Car Dealer Accused of Embezzling DMV Fees

Times Staff Writer

Last year, the Department of Motor Vehicles began receiving calls from indignant car buyers in the San Fernando Valley who had discovered they did not really own their cars.

Eventually, 24 car buyers told the DMV similar stories. All said they had bought used cars from Renee’s Auto Sales in Lake View Terrace.

The problem seemed simple enough, according to Charlene Arp, a DMV special investigator: Jerry Johnson, the dealership’s general partner, had failed to transfer to the DMV the registration and license fees, along with the necessary paper work on the cars. But, despite months of requests for Johnson to turn over the money and paper work, nothing happened, she said.

On Wednesday, a DMV investigator arrested Johnson on charges usually reserved for public officials caught with their hands in the till. He was charged in San Fernando Municipal Court with six felony counts of embezzling public funds and released on $15,000 bail, Arp said.


Technical Snags

Without the filing of the fees and paper work, the people who bought cars from Johnson technically do not own their cars, Arp said. They cannot obtain license plates, sell their cars or, in some instances, even buy car insurance, she said.

One of Johnson’s customers said that, when his $7,000 Cadillac was stolen, his insurance company would not reimburse him because he could not prove ownership.

Johnson is not the only car dealer the DMV suspects of pocketing registration and license fees money earmarked for the state, according to Vito Scattaglia, the DMV’s supervising investigator in the Valley. Scattaglia said his office is investigating several similar cases and expects charges to be filed against two or three other dealers.


Other Proceedings

The DMV also has initiated administrative proceedings against Johnson, calling for a hearing to determine whether he should be allowed to continue operating as a used car dealer. No hearing date has been set.

According to the DMV, Johnson is not supposed to be selling cars. Because of his problems with customers and the DMV, an insurance company on April 18 canceled the $5,000 bond he needs to operate legally, Arp said.

But, when DMV investigators arrested Johnson Wednesday, they found him on his car lot, which he moved to Sepulveda in February, Arp said. On Thursday, the car dealership, which is apparently named after his wife, Renee, was still open for business.

Second Arrest Threatened

DMV investigators said they will arrest Johnson again if they discover him buying or selling cars.

Johnson, who sells a variety of older cars ranging from Cadillacs to Toyotas, could not be reached for comment.

Unlike Johnson, his customers were eager to talk, expressing anger and frustration at their predicament.


James Townsend, a brewer at the Anheuser-Busch plant in Van Nuys, and his wife, Gloria, bought a 1981 Cadillac from Johnson early last year, but it was stolen in January. Townsend said he had obtained insurance through his company credit union, but that the insurance company would not reimburse the couple until they produce a registration slip.

“You spend your money and then you can’t get help from anybody,” Gloria Townsend complained. “You pay for something you don’t even own!”

Fear of Driving

Every time Dixie Bradley of Tujunga drives her 1973 Chrysler New Yorker, which has no plate, she is afraid the police will stop her.

“I’m expecting it every time I go out,” Bradley said. “I would be hard put proving the car is mine. I could end up in jail.”

Bradley bought the car from Johnson, whom she described as a “nondescript little guy who seems as nice as he can be,” on an impulse. She was driving by the dealership, she said, when her car began acting up. She drove onto the lot and saw the New Yorker, priced at $450, which looked great except for a little rust. So far, she has spent $750 getting the car fixed, she said.

Surprise Over Move

Army Sgt. Deborah Henderson has kept the 1969 Toyota she bought from Johnson in August for $964 parked in the driveway. Each time Henderson complained to Johnson, she recalled, “He assured me everything was all right.” Then one day she visited the site of the Lake View Terrace dealership only to find it had moved and left no forwarding address, she said.


DMV investigators say they do not know how many other people may have had problems with the dealer. “There are 24 victims out there that I know about; there are probably more,” Arp said.

The 24 customers will have to repay the fees and many may owe more money, Arp said, because DMV investigators believe Johnson did not collect enough money to pay the state fees.

Arp said investigators have not calculated the total amount Johnson owes the state.

Meanwhile, Johnson’s customers still do not know when they will have clear titles to their cars. If Johnson is convicted, Arp said, the DMV will ask the judge to require him to submit the fees and paper work for his customers as a condition of his sentence.

But Arp predicted, “It could take a while.”