Hard to say without having the model on hand to inspect and test with, but the widespread separation in the second pic makes it appear the vertices are either not fused/connected or are shearing through each other at different amounts (which is definitely screwy). Bad topology always seems to be a headache from TS models (lots of triangulated meshes from 3dsMax as well) - anytime I've bought something there, I've spent a good half to full day just cleaning up geo
If you have the bottom center of the model flat at World Origin and are scaling from that pivot of (0,0,0) with a basic Transform, it should really just shrink down to whatever scale without the crazy distortion.
If you haven't already, I'd suggest trying PolyDoctor and perhaps use the visualization options before the fixing options to try narrowing down the problem.