4 Ex-Employees Are Sentenced for Fraud in Car Sales
Four former employees of Gunderson Chevrolet in El Monte, who were charged with planting hidden costs in the sales contracts of more than 1,000 car buyers, were sentenced Monday after pleading no contest to fraud-related charges, authorities said.
The four former employees, along with three others, were indicted last year after a yearlong investigation by the Los Angeles County district attorney’s office and California Department of Motor Vehicles into the dealership, which has since changed management and its name.
Investigators found that employees overcharged customers for products and services and changed the terms of deals without customers’ knowledge, cheating them out of as much as $6,000 each, said Deputy Dist. Atty. Jeffrey McGrath.
In the most frequent scam, he said, customers were charged up to $3,000 for a theft protection system that cost the dealer $37, and the extra fees were buried in the monthly payments. In other cases, customers of Gunderson, the state’s largest Chevrolet dealership, were confused into thinking they had bought a vehicle when they were leasing it, McGrath said. The fraud was committed from early 1999 until May 2000, according to the prosecutor.
The dealership’s general manager, James Michael Hoban, pleaded no contest to conspiring to make untrue or misleading statements in the sale of cars. Hoban, 46, of Irvine, was sentenced to six months in jail, placed on five years’ probation and ordered to pay a fine and perform community service.
Former finance director Michele Davis, 56, of Norco pleaded no contest to the same felony charge and also received six months in jail and five years’ probation. Randolph Samuel Cooper, 37, of Irvine, a former used car manager, pleaded no contest to a misdemeanor charge of making untrue or misleading statements in the sale of a car and was fined and sentenced to three years’ probation.
Donald Poteete, 57, of San Marino, a former finance manager, pleaded no contest to conspiracy to defraud and was sentenced to three years in prison, which was suspended, and six months in jail, McGrath said. Poteete also was fined and ordered to perform community service. He received the most serious sentence because he had the most direct contact with victims, McGrath said.
Hoban, Davis and Poteete were ordered to surrender their auto sales licenses and will be allowed to serve their jail terms through an electronic monitoring program.
In February, former finance manager Patrick Fisher was sentenced to 90 days in jail and three years’ probation in exchange for pleading guilty and cooperating with prosecutors.
The remaining defendants, Ronald Crumer and Hamid Ghanian, are awaiting trial.
The dealership, which is owned by AutoNation of Fort Lauderdale, Fla., is now called Chevrolet of El Monte. Oscar Suris, a spokesman, said the company had cooperated with authorities.
AutoNation has paid about $2.8 million in penalties and restitution to resolve a civil case filed by the district attorney’s office and the DMV, McGrath said.
