Car dealers and manufacturers all-too-often fail to prioritize driver safety over profits. Unfortunately, this can mean consumers end up with a defective car that they cannot drive, or they end up suffering financially in some way due to vehicle problems or issues with the car buying process.
The California Lemon Law is a consumer protection law that can provide some relief to victims who face problems with a new car purchase. Criminal laws can also help to deter bad behavior on the part of dealers and car manufacturers, although unfortunately bad car dealers often are not charged until consumers have suffered financial loss.
Just recently, news reports indicated that multiple auto dealers were charged with crimes for their role in a used car loan scheme. The dealers who participated in the scam made around $1.4 million through their unscrupulous and illegal behavior.
Car Dealers Plead Guilty to Used Car Loan Scam
Three of the dealers who were involved in the scam pled guilty to their involvement, admitting their role in the car loan scheme. In total, there were six people charged in connection with the scam. One of the three who pled guilty was a manager who admitted to first degree money laundering and second degree misconduct by a corporate official.
He was described as the “point man” in the scheme, as he facilitated the “criminal conspiracy” that resulted in banks approving car shoppers for auto loans to buy luxury vehicles, even though their income levels should not have qualified them to buy the cars.
There were two other employees who also pled guilty in connection with their participation in the scam. The charges they faced included second degree money laundering, and both second and third degree misconduct by a corporate official. A separate charge was also brought against the manager for allegedly torching and reporting stolen a $139,000 Bentley from his dealership in order to collect an insurance payout.
The remaining three defendants, including the owner of the luxury dealership, the dealer's bookkeeper, as well as another person who assisted with loan applications, all face pending charges.
The charges for all six parties involved in the loan scam arose in connection with a scheme in which efforts were made to lie to banks to get loans approved. Those involved in the scam took steps like making up false employment records and making up fake pay stubs in order to convince banks to approve bad loans.
This latest scam is just one of many reports of car dealers putting profits over the needs of their customers and, in this case, also jeopardizing the bank as well. The financial institutions faced the possibility of default on loans, and those who got loans approved when they shouldn't have faced the problem of substantial financial loss and damage to their credit. The scam went on for a long time and was profitable to the scammers, with many people facing lasting damage before the scheme was discovered.
It is far too common for consumers to be the ones who suffer when there is a problem. In cases where the issue is new vehicle defects, car buyers must ensure they know the law so they can protect their interests and seek an appropriate legal remedy.