Former Indian Motorcycle CEO Rey Sotelo Arrested

Former Indian Motorcycle CEO Rey Sotelo, was arrested June 15 by state and federal agents on suspicion of racketeering and conspiracy of trafficking stolen parts, loan-sharking, and doing business with outlaw motorcycle clubs. Rey Sotelo retired from the business six years ago, but federal prosecutors accused the Gilroy man last week of helping a central California chop shop send a stolen Harley-Davidson to Sweden. Federal prosecutors have used a grand jury’s findings to indict a total of 11 men, including five with law enforcement connections. If convicted for his alleged part in the Scandinavian scheme, Sotelo could spend five years in jail and pay about $250,000. But the former face of the Indian Motorcycle Corporation in Gilroy who posted $100,000 bond- said he has been pulled in with the wrong crowd. He described his association with the other men as “minimal”. Sotelo began working in the motorcycle industry in 1979 when he opened a retail outlet, South County Motorcycles, in Gilroy. In 1995 Sotelo opened California Motorcycle Company in downtown Gilroy as a full-scale manufacturing operation. Indian Motorcycle Corporation bought CMC in 1999, and Sotelo joined IMC’s management team to assist with product development. The charges were announced Tuesday afternoon at the Modesto Police Department. (Via Gilroy Dispatch)

38 Responses to “Former Indian Motorcycle CEO Rey Sotelo Arrested”

  1. 1 rodent Jul 23rd, 2008 at 10:27 pm

    Ah, Indian, 1st Wayne Bachman, 2.Rey Sotelo 3. Whos next?

  2. 2 Nicker Jul 23rd, 2008 at 11:56 pm


    Ah yes, shades of the bad old days….


  3. 3 Karen Jul 24th, 2008 at 8:25 am

    You meet the nice’st people on a Honda.

  4. 4 Gar Jul 24th, 2008 at 11:18 am

    Does this suprise anyone? If I am not mistaken Ray has done time before.

  5. 5 Gar Jul 24th, 2008 at 11:19 am

    That would be “surprise” ….. spelling has been very, very good to me!

  6. 6 madpuppy Jul 24th, 2008 at 11:23 am

    Damn it ! Now where am I gonna get basket cases so cheap ?

  7. 7 MCBill Jul 24th, 2008 at 12:39 pm

    He was arrested a month ago (June 15)… time for an update…

    Having met Rey several times, I’d keep an open mind until there’s some proof. Being charged isn’t the same thing as being found guilty, imho…

  8. 8 Donny Jul 24th, 2008 at 12:48 pm

    Nobody said he was guilty. if you read the article (see link), the info was released by the Modesto PD only 2 days ago. But it looks bad.

  9. 9 [email protected] Jul 24th, 2008 at 1:12 pm

    Yea. This guy was the partner of Murray Smith. “Somehow” they were able to convince Richard Block, the receiver in the Indian Motorcycle receivership, to kick Eller Industries out of their contract.

    Remember the Eller Indian? Designed by James Parker, engineered by Roush Industries, with a management team that included Bob Lutz? Yea… Richard Block convinced the court that Murray Smith and this guy could do a better job. Nice…

  10. 10 Seymour Jul 24th, 2008 at 2:15 pm

    I always thought that Gilroy should have just owned the name and have Eller build the bikes.. win/win/win. Those Eller designs were truly worthy of the Indian name.

  11. 11 Nicker Jul 24th, 2008 at 2:45 pm


    “…Block convinced the court that Murray Smith and this guy could do a better job [than Parker & Roush Industries]….”

    Hell of a sales pitch, that must-a been.

    So, that “convincing” should be in the public record, some place.
    Anyone got a copy of the transcript….????


  12. 12 Pop Jul 24th, 2008 at 3:10 pm

    Hold on guys. The court directed all petitioners to provide in Denver for them to see, a number of working motorcycles.
    Smith went to Sotelo who owned CMC in Gilroy, remember the Captain America and Billy repops that were on the market? That was CMC as well as a line of barhoppers and whatnot.
    Sotelo hung some valanced tin on some off the shelf softail frames, stuffed S&S mills in the belly and plastered Indian decals on them. They satisfied that component of the courts requirements and Eller didn’t.
    That work by sotelo helped Smith win the rights. I don’t like how it played with Eller either but that’s the nutshell version.
    Sotelo sold CMC turnkey to IMC after the award and since he is a savvy enough player, he got his name on a door at IMC headquarters.
    FTR, he bailed on IMC over the bottlecap motor. He didn’t want it released in ’02 because it was still not a proven design, but IMC went ahead, largely becauser the court also held them to a timeline to get to wholly proprietary and they felt they couldn’t wait. Sotelo didn’t agree and he walked.
    He was right, they were wrong and Indian Motorcycle Company folded.

  13. 13 burnout Jul 24th, 2008 at 6:14 pm

    I learn a LOT from this site! peace

  14. 14 lonnie Jul 25th, 2008 at 8:37 am

    Hi Pop.

    With all due respect, that is not how it played out. Eller had purchased Indian Motor Works out of Bayfield, Colorado the summer prior, and together with Jeff Grigsby Eller could easily have delivered a superior bike to that delivered by Murray Smith and Sotelo.

    If you want to read the voluminous detail – and there is a lot of detail – go to

    A couple of docs are from the court record and another is a letter that was written to the members of the estate at the time. There is a lot of detail, but they tell the story. The letter is probably easiest to read.

  15. 15 Pop Jul 25th, 2008 at 3:40 pm

    Right Lonnie, I’ve had time with many of the docs that have been released since that decision.
    Let me be the first to agree, Eller got stiffed. Nonetheless, Labriola provides an accounting through the Eller prism, not untrue but not entirely comprehensive either.
    FWIW, Murray Smith is a scoundrel and a thief. I would just as soon he rot in hell but hell hasn’t done anything to me yet, so maybe I’m not giving hell a fair shake.
    My point is not the behind the scenes machinations of Smith or Eller per se. My point is that Sotelo was a builder / businessman and he had managed to develop a good sized motorcycle concern. He was approached to do a job for Smith and he did it. It was within the law, it was within his area of expertise and it was successful enough to add to the other components that saw the award of copyright slip out from between Ellers fingers.
    I don’t have a particular affection for Sotelo. I’m just sayin… he’s a motorcycle guy that did a motorcycle thing that opened doors for him to be a member of the startup of an iconic motorcycle brand. When his motorcycle / businessman senses told him that it was going off the tracks he got out.
    I don’t see Sotelo as a usurper of Eller. He may be a bonehead fencing stolen iron to Sweden today but Sotelo didn’t deprive Eller of anything.
    There were many issues that contributed to the decision to give the Canadians the marque. Not much disputing that the grift was in. Eller wasn’t his own best friend either. Some of his undoing was bravado and naiveté. There’s a way stuff works and sometimes when the wheels are in motion, trying to drag the train back to the station is a fools errand. That alone didn’t sink him but he sure greased the wheels.
    There’s a school of thought today that the current incarnation is a further proof of the lefthanded way the Indian marque has been handled. Maybe so, maybe not. Time will tell. I have a friend that was prepared to offer significantly more than Stellicans winning offer, but for reasons often proposed but none proven yet he came up empty.
    Indians checkered history makes a great story and Rey Sotelo getting popped for bad paper on a hot ride is another chunk of steak on the plate.
    You can love or hate Indian Motorcycle but the history is a story for the ages and it just keeps getting better.

  16. 16 Gar Jul 25th, 2008 at 4:23 pm

    The bottom line here is not the rehashing of the Indian fiasco ….. it is Ray Sotelo and his current legal problems.

    While I will be the first to state that Mr. Sotelo is innocent until he is proven guilty in a court of law. I must also say that if the Fed’s are the ones who cracked him, he has serious problems. Racketeering is as easy as Mail Fraud to convict on and that doesn’t start to address his other charges. Further, for every charge he now has the Fed’s will tack on the good ol’ “Conspiracy” charges for each count as well ….. you first had to conspire to commit the crime before you actually committed the act. The conviction rate for the Fed’s is upwards of 98%.

    Club Fed may be calling.

  17. 17 Nicker Jul 26th, 2008 at 12:52 am

    Thanks Ionnie,

    Documents are a much better reality check,

    That’s one interesting letter!


  18. 18 lonnie Jul 26th, 2008 at 1:41 pm

    You know Pops – you’re right. Eller was naive because Eller had faith in the system. That was its fatal flaw. Like a babe in the woods, it believed that the federal court system could be trusted to find the facts, let the truth come out into the open, and protect those involved.

    Bravado? I don’t know – perhaps. Eller was confident in its position because it was paying 10 times what CMC was bidding. Not 10% more – but 10 times more, and its motorcycle program was far superior.

    It is j ust taht no one ever imagined that the hammer would come down without there ever being an open hearing on the merits of the different deals. But you’re so right – the fix was in – Block had the judges in his pocket, and Eller’s fate was sealed.

    Were you very close to that whole affair?

  19. 19 lonnie Jul 26th, 2008 at 1:45 pm

    Pop – I think I recognize your writing style. It is terrific. Do you write for Easyrider Magazine and did you write Mile High Mutiny back in 1996 or so?

  20. 20 Nicker Jul 26th, 2008 at 2:30 pm


    “…Indian Motorcycle …. history is a story for the ages and it just keeps getting better…”

    Ya, as long as they’re not playing in my wallet it’s got max entertainment value. But….
    The list of palyers is interesting. Was Meyers originally form CA….?

    It looks like some serious bux were in the process of being pissed away……(??)
    And buying this level of skullduggery (judges, et al?) couldn’t come cheep.
    Some one’s gotta end up footing the bill.

    The question is who and what can they do about it?


  21. 21 Gar Jul 26th, 2008 at 5:30 pm

    Aaaahhhhh, don’t you just love a good conspiracy?

    Judges being paid off, investors getting money under the table, parts kickbacks, gigantic executive salaries, the little guy (who has nothing at risk) getting screwed again ….. it doesn’t get much better than this. I will be willing to bet if we could look into the Indian fiasco deep enough we will surely find the person(s) who shot Kennedy …. Damn government lied to us about that too!

    Excuse me now while I go set in my corner and be paranoid!

  22. 22 Nicker Jul 27th, 2008 at 12:24 am

    “…Aaaahhhhh, don’t you just love a good conspiracy?…”

    Love Hell, Relish with great anticipation…….. 🙂

    Nothing to be paranoid about, history is full of-em and they make better reading than any Tom Clancy drivel.


  23. 23 gustian Jul 27th, 2008 at 7:52 am


    “…..a good conspiracy….”
    “they make better reading than any Tom Clancy drivel.”

    Why not making a film on this one?
    Maybe asking Mel Gibson and Julia Roberts again…


  24. 24 Gar Jul 27th, 2008 at 10:00 am

    God I love this stuff!

  25. 25 lonnie Jul 27th, 2008 at 10:35 am

    That the judges were doing the receiver’s bidding is not a “conspiracy theory”. Richard Block even stated to the court, under penalty of perjury, that:

    “… the Receivership Court will not question that the acts taken by the receiver were valid and proper, whereas another court in another jurisdiction might.”

    Imagine having Federal Court judges willing to do whatever you wanted them to do regardless of the facts? Many thought that may happen in some Banana Republic where the judge is the lawyers brother, but most – including Eller and over 250 members of the receiver’s own estate – bet that it could never happen in America… Well Surprise! Surprise!

    This really is an amazing story, and it will be intersting to see how this next Stellican chapter plays out.

  26. 26 Nicker Jul 27th, 2008 at 4:55 pm

    “…whereas another court in another jurisdiction might….”

    What was-zat all about……!!!!! A judge covering his own ass….????

    Amazing…. !!!!

    It would be interesting to put together a time line of this fiasco,
    And then overlay it with names and links to other such events.

    Stuff like this needs the “disinfacting light of day.”
    Gimmy-more ………… 🙂


  27. 27 hoyt Jul 28th, 2008 at 3:00 pm

    Lonnie – Thanks for the additional information about this case with Eller.

    The Eller story is still extremely frustrating. Eller was poised to deliver great products for the international motorcycle consumer.

    The cruiser designs were superb, classic while at the same time fresh (not an easy accomplishment). Besides the Chief, the one design that I looked forward to was the sportbike. I believe it was a v-twin mounted with a longitudinal crank (ala Guzzi), 52-inch wheelbase, and chain final drive. Lonnie – I would appreciate more information if you have any.

    This would have been a great bike. Buells are cool, but the outsourced 1125R engine and questionable styling leaves a huge market hole ready to be filled by one of the most highly anticipated motorcycles : an American-made sport bike. Something that can give the Ducati 1098 fits in terms of performance, style, and price. Similar to what the new Corvette does to Porsche, Audi, BMW, Nissan, Lotus, etc.

    The post above is an unfortunate story and “innocent until proven guilty” should not be forgotten as some have already mentioned. This story resurrects a much bigger story that deserves to be exposed – for all of motorcycling’s benefit. Perhaps the former executives of Eller will start to re-think the possibilities….

  28. 28 Nicker Jul 29th, 2008 at 12:12 am


    Would you please go to the “Florida motorcycle testing legislation” thread and tell us what the Europeans are doing for MC driver testing & Certification.

    Thanks much in advance.


  29. 29 gustian Jul 29th, 2008 at 9:04 pm

    Hi again Nicker,

    been “out of town” for a while (on holliday in south of France)

    I’m back (alive and kicking, ….lol.)

    I ‘ll get you the information you asked. I’m on night-shift for the moment and have already printed all the recent “official stuff” on “how-to-get-that-most-wanted-piece-of-paper-on-earth”.
    Those are the regulations for Belgium, but in general, those are also the regulations for a great part of Europe.
    As it is not explaned in two seconds, I’ll make an analyse as “good as possible” and post it “as soon as possible”.

    Untill soon,


  30. 30 Nicker Jul 30th, 2008 at 12:54 am

    Hay Gustian,

    Welcome back.

    Go to the First posting of the month.
    The issue is required MC operators testing in Florida.

    What are the EU folks are doing about this stuff……???

    Thanks in advance.


  31. 31 gustian Aug 2nd, 2008 at 12:05 pm

    Thanks Nicker,

    hollidays are nice, but I’m always happy coming home !

    Sorry for the delay, but tomorrow (sunday) , I’m working again on night-shift. I’ll make some time to
    answer your questions.

    Bye then , see ya.


  32. 32 BIGFRED Aug 7th, 2008 at 12:27 pm

    Lets not forget. Rey left a long trail of screwed over friends from the CMC/Indian days. Life long friends that lost a lot, and in some cases lost everything while Rey managed to walk away with his pockets lined with cash.
    Ask around .
    And yes, Rey has had this type of problem before. Its a matter of public record

  33. 33 TwoFeather Dec 19th, 2008 at 8:44 pm

    Rey treated his CMC dealers with respect. With the change over to Indian he little control but worked hard to keep the CMC dealers if possible. He is the fall guy for the bigger crooks at the top of the Indian rip off. I was one of those that got ripped off and I have no hard feelings toward Rey. He was a real biker that got into the bike industry. Unlike the people that ran it into the ground by making automobile dealers into motorcycle dealers. Atleast when it was CMC the dealers were real motorcycle shops that cared about the customer. And so did the people at CMC.

  34. 34 unan Dec 25th, 2008 at 10:50 pm

    funny his kids were at the prestigious Christian school yet he got his bank to start Indian from drug money from Hells Angels. He doesnt hang with the rite crowd. CLean up the south county from this crap.

  35. 35 Reader Jan 13th, 2009 at 10:02 pm

    From the Gilroy Dispatch site on December 17, 2008:

    “…Rey Sotelo appeared in federal court Monday morning for allegedly conspiring with a central California chop shop, but the judge continued the status conference until February, according to court records and U.S. Attorney Laurel Montoya.”

    “Attorneys for both sides will continue to review evidence and paper work until Sotelo returns to the federal court 9 a.m., Feb. 9. He has yet to enter a plea, but has told the Dispatch he is innocent and had no idea the motorcycle shop was trying to export a stolen Harley-Davidson to Sweden without paying the proper tariffs.”

    “The bike in question never made it to Scandinavia, but Sotelo has been charged with conspiracy after state and federal law officers arrested him July 15 in Gilroy for allegedly helping to counterfeit the bike’s official papers. Eight other men throughout Stanislaus County were also arrested that morning for allegedly associating with the Road Dog Cycle in Denair, southeast of Modesto. Federal prosecutors have used a grand jury’s findings to indict a total of 11 men, including five with law enforcement connections.”

  36. 36 LAREYNA SOTELO Sep 29th, 2009 at 3:10 pm

    Funny his kids went to a prestegious christian school, off of money that he earned. Funny you are so consumed with his life. Funny

  37. 37 Winky Nov 20th, 2009 at 11:50 am

    I’ve known Rey for decades … I also know the feds have always tried to pin something on him for decades; what I don’t know is why. We did a lot of business long before Indian. He was always fair, upfront and willing to stand by his word. I don’t believe any of the allegations and I am proud to call him a friend!

  38. 38 JIMMY. H Dec 15th, 2010 at 5:49 am

    the man took a hole in the wall and built an empire…. He provided jobs for lots and lots of people, most all with family’s and he was good to his people. I did work for him in his shops , he is a good man ,that was true to his word. I was thankful for Ray Sotello , he gave me a chance…

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