The Iowa dealership is accused of multiple malpractices, including fraud and defaulting on repayments
Seventy-six employees have been made redundant from an Iowa dealership. Layoffs come days after both Stellantis and Ford filed multi-million dollar lawsuits. The dealership is accused of floorplan fraud and selling vehicles out of trust.
An Iowa dealership is being accused of double-dipping and fraud as it's being hit with two lawsuits, one from Stellantis Financial and another from Ford Credit. The group, Sky Auto Mall, has allegedly been selling vehicles out of trust and committing floorplan fraud. The company operates franchises for Chevrolet, Ford, and Stellantis' Chrysler, Jeep, Dodge, and Ram brands. In total, 76 employees have been laid off, just days after the suits were filed. The fillings claim that over $1.4 million is owed to Stellantis Financial, while $1.2 million remains outstanding to Ford Credit. Claims Of Double Financing And Concealed Records Stellantis filed its lawsuit on March 2 in the Linn County District Court, where it claimed a total of over $12.3 million in damages. Alex, Igor, and Yelena Tovstanovsky are the co-defendants named in the complaint, reports AutoNews. Also: Feds Warn Nearly 100 Auto Dealer Groups To Cut It Out With Hidden Fees Or Else The filing alleged that the Center Point dealership had defaulted on a November 2023 floorplan deal and on advances on which inventory was purchased. Stellantis claims that the dealership then approached a different lender to finance the same vehicles. The complaint also states that this pattern continued for several months, during which Stellantis kept issuing advances despite signs of the dealership’s worsening financial position. Ford Credit filed its own action on March 5, asserting that more than $6.6 million is owed in connection with the Newhall store. In its petition, the lender said Stellantis alerted it in February to the alleged wrongdoing. Ford Credit then compared lists of floorplanned new and used vehicles and identified 81 that were allegedly financed by both institutions. According to the filing, the dealership admitted to the existence of the double-flooring, and gave records that it had committed the duplicate financing and had made attempts to cover it up. Meanwhile, Stellantis claims that cars were transferred between dealerships without informing the lenders, financing cars twice, and receiving double the amount of advance payments. The complaint further asserts that the group kept two sets of books to give the impression that there was only one lender with floorplan rights. The filing claimed that proceeds of over 1.4 million vehicle sales were held out of trust. The argument put forward by Ford Credit is that the Newhall store had exceeded its credit limit by over $1.2 million.
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