LAS VEGAS (KTNV) — Allegations in a lawsuit filed by a Las Vegas man that one of the biggest delivery companies in America is re-selling its trucks without disclosing the true mileage on some of the vehicles is raising questions.
This matters to you because we're living in a home delivery world. These trucks are converted and used in lots of different ways. And if some trucks driving on your streets and your neighborhood are not as reliable as they're supposed to be, that's a problem.
13 Investigates spoke to the man behind the lawsuit.
"What brought us here today is I'm a commercial truck dealer," Tom Layton says.
Layton is based out of Henderson and has been buying and selling trucks for 36 years.
NEW DEVELOPMENTS: FedEx sold thousands of vehicles with replaced odometers, class action lawsuit alleges
"Over the last several years, I've noticed that some of the commercial trucks that have been going through my dealership had issues with the odometers," he says.
Layton made the discovery in March 2017 when he sold a Freightliner delivery truck to a FedEx contractor in Washington state.
"About a month after the sale, the FedEx contractor contacted me and said, 'Hey! What are you trying to pull here?' And I said, 'What's wrong?'" Layton explains. "And he said, 'I took this into Freightliner and had the vehicle hooked up to the computer. And it has over 400,000 miles. And your odometer says 180,000 miles.'"
He immediately bought the truck back and tried to figure out why the readings didn't match up.
Layton: "And through our research, found out that the odometer was changed by FedEx, not by any car dealership."
13 Investigates: "How did you learn that?
Layton: "By comparing the odometer."
Layton says the truck didn't have the original analog odometer those in the industry familiar with these vehicles would expect to see on a truck this age.
Replacing an odometer is not illegal, but according to federal law, it does need to be disclosed.
We've learned there are two big tells that an odometer has been replaced. For starters, four bolts show that the instrument panel is not the original. Plus, it is a digital odometer.
The original odometer doesn't have the same bolts around it. And it's analog.
Layton filed this federal lawsuit in 2017 under the name of his company, Nevada Fleet, after he looked at the details of hundreds of former FedEx'rs he bought.
Layton alleges in his lawsuit FedEx and its agents failed to disclose the actual miles of some of the former FedEx trucks he bought at auctions.
In court records he alleges, "Through the course of our litigation of the 400 or 500 vehicles that I've purchased, we've found that approximately 96 to 100 of them has had their odometers replaced."
Layton bases that on information he found during the legal process.
But FedEx denies the allegations claiming the company "... Has no involvement in the sale process." and a third party, a company called ARI is contracted to do it. In court records, FedEx says "ARI purchases the vehicle from FedEx, takes title of that vehicle... and has it delivered to auction."
ARI is not named as a defendant in the lawsuit.
Again, it's important to note, replacing an odometer is not a crime. There are legitimate reasons to do so. And it's not "unreasonable" according to FedEx, given the "rigorous daily demands" on their vehicles.
But federal law says ideally the new odometer should be set with the vehicle's actual miles and it has to be disclosed with this sticker attached to the door jamb. If the actual miles are unknown, that needs to be documented too.
Layton claims those steps are not happening.
Layton: "They're replacing the odometer with one, starting it back at zero. And running 100, 150, 180-thousand miles on it and then selling it."
13 Investigates: "And there's no disclosure in the paperwork to let you know how to do the math yourself?"
Layton: "None."
As with any used vehicle, lower mileage usually means higher resale value.
Brandon Fernald is Layton's attorney.
"You're selling a van for twice the amount of money and that money is percolating up the chain with FedEx ultimately getting the lion's share of it," says Fernald. "You know, usually these things all come back to money."
As Layton alleges in the lawsuit, it works like this: FedEx contracts with that fleet management company, ARI, which sells the retired trucks through auctions across the country. And "FedEx receives any profit from the sale of said vans over and above a set amount paid to ARI. Thus, the greater the sale price at auction, the greater the profit received by FedEx."
FedEx argues they're not the ones setting prices or selling the trucks.
"I call it willful blindness," says Layton.
An example he points to in court records is a former FedEx truck with 346,976 but the odometer showed only 86,100 because it was replaced not once but twice before selling at auction for a premium price.
Despite a legal battle going into its fourth year, Tom says he still sees the trucks for sale nearly every day.
"I see them advertised on eBay, AutoTrader, TruckTrader as low mileage step vans," says Layton.
He points to an online auction that shows the potential price difference where two former FedEx trucks sold back to back. The first -- a 2001 with 299,710. It sold for $1550. The next one, same make and model -- but older -- a 1997 with only 43,000 miles sells for $6800.
The buyers are sometimes self-employed like home builder Brian Fisher. He found a former FedEx truck with 67,000 miles on the odometer.
"And that caught my attention. I wanted a low mileage vehicle," says Fisher.
It cost him about $10,000, but soon he says the truck was having problems.
"A year and a half after I received it," Bryan explains. "I started questioning the true value of the vehicle for being such a low mileage."
Layton believes the odometer was replaced on Fisher's truck because it's one of those digital ones.
Fisher says no one told him the actual miles. Layton recently bought the truck from Fisher and is asking FedEx for the maintenance records.
Layton claims he was the subject of retaliation when he questioned auction houses and FedEx's fleet management company, ARI, about trucks like this.
"Their final response was to kick me out of the auctions," says Layton. "After 36 years of being in this business, I've been banned and barred from every auction that sells FedEx trucks."
That ban effectively put Layton out of business, which is why he's taking the fight to court.
Fernald: "Nobody seems to be interested in telling the truth about these odometers, number one. And number two, everybody seems to want to keep going with the same business as usual."
13 Investigates: "And silence the messenger?"
Brandon: "And silence the messenger."
But Layton won't be silenced because he says in addition to the trucks he bought, FedEx acknowledges in court records they replaced the odometers on 1611 trucks in a 7-year period.
And according to his calculations, collectively, on at least 96 trucks he bought, 18.5 million miles were not disclosed to him.
"And 18 and a half million miles is the distance to the moon and back 36 times," says Layton. "I'll never look at the moon the same again."
FedEx declined our request for an on-camera interview and they said they would not comment on this active litigation.
We reached out to ARI multiple times over several weeks but they haven't responded.
By contrast, we learned UPS destroys their retired vehicles, recycling some of the materials. In a statement, it said "We have never, in our 114 years of service, relinquished or sold our vehicles" to protect brand integrity and avoid liability.
