.57.

In January 2009, he sued Michael Wanner in Lancaster County Court, claiming that Wanner, his wife, Victoria, and JMG Realty LLC had retained Reinhart himself as a consultant for a three-year period ending May 16, 2011, and were to pay Reinhart $1.05 million.

The Wanners, the complaint asserts, agreed to make monthly payments but missed three, putting them in default. Reinhart demanded $1.12 million in principal, interest and fees. Wanner responded with a counterclaim accusing Reinhart of "fraudulent misrepresentations" in the sale of the Ford dealership, which, among other things, resulted in a lien of more than $6 million being attached to the property. That lawsuit is still wending its way through the local court system.

The Ifex case
Several months later Reinhart found himself immersed in another lawsuit, this one filed in the Philadelphia County Court, asserting that some of the cars he was selling weren't his to sell.

Ifex Global Inc., a firm "in the business of automotive import and export," according to the complaint, alleged in the civil suit that it had reached an oral agreement with Reinhart and three of the companies under his control — Black Tie MotorCars Inc., of Ephrata; Autohaus Inc., of Harrisburg; and Autovest Leasing Inc., of Mechanicsburg — to sell 41 cars on consignment. Reinhart's dealerships would sell the cars — Mercedes-Benzes and BMWs, among others — then pay the proceeds to Ifex. All parties agreed that all sale prices had to be authorized by Ifex in advance of the sales.

And from March to May 2009, according to the complaint, the deal worked smoothly, and 14 cars were sold.

Then in May 2009, according to the complaint, Reinhart asked an Ifex employee to place all of the "Manufacturers Statements of Origin," or MSOs, with Reinhart for "safekeeping." The MSO named Ifex and a subsidiary, Costa Consultants LLC, as owner of the vehicles, meaning the cars couldn't be sold without Ifex's express permission. But, according to the complaint, Reinhart said "it would be easier to sell the Vehicles because [Reinhart] could show the MSOs to prospective buyers to demonstrate that he had all necessary documents 'on hand' to sell the Vehicles." Reinhart also, according to the complaint, had the Ifex employee sign the reverse side of the MSOs — which, the complaint asserts, the employee wasn't authorized to do.

The next month, the complaint asserted, the defendants "transferred MSOs to Titles through PennDOT naming themselves as owners of most or all of the unsold vehicles" and "ceased paying [Ifex] the sale proceeds."

"With the titles in their names," the complaint asserts, "Defendants now have the ability to dispose, sell or encumber Plaintiff's Vehicles without its prior knowledge or authorization."

Ifex representatives tried to find out what was going on, the complaint asserts, but had a hard time doing so. On one occasion, according to the complaint, an Ifex representative showed up at Black Tie and spent all day in the waiting area, only to find that "Defendant Reinhart refused to meet" with the Ifex people.

"Eventually," the complaint asserted, "Defendant Reinhart was seen sneaking out the back door of his dealership in order to evade further inquiries by Plaintiff's representatives."

Another time an Ifex attorney was told that the titles were held in a safe to which only Reinhart had access — and Reinhart "would not be present for the remainder of the business day," according to the complaint. On a third occasion, an Ifex attorney was told Reinhart would be available to discuss retrieval of the titles and unsold vehicles, and that the lawyer should continue to wait. "Several minutes later," the complaint asserts, "Defendant Reinhart's employee informed Plaintiff's counsel that Defendant Reinhart had a doctor's appointment, and had left the dealership for the day."

Ifex sought damages "in excess of $50,000" and a special and preliminary injunction to prevent Reinhart and his companies from selling the remaining vehicles, and to furnish a complete accounting of all proceeds from the sale of any vehicles they couldn't return to Ifex.

David P. Heim, the Philadelphia attorney who filed the complaint, did not return a phone call and e-mail seeking comment.

Reinhart, through his attorneys, fired back in his response and counterclaim, telling an entirely different story.

Reinhart's attorney, John Mattioni, of the Philadelphia firm Mattioni LTD, wrote in the complaint that Reinhart had been approached by the president of Ifex, a Russian national, Andrew Mogilyansky, because Mogilyansky had a new car inventory he couldn't sell because he was on his way to prison.

Making deals
Unstated in the complaint, but reported by several media outlets, was the reason Mogilyansky was being jailed: sex tourism.

Specifically, Mogilyansky was charged in 2008 with "traveling to orphanages in his native country to molest young girls and hire them out as prostitutes," according to a Dec. 4, 2008, story by CBS3 Philadelphia.

"A federal indictment alleges that Andrew Mogilyansky, 38, of Richboro, molested three girls brought to his St. Petersburg apartment from a nearby orphanage in late 2003 and early 2004, then recruited them into an online-based child prostitution business in Moscow that he ran with several other people.

"The girls were 13 and 14 years old, Acting U.S. Attorney Laurie Magid said," the report noted.

In May 2009, he pleaded guilty only to being a customer of the prostitution business and having sex with the girls; on Sept. 16, 2009, he was sentenced to eight years in federal prison.

Several times, Reinhart's response and counterclaim mentions Mogilyansky's incarceration. Because "Mr. Mogilyansky was incarcerated in federal prison ... [he] was not available to sell the Vehicles himself," Reinhart's response asserts. Rather, Mogilyansky told the defendants to "sell them 'for whatever Defendants could get' "; and it was Mogilyansky's idea to place the MSOs with Reinhart to expedite the sale of the vehicles, because Mogilyansky and his wife "were in urgent need of money to pay for [Mogilyansky's] mounting legal fees and other personal expenses."

Indeed, another 109 vehicles were supposed to be consigned to Reinhart for sale, his response asserts, and he'd found buyers for 16 of them — but Mogilyansky's wife sold them to other buyers and precluded Reinhart from collecting a commission, according to his response.

As for the vehicles that were consigned to Reinhart and his companies, they "have either been sold or returned to Plaintiff and an accounting of the proceeds of the sale has been provided."

And Reinhart brought up a new matter: An assertion that there had been another deal with Mogilyansky to liquidate a Mitsubishi dealership owned by another Mogilyansky company called R.A.P. Industries.

Reinhart asserted that Mogilyansky had appointed him general manager of the company in December 2008, and that in addition to closing down the firm, he was to assist "in the sale of certain realty owned by Ifex Realty," another Mogilyansky company, and assume responsibility for the reimporting "designated luxury vehicles held in Bremerhaven, Germany back to the United States for sale in the United States market." These, Reinhart asserted in the counterclaim, were among the cars that were consigned to him for sale.

His counterclaim accused Mogilyansky of breaching his oral contract and demanded the court award Reinhart and his companies $50,000.

A woman who answered the phone at Mattioni LTD said none of the attorneys involved in the case would be interested in commenting for this story.

MSOs forged?
The civil case was deferred in October 2009, preempted by another court case — the bankruptcy filings by two Reinhart companies, Three Arrows Enterprises Inc. (doing business as Black Tie MotorCars), and Autohaus Acquisition Inc., on Sept. 19, 2009.

In a subsequent "adversary complaint" filed with the bankruptcy court, Ifex Global and three related companies alleged that the civil case pushed Reinhart's companies into bankruptcy, noting that in an injunction hearing following the filing of the civil case, it was revealed "that Defendants had in fact sold all but 5 vehicles," and claiming that Reinhart's "employees and agents" had forged the MSOs for 14 vehicles.

"With their theft fully revealed," asserted Ifex attorney Heim in the bankruptcy complaint, "and within 3 weeks after Plaintiffs discovered the forgeries, on September 16, 2009, Defendants filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code, and subsequently sought to stay the underlying civil action."

Ifex also argued that Reinhart's companies should not be permitted to discharge the debts they owed to Ifex because they involved money and property obtained by "false pretenses, a false representation or actual fraud."

Ifex then began to tangle with Susquehanna Bank, which asserted that it held a first-priority interest in "all inventory of motor vehicle units and all proceeds from the sale of motor vehicle units." Some of those "units," Ifex argued in a Jan. 20, 2010, objection to the bankruptcy cases, belonged to Ifex; indeed, Ifex had filed a writ of summons in Lancaster County Court on Dec. 29, 2009, and wanted "to determine whether [the bank] received the funds that the Debtors stole, which IFEX believes were transferred to Susquehanna by Debtors with the actual intent to hinder, delay and/or defraud IFEX from recovering the stolen funds." Ifex put the amount of "stolen" funds at $1 million.

But in April after the bankruptcy cases were converted from Chapter 11, reorganization, to Chapter 7 — liquidation — Ifex voluntarily dismissed its adversary complaint, noting that "the relief requested ... declaring the debts non-dischargeable — appears to be moot since Debtors are entities that would not qualify for a discharge under Chapter 7."

Susquehanna Bank, meanwhile, took Reinhart and his companies to court.

On April 26, the bank filed six confessions of judgment in the Lancaster County Court against Reinhart, his wife and companies he controlled, including BPC Partners, SNL Trading Inc. and DB&E Enterprises, seeking nearly $11 million and claiming Reinhart and his companies were in default on six separate loans.

A little over a week later, on May 5, the bank filed another three confessions of judgment totaling some $2.7 million, alleging default on three additional loans.

Timothy Dietrich, of Barley Snyder LLC, Reading, filed the Susquehanna Bank complaints against the Reinharts.

Dietrich said he was not at liberty to immediately discuss the filings.

Briefly jailed
Reinhart was arraigned on the corporate theft charge May 19 before District Justice Willwerth and was committed to Lancaster County Prison.

One of his sons, Nicholas Reinhart III, posted his $75,000 bond the same day, according to court documents.

Sources for this story said they did not know where the elder Reinhart was last week.

However, according to Quinn, the Ephrata police detective, "A condition of his bail was that he had to surrender his passport. That would prohibit his leaving the country –– legally."

On a recent Thursday, the former Reinhart house on Hertzog Valley Road was an island of blackened rubble bordered by tall meadow grass and backed by a thick stand of trees. A small white shed was the only building that could be seen standing.

The long macadam driveway leading back to the ruin was blocked with yellow cord. A sign warned trespassers away.

People who know Reinhart shook their heads over his troubles.

He made a ton of money in the car business, former associates said. He had it made. But something went wrong along the way.

Now, one ex-employee said, "It's coming full circle."

gsmart@lnpnews.com; jrutter@lnpnews.com