Court Papers Accuse Iacocca of Improper Auto Profits

In documents filed in support of a lawsuit, Chrysler Corp. Chairman Lee Iacocca has been accused of using his position to improperly profit on sales of Lamborghini cars sold through an Orange County dealership.

Jasjit Singh Rarewala alleges that Iacocca and another Chrysler executive, H.F. Carlini, channeled a number of specially built Lamborghini Countachs to a Newport Beach dealership co-owned by Carlini’s nephew, Anthony Carlini.

Rarewala filed a $50-million suit against Chrysler in Los Angeles Superior Court in April, alleging that Chrysler breached a contract to sell him franchise rights by granting an exclusive Orange County dealer franchise to Newport Auto Center. Chrysler bought the Italian car maker in 1987.

Rarewala added the allegations against Iacocca and Carlini in October after discovering that Carlini owned 50% of that dealership, which is partly owned by Steven Bren, son of Irvine Co. Chairman Donald L. Bren.

Iacocca and Carlini have not been named as defendants in the suit. The allegations against them were made in response to a motion by Chrylser to move the trial to Italy.

Rarewala’s attorney successfully argued that the case should remain in Los Angeles because of related litigation.

The new filing contends that “Lee Iacocca . . . is personally involved in Newport Auto Center through at least the attempted sale at an enormous profit of at least $100,000 of a 1989 25th Anniversary Edition Lamborghini Countach.”

Those cars are part of a limited run of about 30 units available for U.S. sale that are said to be commanding more than three times their $156,000 price in the California market.

Chrysler spokesman Tom Kowaleski said he could not comment on the suit because it is pending litigation.

However Ward’s Auto Dealer, a monthly trade publication, on Wednesday quoted White & Case, Chrysler’s legal counsel, as saying in court documents that any suggestion Iacocca would try to profit on a run-up in Countach prices is “slanderous” and “rank hearsay.”

The manager of Newport Auto Center could not be reached for comment.

Times staff writer Michael Flagg contributed to this story.