Driving-school mogul charged

He broke laws by skirting vehicle sales and use taxes, prosecutors say

September 16, 2006 

All Gary Probst had to do was pay the sales taxes on cars he bought to train teen drivers. Washington state attorneys say he didn’t.

For what amounts to $14,052, Washington’s driving-school king could see his empire crumble.

State attorneys on Friday charged Probst with first-degree theft, contending he pulled a sleight-of-hand to evade paying Washington state sales taxes.

Probst is scheduled for arraignment in Thurston County Superior Court at 9 a.m. Sept. 28.

The charge is a felony punishable by jail time and fines, but the stakes are higher for Probst, who owns or co-owns 41 of the more than 200 commercial driving schools in Washington.

If convicted, he could face a 10-year suspension of his licenses to own schools and teach drivers. His schools operate under three franchise names: Diamond Driving School, America’s Best Driving School and Quality Driving School.

And additional criminal charges could follow, assistant attorney general Scott Marlow said Friday.

Court documents show that investigators also examined allegations of forged documents, violations of vehicle title and registration law and deliberate evasion of employee insurance premiums.

“This is the tip of the iceberg as far as money owed to the state of Washington,” Marlow said of the theft charge. “This is kind of the quick strike, if you will.”

Probst did not respond to a telephone call Friday from The News Tribune. His attorney, Judson Gray, did not respond to a phone message.

Prosecutors contend Probst bought 16 cars in Oregon - which charges no sales tax - between 2001 and 2005. At the time, he held valid driver’s licenses in Oregon and Washington, a violation of law in both states.

Probst initially registered the titles to the home address on his Oregon driver’s license, prosecutors say. That address is a mailbox in a Portland shopping center.

Probst lives in Midland, near Spanaway, and his base of business operations is in Lakewood.

He ducked tax, charges state

By claiming he lived in Oregon, prosecutors contend, Probst exploited a Washington law that allows vehicle owners to avoid paying sales and use taxes if they have owned their cars for at least 90 days in another state before transferring the titles to Washington.

When the 90-day period elapsed, Probst transferred the vehicle titles to Washington, according to court documents.

“The only reason for Probst’s titling the vehicles in Oregon was to evade payment of Washington State sales/use tax by falsely claiming Oregon residency at the time of purchase,” the charges state.

The charge against Probst reflects almost a year of investigation and the combined efforts of five state agencies: the Department of Licensing, the Department of Revenue, the Department of Labor and Industries, the Washington State Patrol and the Attorney General’s Office.

The criminal case began in November 2005 when a State Patrol investigator began gathering evidence.

It later was handed off to James P. Green, an investigator with the Attorney General’s Office who previously spent 21 years as a special agent with the Internal Revenue Service.

It continues today, Marlow said. “Based upon our review of his criminal schemes and enterprises, we continue to look further into it,” he said.

A shady history

The theft charge is only the latest legal difficulty for Probst, who also faces complaints in civil court of falsifying his driving school records. A hearing on those complaints is scheduled to begin Oct. 4 in Tacoma.

A News Tribune series published in 2005, “License to Shill,” profiled Probst’s 10-year battle with state regulators and revealed more than 40 state investigations of his driving-school franchises.

The series showed that about 25,000 teens who attended Probst’s schools between 2001 and 2005 received shabby training. Some received credit for classes they never attended. Others were taught by unlicensed instructors, including convicted felons, using false names.

Following publication of the series, the state Department of Licensing charged Probst with falsifying his school applications by failing to disclose a 1990 military conviction. Probst, a former military chaplain stationed at Fort Lewis, was discharged from the Army for lying about his service record and wearing medals for bravery he never earned.

In August, the Department of Licensing amended the charges, alleging that signatures associated with Probst schools in southwest Washington were forged. Probst is contesting the administrative charges against him.

State lawmakers took up the driving-school issue during the 2006 legislative session, passing laws requested by the Department of Licensing that stiffened the requirements governing commercial driving schools.

Liz Luce, director of the Department of Licensing, said Friday that she made a personal effort in the pursuit of Probst. Most of his activities and earlier state investigations of his schools took place before she took office in spring 2005.

“I made a real push to take another look at the Gary Probst case,” she said. “I basically started going door to door. The three agencies all helped to pay for that investigation. I really felt it was important for the safety of the kids that take these driving-school courses.”

While the criminal charges and the pending administrative hearing create problems for Probst, his schools throughout the state remain open as the legal process continues. In January of this year, his son, Sean Probst, tried to open more Dynasty Driving schools in the same locations used by his father.

Those applications haven’t been approved, said Brad Benfield, spokesman for the Department of Licensing. The agency has requested more information from Sean Probst and received no response, he said.

Driver beware

Another Probst-linked franchise has surfaced in recent months, Benfield said: Premier Driving Academy. The applicant is Ferdinand Orbino, Probst’s son-in-law. The applications for Premier schools haven’t been approved either, Benfield said.

Luce said she hopes the filing of criminal charges against Probst will ease the concerns of other driving-school owners who have criticized the agency’s response to Probst and complained about his tactics over the years, such as undercutting their prices.

“It’s very difficult for them when one person doesn’t pay his fair share, such as evading taxes on the vehicles,” Luce said. “That gave him an unfair economic advantage over the other schools. … To finally get to this point is an excellent day. It’s a big win for everyone.”

Sean Robinson: 253-597-8486

sean.robinson@thenewstribune.com

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