Ex-Executive Says Dealers Lavished American Honda Officials With Gifts : Trial: Stanley James Cardiges of Laguna Hills says expensive presents assured a steady supply of hard-to-find autos.

From Times Wire Services

Stanley James Cardiges, once a top American Honda Motor Co. executive, testified Wednesday that dealers were so eager for more cars and franchises that they gave him and his colleagues money, homes, swimming pools and other gifts.

“You name it,” Cardiges, 49, said during a federal trial of two other former Honda executives. “They treated us like kings.”

However, the Laguna Hills resident, who pleaded guilty last month to fraud, racketeering and conspiracy for accepting millions of dollars in kickbacks, said that he had no knowledge that Japanese managers were involved.


Cardiges, who faces 35 years in prison, is the key prosecution witness to testify against his bosses, John Billmyer, a former senior vice president of American Honda, and Dennis Josleyn, former West Coast sales manager. They are among two dozen defendants charged in the nationwide car dealership kickback and bribery scheme. Twenty people have pleaded guilty.

Prosecutors say that from 1979 to 1992, Cardiges and others received more than $15 million in cash and other bribes in exchange for dealerships for hot-selling Honda cars. Cardiges was the company’s top American sales executive from 1988 until he was forced to resign in 1992.

Cardiges testified that he and other executives had the power to make millionaires of Honda and Acura dealers who could charge thousands of dollars over sticker prices for the hot-selling, hard-to-find cars.

“Dealers wanted more automobiles. They wanted more franchises,” he testified. “They wanted to make more money.”

Cardiges said he collected $75,000 to $80,000 from dealers on annual Christmas trips to New York.

Other dealers, Cardiges said, would give him cars he had requested for his relatives and financed $15,000 to $25,000 shopping sprees he and his wife took in Hong Kong.


Cardiges said Charlotte, N.C., dealer Rick Hendricks III helped him buy two homes, and Martin Lustgarten, a Philadelphia-area dealer, gave him a $40,000 Mercedes and gave Cardiges’ stepson a Honda Prelude.

Hendricks has acknowledged giving gifts to Cardiges, but says he did so as a friend, not to buy influence. Lustgarten has since died.

Cardiges has admitted that he sold “letters of intent” to dealers that, in effect, granted them franchises. “No, I did not believe it was OK,” he said. “However, I did it.”

Honda says it knew nothing about the payoffs. Prosecutors call the company the principal victim in the case because it faces millions of dollars in damages in 16 civil lawsuits filed by dealers who did not get preferential treatment. The suits include a federal court class action filed in Sacramento by plaintiffs that include former astronaut Frank Borman.

The trial is being held in Concord, N.H., because it was a lawsuit by a New Hampshire dealer that prompted the criminal investigation a year ago.