Two Car Dealers Fined $215,000 in Fraud Cases

Two large car dealerships accused of defrauding more than 100 customers in the San Fernando Valley and Los Angeles’ Eastside have agreed to stop misleading car buyers and pay fines totaling $215,000, the Los Angeles County district attorney announced Thursday.

Toyota of North Hollywood and City Ford in Los Angeles agreed to settle a civil lawsuit that followed a two-year investigation. The Toyota dealership, accused of selling cars for higher prices than publicly advertised to more than 80 victims, will pay $140,000 in penalties and costs. City Ford, accused of selling used cars as though they were new to more than 20 people, will pay $75,000.

The lawsuits are the only two brought against car dealerships this year, but Dist. Atty. Gil Garcetti said he suspects there are “more victims out there” and “other car agencies doing the same thing. . . . This is not going to be the last case we do here in the next 12 months.”

Marc Bonanni, attorney for both dealerships, said the allegations were never proved. “By our settlement there was no admission of liability.”

Owners of City Ford have no comment on the case or what restitution, if any, has been offered customers, Bonanni said. Toyota of North Hollywood, he said, took steps to correct its problems as early as two years ago. The company dismissed a manager and paid nearly $60,000 to affected clients.

The dealership now marks the cars with the advertised prices and makes sales personnel sign weekly forms declaring knowledge of the advertised prices, said Ian Hovey, a sales manager. “We have taken every possible step to remedy the situation,” he said.

But William Kane said he would never go back to Toyota of North Hollywood after learning he paid $1,097 more than advertised for a used Hyundai in 1991. “I won’t even drive by there,” said the 33-year-old medical student, a Hancock Park resident.

When Kane learned he had been “gouged,” he said, “I felt a little stupid.” The dealership refunded the $1,097 to him, “which I used to pay off the car,” Kane said.

The state Department of Motor Vehicles, which conducted the investigation with the district attorney, contacted Kane about a year ago and informed him of the disparity between the advertised price and what he had paid. An informant alerted the DMV to the dealership’s practices, according to an investigator, and the agency began comparing published ads with re-registered cars.

A customer’s complaint led DMV investigators to look at City Ford sales. At least half the victims were Latino immigrants, Garcetti said. Many negotiated for their cars in Spanish then signed contracts in English, he said. This is a violation of state law saying Spanish-language contracts must be provided to those who negotiated in Spanish, he said.

Juan Manuel Jimenez, 30, a mariachi singer who does not speak English, is still confused about how he agreed to buy a 1991 Ford Ranger for $22,000 two years ago, believing it was new. “The contract I signed was in English,” he said. “I trusted them. They were all nice people.”

His wife noticed that the Ranger’s odometer had more than 100 miles on it, and his purchase became part of the investigation. Jimenez said he still has the truck, but that the dealership has not returned any money.