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Entries in Car Dealers (3)

Wednesday
Jun202012

Employee Scams Car Dealership Out of $10M, Spends Cash on Luxuries

Adam Gault/Thinkstock(PITTSBURGH) -- Patricia Smith, the former controller of an auto dealership in Pennsylvania, is headed to jail after embezzling $10 million from her former boss in a stunning case of a trusted employee looting the business then squandering the cash on luxuries.

Smith, who worked at Baierl Acura located in Wexford, Pa., an upper-middle class suburb of Pittsburgh, was convicted of systematically stealing for seven years -- some $4,000 a day on average -- for private jet travel, special trips to the theatre, fancy clothes and other goods, according to the court.

Smith spared no expense for herself or her family on the company's dime, according to reports from court.  The jet charters alone totaled $1.8 million for the bookkeeper, who officially made about $50,000 a year from the dealership.

According to Shannon Pierre, of ABC News' Pittsburgh affiliate WTAE, who reported on the story from court, Smith's reason for her crime spree was that she felt like a "horrible daughter, wife, mother and friend" and the gifts were a way to "earn their love" because she wanted to see "what happiness looks like."

An attorney for Smith did not return ABC News' request for comment.  News reports indicated that Smith told her family and friends she got rich investing in airline stock.

Now, the 58-year-old woman must serve 78 months in prison, three years of probation, and pay a restitution of $10,349,569.14 for the fortune she obtained by making more than 800 money transfers from Baierl Acura's coffers to her personal accounts.

"We're glad that justice has been served and this matter is now behind us.  Despite the amount of funds taken over time, there were no adverse impacts to our daily operations.  Our business is doing well and we have adopted stronger measures to prevent such a crime from ever occurring again," Lee Baierl, CEO of Baierl Automotives said in a statement to ABC News.

Smith was able to electronically transfer funds from the company's online account to her own personal account and use the funds to buy four homes, 10 vehicles, Louis Vuitton luggage, jewelry and $30,000 in pre-paid travel funds, among other purchases, court records show.

She will begin serving her sentence in July.

Copyright 2012 ABC News Radio

Thursday
Nov172011

Three Common Car Dealer Tactics Hitting Consumers Hard

Comstock/Thinkstock(NEW YORK) -- A car often can be one of the biggest purchases a person will ever make, and consumer groups say buyers are easily taken advantage of by unscrupulous car dealers.  That's why they are pushing for more regulations, and the Federal Trade Commission is hosting an all-day meeting on the topic on Thursday.

A car dealer's tactics can start the moment a driver pulls up at the dealership, according to Ray Lopez, who was a car salesman for 35 years.

"It's all a matter of the psychological games that we play," he said.

One of the biggest games is "yo-yo financing," which occurs when a dealer is so eager to close the sale that he sends a buyer home with the car before the financing is secured.

"The person's already been driving the car, has already fallen in love with the car," Lopez told ABC News.  "But when the financing falls through, the dealer calls back with bad news: Pay more money or return the car."

"It's outrageous and shouldn't be done," said Jack Fitzgerald, a long-time auto dealer.  He told ABC News that buyers should never leave with a car unless the deal is final.

"Don't take delivery of a car if you don't have a signed contract," said Fitzgerald.

Another one of the car dealer tactics is what critics call a hidden markup.  That's when a dealer jacks up the interest rate on a car loan, without telling the buyer they have raised the rate quoted by the lender.  It's perfectly legal, and dealers argue that markup covers their costs related to security and servicing the loan.

But the Center for Responsible Lending says interest-rate markups cost consumers nearly 26 billion dollars a year in "unneeded, excessive charges."

Consumers are advised to shop around for a loan -- they may be able to get a better deal from a bank or credit union.

Another trick car salesman use is selling expensive add-ons such as line paint sealant or fabric protection.

"All new cars come from the factory with paint sealant and fabric protection," Lopez said.  "So, if you hear that, walk away."

Copyright 2011 ABC News Radio

Monday
Feb072011

Ford to Boost U.S. Production, Cut Luxury Dealers

Photo Courtesy - Getty Images(SAN FRANCISCO) -- Ford Motor Co. has announced it will expand U.S. production by 13 percent this quarter amid increasing demand from car dealers.

The carmaker made the announcement Sunday before a group of more than 500 Ford dealers at the National Automobile Dealers Association convention.

The expansion, which comes on the heels of Ford's largest increase in January retail sales in a decade, could also lead to additional shifts at several plants to keep up with the boost.

At a promising time for some Ford dealers, however, others could see their doors closed as the company looks to cut back on its luxury brands by closing an additional 100 Lincoln dealers.

Copyright 2011 ABC News Radio







ABC News Radio