Tag Archive | "compliance"

N.Y. Dealer Pleads Guilty to Felony Tax Charges

CORTLAND, N.Y. —The owner of JF Auto World, Joseph Fezza, pled guilty last week to five felony charges stemming from his collection and retention of sales taxes on vehicles he sold over a period of more than five years, and his failure to file sales tax and personal income tax returns.

“With Tax Day around the corner, today’s conviction shows that my office has no tolerance for business owners who cheat on their taxes,” New York Attorney General Eric T. Schneiderman said in a release about Fezza’s conviction. “When an unscrupulous few fail to pay their taxes, other hardworking New Yorkers have to shoulder the burden. If you rip off honest taxpayers, you will face time in prison.”

Fezza, 47, of Cortland, pleaded guilty to the five-count indictment lodged against him in Cortland County Court before the Honorable Julie A. Campbell, including one count of grand larceny in the second degree (a class C felony), two counts of criminal tax fraud in the third degree (a class D felony), and two counts of repeated failure to file personal income tax returns (a class E felony).

In exchange for his plea, Justice Campbell promised Fezza a sentence of up to one year in jail. Fezza is required to pay $50,000 in restitution on or before the date of his sentence. The balance of the restitution will either be agreed upon by the parties by June 15, 2015, or the court will hold a restitution hearing on the matter.

Fezza’s sentencing is scheduled before Justice Campbell on October 1, 2015.

According to the indictment and statements made by prosecutors, Fezza, in his position as the owner and sole proprietor of JF Auto World, also known as Auto World, collected more than $175,000 in sales taxes from consumers between March 1, 2004 through September 20, 2009, but failed to remit those taxes to New York State. Fezza also failed to file quarterly sales tax returns, as well as several years’ worth of personal income tax returns during this period.

The case stems from an investigation initiated in 2011 by the New York State Department of Taxation and Finance and the Attorney General’s Criminal Enforcement and Financial Crimes Bureau.

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Midwest Compliance Summit Set for April

CHICAGO — Organizers of Compliance Summit, a series of regional events dedicated to front-end compliance, have announced that the next event will be held April 20–21, 2015, at the DoubleTree Chicago O’Hare in Rosemont, Ill. The Midwest event will follow a successful inaugural event held in the Miami area this past November.

“We are delighted to have the opportunity to bring Compliance Summit to the Midwest,” said David Gesualdo, show chair. “If the outcome of the Florida event is any indication, attendees will leave with an invaluable education in region-specific regulatory challenges and solutions.”

The Midwest conference will begin with a Welcome Reception on the evening of Monday, April 20, and continue with a full day of educational sessions and panel discussions on April 21. The events are open to automotive industry professionals who are involved in front-end compliance, including dealer principals, general managers, compliance officers, sales and F&I professionals and general agents.

Speakers at the Florida event included the head of the state dealer association, attorneys and dealership compliance officers. The agenda covered challenges specific to Florida and the Southeast region as well as a comprehensive review of current threats toward dealers and finance companies by the Federal Trade Commission and Consumer Financial Protection Bureau.

Further details, including the full agenda and information about registration and accommodations, will be available in the coming weeks. For sponsorship and exhibition opportunities, contact Eric Gesualdo via email hidden; JavaScript is required or call 727-612-8826.

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Dealer, Employee Charged With Threatening Customer

WESTPORT, Mass. — The owner of F&R Auto Sales and an employee of the dealership have been charged with threats to do bodily harm and intimidation of a witness after a customer contacted police claiming they had threatened her. Police said in the past year they have received 26 complaints against the dealership, which first made headlines in January when a video of its employees harassing a pizza delivery man went viral, WCVB 5 reports.

The woman contacted police after a car she purchased from F&R Auto Sales did not pass a safety inspection. She alleged that, over the phone, two employees used profanities, threatened to punch her in the face and made a sexual comment. Owner Francis R. Correiro and an employee named Mark Dambrosca have been charged.

To read more, click here.

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GSFSGroup Hires New Compliance Director

HOUSTON – With an extensive career in diverse areas of the automotive industry, Lewis Kuhl brings a high level of expertise as the Senior Counsel and Director of Regulatory Compliance for GSFSGroup. He has responsibility for ensuring that the F&I products and each company are in compliance with the laws and regulations of each state in which they do business.

“It is a privilege to have Lewis join our team. His knowledge base and deep, legal understanding of the automotive industry and especially the F&I segment, is a great asset in the changing landscape of compliance,” said Diane Greene, Vice President, Legal Affairs, GSFSGroup. “At a time of rapid growth and expansion for GSFSGroup, Lewis’ expertise will be invaluable in maintaining the solid, credible reputation GSFSGroup and its product line have earned.”

Kuhl also serves as an Adjunct Faculty member at Northwood University in the Automotive Marketing and Management department where he teaches dealership legal issues. As a leading legal expert on automotive dealer issues, he is frequently invited to speak to dealer and industry related groups. A graduate of Northern Kentucky University, Salmon P. Chase College of Law, he is a member of the American Bar Association as well as the Kentucky Bar Association, Florida Bar and the National Association of Dealer Counsel.

His career history includes both law firms and automotive companies. While working in private practice at both Kurkin Brandes, LLP and Pathman Lewis, LLP, Kuhl focused his practice on motor vehicle dealer and automotive industry law. He also acted as legal counsel for JM Family Enterprises, Inc., a privately held automotive company, where he worked in the legal departments of World Omni Financial Corp., Southeast Toyota Distributors, LLC and JM&A Group. In addition, he served in both legal and operational positions for a group of companies comprised of motor vehicle rental operations, motor vehicle dealerships and an automotive finance company.

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Ala. AG Shuts Down Dealer for Fraud

MONTGOMERY, Ala. — A county circuit judge has granted Alabama Attorney General Luther Strange a temporary restraining order against of Quality Used Cars and its associate Preowned Automotive, as well as permission to seize the dealer’s property.

The dealerships have been owned and operated by Clayton and Connie Reeves since 2009. The Attorney General’s lawsuit against the couple also extends to their daughter Monecia Brown and her husband Christopher Robinson. A preliminary injunction hearing is set for March 5.

According to the lawsuit, Quality Used Cars “has a consistent practice of entering into deals and failing to fulfill its end of the bargain. Quality has accepted vehicle trade-ins under the condition of paying off existing liens but then failed to do so. And it has then sold these very vehicles to other customers without disclosing the liens attached to them, while charging but not remitting State sales taxes. Quality has acquired other vehicles via false pretenses and bad checks, which has led to credit unions, banks, and other car dealers losing tens of thousands.

“Finally, Quality has failed to obtain, let lapse, or had revoked such quality standards as a surety bond, a State business license, and from the Department of Revenue, its Dealer License and Designated Agent status. Thus, any deal Quality makes is corroded from the start.”

In a civil complaint also filed with the Court, Attorney General Strange accused the car dealer of 18 counts of violating the Alabama Deceptive Trade Practices Act as well as a 19th count of a Department of Revenue violation. He gives examples of three particular fraudulent transactions:

  • A woman traded in her Ford Ranger vehicle to purchase a car from Quality with the agreement that Quality would pay off her $3,900 lien on the Ford Ranger. This is a standard practice for car dealers who accept a trade-in that has a lien. She began to get notices that her loan had not been paid, and over the next 22 months the car dealer only sporadically made payments in which the checks bounced, were late, or did not cover the payment amount. Not only did this damage the woman’s credit history, but the credit union filed a lawsuit against her. It was only after she reported the matter to the Elmore County Sheriff’s Office, and the Reeves were threatened with arrest, that Quality finally paid off the loan nearly two years later. In addition to the harm caused to the consumer, Quality caused the credit union substantial administrative and legal costs to collect what was owed.
  • Another woman paid $4,700 for the same Ford Ranger. Knowing there was the unpaid lien on the vehicle, Quality falsely represented that it had the title and that there was no lien.
  • During her purchase of a vehicle from an Alabaster car dealer, Connie Reeves was asked for her regulatory license and her Alabama Sales Tax License. She claimed that she had left them in Elmore County, wrote a check for $16,200, and left with the car and its title. This check, and a subsequent second check, bounced. At this time, they have not yet paid for the vehicle.

In addition to the alleged violations of the Deceptive Trade Practices Act, Quality has paid no sales tax since 2012. The Attorney General’s complaint states that for “over 70 months Quality has sold multiple vehicles at retail and collected and underpaid at least $53,072.88 in sales tax, which it itemized on issued bills of sale. This sales tax, which consumers paid in addition to the price of their chosen vehicle, never made it to the (Revenue) Department.” Additional interest and penalties in the amount of $30,923 also is owed. It is noted that these figures are estimates based upon only those transactions which are known. The Revenue Department sent numerous notifications to Quality.

“Quality has continued to sell vehicles and do business despite lacking nearly every required license or prerequisite for doing so,” the complaint alleges. Its Alabama Dealer License was revoked around August of 2014 and its status as “designated agent” was revoked in February of 2014. It has paid other authorized agents to use their credentials to reach the restricted access program used to process title applications.

“In sum, Quality’s entire operation is unlawful,” the complaint concluded.

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Penn. Dealer Pocketed Customer Fees, Police Say

WILKINSBURG, Penn. — The owner and operator of Penn Avenue Auto Sales Inc. has been accused of taking money from at least 40 customers and not submitting title and registration paperwork and fees to Pennsylvania Department of Transportation, the Pittsburgh Post-Gazette reports.

Charges are pending against Phillip Vixman while police search for other customers who may have been swindled. After 30 days, the customers would be left with expired rear window temporary plates and temporary paperwork.

To read the full story, click here.

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