DMV Praises Los Angeles DA's Office for Criminal Case Against Former Gunderson Chevrolet EmployeesSACRAMENTO, Calif.--April 8, 2002--John McClellan, Deputy Director of the Licensing Operations Division of the California Department of Motor Vehicles, today praised the Los Angeles County District Attorney's Office for obtaining felony convictions in a consumer fraud criminal case against four former employees of Gunderson Chevrolet in El Monte, California. (Gunderson Chevrolet is operating under new management as Chevrolet of El Monte.)
Three former Gunderson employees entered pleas this morning in Los Angeles County Superior Court, bringing to four the number that have pled to felony charges, based on a grand jury indictment filed in May, 2001. Another Gunderson employee pleaded to a misdemeanor, leaving two others still facing trial in the case. (Note to Editors: Contact the Los Angeles County District Attorney's Office for names and details on today's court action.)
"The DMV and the District Attorney's office have cooperated closely on the Gunderson case in a joint effort to protect car purchasers in this major consumer fraud case," said McClellan. "The Los Angeles County DA deserves high praise for its handling of this matter and for treating it with the seriousness it deserved. The DMV has been deeply concerned about the defrauding of consumers in this case ever since it was first reported to us in May, 2000."
In October 2000, DMV filed an administrative accusation against Gunderson Chevrolet's vehicle dealer's license, charging that the dealership subjected over 1,500 customers to fraud, deceit, and misrepresentation in connection with the sale and lease of new and used vehicles. DMV charged that Gunderson engaged in "price packing" of after-market products, such as theft protection and extended warranties that customers had not agreed to purchase. Customers who might have been more concerned about the monthly payment than the total cost of the vehicle, interest rate, or number of monthly payments were easy targets of "price packing."
In April 2001, DMV and the LA District Attorney's Office obtained a major settlement with the dealership of the civil fraud and administrative licensing actions. "It was the toughest licensing action DMV has ever taken in any consumer fraud case," said McClellan. "We made it clear that, as the licensing agency for new and used car dealers, DMV will not tolerate these types of illegal business practices."
Under the April 2001 settlement, Gunderson Chevrolet paid $900,000 jointly to the DMV and the LA District Attorney's Office, agreed to pay restitution to consumers estimated at more than $1 million, closed its sales department for six consecutive days, had its dealer license placed on probation for four years, repaid the DMV for $200,000 in investigative and legal costs, and agreed to be permanently enjoined from repeating the violations alleged in the complaints.
Meanwhile, DMV had referred the case to the LA District Attorney's Office for civil and possible criminal prosecution. "I'm pleased that the DA was just as adamant as the DMV was that this sort of consumer fraud will not be tolerated in California," said McClellan. "Working together, our two agencies delivered a double-barrel message that was heard all over the state."
The DMV also praised KCBS-TV consumer reporter Joel Grover, who first broke the story in May 2000. The DMV licenses drivers; maintains driving records; registers and issues titles to vehicles and vessels; investigates auto and identity related fraud; licenses vehicle dealers, salespersons, vehicle dismantlers, driving schools, and traffic violator schools. The DMV is a department of the Business, Transportation and Housing Agency, Maria Contreras-Sweet, Secretary. Additional information about the DMV can be found on the department's Web site at: www.dmv.ca.gov