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This just didn't look right to a gumshoe who'd spent 14 years investigating mail fraud, especially near Christmas, which is peak scam season. According to her federal court declaration, this is what Groome's ensuing investigation found:
Dreamshare International's address is a commercial mail receiving agency, where the first check for rent bounced. So did the $32,000 in checks used to pay various newspapers for advertisements. They are still unpaid.
On Dec. 4, the Postal Service began withholding mail from delivery to Dreamshare for suspicion of fraud. Two days later, Smith was sitting in Groome's office with some explaining to do.
In the meeting, Smith told her he'd secured six different driver's licenses and identification cards during a four-month period because he had lost the others. He said he did not currently have access to a Lamborghini but was hoping to have one by the following week, using funds from the customers who were responding to the ads. And he was hoping to make good on the worthless checks he'd given the newspapers.
The vehicle identification number in Dreamshare's advertisement belonged to a Lamborghini, but not one Smith owned. This one was at Veracom Lamborghini in San Mateo, where the owner said that Smith had come in and talked to him about the idea of renting the car to the public. But the owner said he wanted no part of such an arrangement. Smith left with the vehicle identification number.
The Postal Service refused to release Dreamshare's mail, which included more than 150 responses to the newspaper ads, and filed a complaint against Smith in federal court. They also sent out a press release announcing their investigation, which was picked up by several Bay Area newspapers and television stations.
Dreamshare International's business license in Newark expired at the end of 1996. Inquiries to the Better Business Bureau prompt a recording that mentions the Postal Service's restraining order.
By late January, Smith had secured access to a Lamborghini, and yet another address. He sent out a notice to customers stating, "We have been experiencing an interruption with our mail service," and asked them to reissue their checks to Auto Sport International in San Jose.
Auto Sport is owned by car collector Andrew Douglas, who also alleges to own the Lamborghini in the mall. His explanation for going into business with Smith is simple -- money.
"So far this month, we've got $10,000 in test drives," says Douglas. "That's only one month. The payment on the car is $2,700 a month. So they tear it up; I'll go buy another one. I'm putting out $2,700 a month in car payment, and the car sits and does nothing. I might as well put it to good use."
Earlier this month, Smith signed an agreement that he would not misrepresent anything sent or received through the mail, which effectively ended the federal court case.
"As long as he can pull this thing off without misrepresenting anything through the mail, it's out of our jurisdiction," says Tom Taylor, spokesman for the Postal Service.
Smith says the whole postal investigation was overblown. "The Post Office already had me summed up before I got there," explains Smith. "I felt it was unfair."
Smith says that he had access to the yellow Lamborghini in the mall all along. But he was going to use that only as an alternate, because market research had shown him that people preferred a red Lamborghini.
"The only thing I did wrong, I shouldn't have put the vehicle ID number in the paper," he says. "This whole thing with the Post Office was absurd. I went around it anyway."
"Even without the Better Business Bureau, I still have my own standard of ethics."
Beyond the paid advertising, a handful of newspapers and television stations helped to promote Smith's unique Christmas gift idea before the Postal Service investigation.
In mid-December, San Jose Mercury News columnist Dennis Rockstroh wrote about Dreamshare, saying:
"Business is so good, Smith has turned down interviews with three television stations and asked me not to publicize his order telephone number." And: "This is a new business for Smith, who until now, was a house painter."
On Jan. 30, more than a month later, and after the postal investigation had been reported, Rockstroh wrote another column with the headline: "Behold, a Lamborghini! Ride hawker's off the hook." In it, he told readers that the Lamborghini deal was back on, despite the Postal Service.
About the first of December, Jaclyn Hunter saw the advertisement in the San Jose Mercury News offering the test drives.
"I thought it would be really neat for my husband's Christmas present," Hunter says. "His favorite car has always been a Lamborghini. He started a new job this year, and he's been working his tail off, and it was just something special I could do."
She called the number in the ad and soon received a packet of information in the mail, including a color brochure on the Lamborghini. She sent in $95 for a half-hour test drive and received another packet of information, including the certificate for the test drive she gave her husband for Christmas. But he's never driven the car.
Shortly after Christmas, Hunter heard about the Postal Service investigation. She called and wrote to Smith, requesting a refund. He sent her information on the time-share venture (which includes "a beautiful female escort"). She says she called again and Smith promised her money back by Feb. 15. She hasn't gotten it.
"He's very good at making this stuff look good on paper," Hunter says of Smith. "I normally check into everything, and the one time I don't, something happens. We don't have this kind of money to be tied up in something that's not true."
