By Shelley B. Fowler

We normally think of the summer as a quiet time of year, where not much happens workwise between Memorial Day and Labor Day. Well, this summer certainly hasn’t fit that mold, at least when it comes to state attorneys general setting their sights on dealer misdeeds. At least three A Gs sued dealerships and related individuals in the dog days of July and August. Let’s see what happened.

On July 13, Florida Attorney General Ashley Moody announced that her Office of Statewide Prosecution, in coordination with the Florida Highway Patrol, sued Auto Sports of South Florida and seven individuals for their involvement in a complex scheme to fraudulently take possession of vehicles and apply for duplicate titles by using fictitious documents and methods.

According to AG’s press release, the individuals submitted documents, including fraudulent powers of attorney, to the Florida Department of Highway Safety and Motor Vehicles, making it appear as though the financing for the fraudulently obtained vehicles was paid in full. The investigation revealed that the fraudulent documents allowed members of the group to obtain duplicate titles to the cars. Because the duplicate titles appeared legitimate, the individuals, including the owner of Auto Sports, were able to sell the cars to others for a large profit.

The individuals are charged with 51 counts of offenses, including racketeering, grand theft, identity theft, money laundering, and insurance fraud. If convicted, the defendants face up to 30 years in prison for each of the first-degree felonies charged.

A little more than two weeks later, on July 30, Ohio Attorney General Dave Yost announced that his office sued a defunct used car dealership, Rt. 82 Auto Gallery LLC, and its owners for failing to deliver vehicle
titles to customers. The lawsuit accuses the owners of violating Ohio’s Consumer Sales Practices Act and the state’s Certificate of Motor Vehicle Title Act.

The AG’s press release noted that his office received 33 complaints against the dealership in the past two years, most of which alleged a failure to provide titles. The AG’s Consumer Protection Section provided more than $70,000 in payments to impacted customers from the Title Defect Recision Fund, a program that helps used car buyers resolve title problems. The AG’s lawsuit seeks reimbursement from the owners, as well as civil penalties and an order preventing them from holding dealer or salesperson licenses in Ohio.

Most recently, on August 12, Illinois Attorney General Kwame Raoul announced that his office sued Skokie Motor Sales, Inc., operating as Sherman Dodge, for allegedly violating motor vehicle advertising regulations relating to sales events, trade-in values, discount substantiation, and advertised prices.

In 2014, the AG’s office opened an investigation into Sherman Dodge after receiving complaints from consumers who were unable to purchase advertised vehicles. Consumers alleged that, upon visiting Sherman Dodge to buy a vehicle seen in advertisements, sales representatives would say that the advertised vehicle was already sold and would try to sell them a different vehicle instead. However, the consumers alleged that they continued to see the same vehicle in advertisements for weeks later.
Following the investigation, Sherman Dodge entered into an Assurance of Voluntary Compliance with the AG’s office in 2016. Under the AVC, Sherman Dodge agreed to not sell a vehicle for more than the advertised price, advertise a vehicle that it has already sold or leased, guarantee a specific value for a trade-in, advertise a sale without reducing the selling price of vehicles listed in an advertisement by at least 5%, or include limited rebates in an advertised price.

The AG’s lawsuit alleges that Sherman Dodge violated the AVC by continuing to engage in the activities prohibited by the AVC. The AG alleges
that Sherman Dodge further violated the Illinois Consumer Fraud and Deceptive Business Practices Act by deceptively using fake checks and coupons in its advertisements, failing to disclose a consumer’s potential responsibility for negative equity on a trade­in, failing to pay off a lien on a trade-in promptly, and advertising financing opportunities to those facing bankruptcy. In the lawsuit, the AG is seeking to prohibit Sherman Dodge from engaging in acts or practices that violate the law, rescind all contracts entered into between Sherman Dodge and consumers by use of unlawful methods, and require Sherman Dodge to pay full restitution to consumers.

The AG also is seeking a civil penalty of $50,000 per deceptive act or practice, with an additional $50,000 for each act or practice committed with the intent to defraud and an additional $10,000 for each act committed against a person 65 years of age or older.

Given all this action against dealers in the heat of the summer, I can’t imagine what’s going to transpire when the weather cools down and everyone gets back to business. –

*Shelley B. Fowler is a Managing Editor at CounselorLibrary.com, LLC. She can be reached at 410.865.5406 or by email at rfowler@hudco.com.