F&I and Showroom, October 2019

www fi magazine com 6 F I and Showroom October 2019 DONE DEAL R Regulators dealer attorneys and compliance consultants and your industry news sources all tell the same sad tale Despite the countless warnings and well publicized efforts of federal state and local authorities U S auto dealerships continue to be a reliable source of criminal activity A complaint is lodged against the dealer a manager or a staff member Investigations arrests and prosecutions follow Settlements are reached Fines and restitution are paid Prison time is served Its the same old story You would think all the publicity would discourage those who would engage in bank fraud not to mention the embezzlers and outright thieves Evidently the temptation is just too great If you are tired of reading these stories thats understandable We are tired of reporting them So lets switch gears Dealerships are not only a source of fraud but a frequent victim When fraudsters have invaded their stores F I professionals and other frontline employees have taken action In August a Canadian man purchased a 120000 vehicle at an unnamed St Catharines Ont highline dealership An alert employee suspected something was amiss with the customers documents and contacted the Ontario Provincial Police With assistance from the dealership OPP detectives tracked down and arrested the suspect In the weeks that followed two other agencies joined the investigation and he now faces a litany of charges for allegedly defrauding at least three dealers The police departments issued a provincewide warning asking dealers to remain vigilant A month earlier in Bryan Texas a Houston man was charged with attempting to purchase a vehicle with fraudulent identification and a falsified credit application Busted by dealership staff he made a run for it Police found him hiding in the mens room at a nearby clinic This summer also saw the indictment of Andy Gabler a Pennsylvania dealer and former head of the National Independent Automobile Dealers Association and Chad Bednarski an F I manager for Gablers Lakeside group which includes a Chevrolet franchise and a used car dealership Court documents have since revealed two employees went to Lakesides controller claiming Gabler who had already been caught selling vehicles out of trust prosecutors say owed the groups floorplan financier more than 1 million all concealed by manipulated sales reports One of them also called the bank which called the FBI They built their case on interviews with the controller and the employees And dealership vigilance is not limited to fraud In April James Kip Charles general manager of Kiplin Auto in Charleston N C learned from the morning news that a local woman and her friend had been carjacked the night before When he got to work he got a call from the victim who turned out to be a customer The car was equipped with a GPS tracker Charles and his staff checked the computer found it 92 miles away in South Carolina and called police They arrested the suspect after a brief high speed chase that same morning Later that month a fire outside the service department at Bob Baker Chrysler Jeep Dodge Ram Fiat of Carlsbad Calif destroyed eight vehicles A suspect was quickly identified and arrested thanks in part to an array of high definition security cameras GM Kurt Anderson had only recently upgraded the cameras a fellow dealer promised they would help prevent service fraud by documenting exterior damage when vehicles entered the lanes As our resident compliance expert Gil Van Over points out in this months ACE column Page 30 a number of practices once considered business as usual are now expressly forbidden and frequently prosecuted So dont let anybody convince you powerbooking intentional yo yos and fudged apps are noncrimes They are in fact felonies But neither should you let anyone tell you your association with this great industry casts you as a potential criminal You could just as easily be a hero When Dealers Catch Criminals Noncompliant and outright illegal behavior by dealers managers and staff have generated headlines throughout the year Less heralded are the instances in which dealership personnel took action that led to arrests BY TARIQ KAMAL Upgraded security cameras intended to document exterior damage on vehicles entering the service department helped police quickly apprehend a suspect following a fire at a Carlsbad Calif dealership in April