NJ Car Dealer, Subject of ABC News Probe, Ordered to Repay Customers Sold Sandy-Damaged Cars

— -- A New Jersey car dealership operator will have to pay back customers who unknowingly bought Superstorm Sandy-damaged cars from his lot, thanks in part to a five-month "ABC's The Lookout" investigation into flooded cars being sold on used car lots.

Jonathan Olin, 42, the operator of used car dealership D&D Auto Sales in Old Bridge, N.J., was accused of using false vehicle titles to sell the cars to unsuspecting customers from February 2013 through July 2013, according to prosecutors.

Olin pleaded guilty this week to second-degree theft by deception, and faces three years in state prison. He was also ordered to pay full restitution to the victims.

"ABC's The Lookout" team went undercover last summer at D&D Auto Sales, where they discovered a 2006 Ford F-350 truck seriously damaged by Sandy being sold on the lot for $19,999. The truck's Vehicle Identification Number (VIN) and auction records indicated it was damaged by a flood.

A D&D salesman sold the car to an "ABC's The Lookout" producer for its asking price and referred to a flood alert on the vehicle's CarFax report as "a glitch."

But when "The Lookout" team brought the truck to Allan Picker, owner and certified mechanic at All-Time AutoBody in Point Pleasant, N.J., he discovered the car had serious damage, including a corroded transmission and potentially hazardous airbags that could have randomly deployed while driving.

When "The Lookout" report aired in July 2013, D&D Auto Sales responded to team's findings, stating, "D&D Auto Sales sincerely regrets the unfortunate misrepresentation of the product by the salesperson. We do not condone such business practices and have terminated the salesman as a result of his independent action. This is in no way reflective of typical business practices at D&D."

But prosecutors said that wasn't an isolated incident and that the dealership knowingly sold other storm-damaged cars.

When prosecutors filed the charges last year, they said the dealership acquired eight vehicles at auction that sustained flood damage during Sandy and were auctioned by an insurance company "for parts only," but the defendants allegedly had fraudulent "clean" titles issued for the vehicles and sold seven of them to customers who were unaware of the flood damage.

Jack Douek, the D&D Auto Sales salesman who sold the car to an undercover "ABC's The Lookout" producer, now faces three pending charges, including conspiracy to commit theft by deception. ABC News' requests for comment from Douek were not returned.

The New Jersey Attorney General revealed an employee of the Freehold Motor Vehicle Agency, Jessie Dinome, was using a state computer to create false clean titles for the flood cars. She pleaded guilty and faces up to a year in county jail.

New Jersey Attorney General John Hoffman said in a news release last year that the New Jersey Motor Vehicle Commission referred the case to the state's Division of Criminal Justice after ABC News aired its investigative report on flood vehicles ending up on used car lots. The vehicle commission also received information from the National Salvage Vehicle Reporting Program.

An estimated 250,000 cars were submerged for days in corrosive saltwater after Sandy pummeled the Northeast in October 2012, according to the National Insurance Crime Bureau.

CarFax estimates that more than 100,000 Sandy-damaged vehicles ended up back on the road.