Convicts at Car Dealers, Part 5
If a car dealer's employee is willing to steal from the company, what makes you think they won't steal from you, too? Well, when we started this 5 part series we had just 5 reports of car dealer employees who were reported to have stolen from their car dealer employer.
Problem is, even more thieving reports popped up. Okay, we'll keep this series to just 5 stories for now and add more later. But this one is a biggie: $1.2 million. And the boss himself is the thief.
"Floor planning" is when GMAC (or some other lender) finances the cars that are sitting on the dealer's lot for sale. The dealer buys the new cars and trucks from the manufacturer, say GM. The factory's financing department (like GMAC) loans the money to the dealer to pay for the shipment of new cars. Paperwork is signed and GM sort of moves the money from the left pocket to the right pocket and ships the new cars and clear titles to the dealer, who promises to pay GMAC a chunk of money each time it sells one of the new cars.
To keep the dealer honest, GMAC often sends out someone to count the cars on the lot and make sure the dealer is not holding back any money for cars that have already been sold. As long as the dealer is honest, or GMAC keeps a close watch on the dealer, everything works out fine. Of course, we are talking about car dealers here. So honesty may be all a matter of interpretation.
But in Illinois things are different it seems.
A former Illinois GM dealer engaged in a multiyear fraud and skimmed $1.2 million according to the Peoria Journal Star newspaper. Todd Black agreed to a plea bargain that will put him in the federal pen for 41 months and leave a $1.2 million court ordered restitution debt hanging over his head for years to come.
Black owned 3 GM dealerships that used GMAC to finance his new car purchases from GM. When GMAC came knocking to count cars they discovered they weren't there because Black had sold them without sending any money to GMAC. They weren't happy.
Additionally, Black also got titles to "ghost" cars that he claimed were in his possession when they really weren't. As a result, GMAC sent him more money. When things got tight, Black would then use the proceeds from recent sales to repay GMAC for older car loans, adapting the "Ponzi" scheme where a person uses money from one sale to pay off another person. Authorities claimed Black used the money to buy houses and a condo.
Black's employees apparently also lied to GMAC auditors trying to cover up the fraud, but GMAC eventually wised up.
So, if employees will steal from the owner of the dealership, what makes you think they won't steal from you too? And if the boss in charge of the place is orchestrating the whole scam, ripping off the factory itself, what makes you think he gives a darn about how bad you get ripped off by his sales staff?
Like everything else, you have to be careful and watch out for the thievin’ on the retail end — that’s your end and it can cost you money!
If you’re the victim of car dealer fraud, call us right now, 1-888-331-6422 Toll Free. We go after car dealers (and manufacturers) every day. It’s what we do.