Rothstein bought a Freightliner Columbia tractor in December 2005 for $75,000 from DeNaples Auto Sales in Dunmore, Lackawanna County. The truck, which typically sold for $125,000 or more, had come from New Orleans, where it was parked when Hurricane Katrina devastated the city in August 2005.
Rothstein says he was told by Dunmore Repair, which handled the sale for DeNaples Auto Sales, that floodwaters reached only halfway up the tires and that the vehicle had not been damaged by the storm. The truck came with a full warranty and a clean title. The odometer read 132 miles.
''It was spotless and looked like it was in great condition,'' Rothstein, the owner of Rothy's Inc. near Scranton, said in a recent interview.
But three months after Rothstein bought the truck, its engine caught fire. And when Rothstein brought the rig in for repairs, he learned that his truck and the 29 others had been submerged during Katrina and sold as salvage to DeNaples Auto Sales for $6,000 each by LeasePlan USA of Georgia.
Pennsylvania State Police, acting on a referral from the FBI, began investigating the case early last year as possible ''title washing'' of the Hurricane Katrina trucks, which were purchased with a $180,000 DeNaples Auto Sales check, according to Ralph Periandi, a former deputy commissioner for the state police. A law enforcement source said the investigation remains open.
Title washing, a felony offense, entails dealers buying flood-damaged vehicles, cleaning them and selling them in different states without disclosing the damage on the vehicle's title, as required by law.
State police spokesman Jack Lewis and spokeswoman Cpl. Lynette Quinn did not return calls for comment on the Katrina-related probe.
Thirty years ago, DeNaples pleaded no contest to defrauding the federal government of more than $500,000 for cleanup work associated with another natural disaster, Hurricane Agnes.
DeNaples currently faces four perjury counts for allegedly lying to Pennsylvania gaming regulators to obtain a slots license for Mount Airy in Monroe County. DeNaples has proclaimed his innocence.
The Pennsylvania Gaming Control Board, after learning about DeNaples' involvement with Rothstein and the Katrina trucks from its investigators, referred the matter to the Department of State, which licenses auto dealers. The department concluded there was no fraud in the titling of the trucks. The board then awarded DeNaples a slots license in December 2006.
The trucks were one of several issues involving DeNaples brought before the board before its vote. Among them: allegations of ties to organized crime. The board's duty was to determine whether DeNaples was suitable to hold a slots license, as per state gaming law.
Tad Decker, the former gaming board chairman, said the board looked ''thoroughly'' at the Katrina truck matter. ''We had suspicions it might be something,'' Decker said, ''but it turned out not to be an issue.''
A DeNaples spokesman, Kevin Feeley, said ''a considerable amount of evidence was presented to the gaming board and they concluded, correctly, that there is no basis for any claim that these trucks were bought or sold in any improper way or titled in any improper way.''
Feeley also insisted that the trucks were not ''salvage vehicles, no matter what is said.''
The trucks were leased by Air Products and Chemicals of Trexlertown, and they were parked at an Air Products facility in New Orleans when Katrina struck. The trucks were submerged in the subsequent flooding that devastated New Orleans, so the leasing company, LeasePlan USA, asked Air Products to help find someone to buy them as salvage.
''We have a fleet of trucks, and we know people out there who are interested in buying [damaged] trucks, and we contacted them. Our sales documents clearly identified the trucks as being water-damaged,'' said Art George, an Air Products spokesman.
One of those contacted was Louis DeNaples, who offered $180,000 for the trucks, said George Astraukas, a LeasePlan USA vice president. DeNaples first wrote a check from Keystone Landfill Inc., which DeNaples owns. But that check was rejected because it had to come from a licensed auto dealer, said Astraukas, so DeNaples issued and signed a check from DeNaples Auto Sales.