Sacked: Dealerships Owned By Former NFL Linebackers Face Legal Action

Matthew Guy
by Matthew Guy
sacked dealerships owned by former nfl linebackers face legal action

The financial chicanery of a few automotive dealerships continues apace, with a group of Nissan and Hyundai stores finding themselves in several million dollars’ worth of hot water.

Reps for the captive finance arms of those two brands allege that five dealerships owned by auto retail veteran Michael Saporito and former NFL linebackers Jessie Armstead and Antonio Pierce sold nearly $10.5 million worth of vehicles out of trust. Nearly a hundred machines are allegedly missing, as well.

According to Automotive News, someone suspected something was amiss back in July, when audits carried out by Hyundai Capital America came up with discrepancies between the group’s Hazleton Hyundai and Hazleton Kia locations. Not long after this brouhaha, reps from Nissan Motor Acceptance Corp. turned their sights on related Nissan dealerships in Michigan, allegedly identifying more than 400 vehicles that had been financed but could not be located. Last month, lawsuits filed in two separate states purport that Nissan Finance is owed nearly $10 million for vehicles sold out of trust.

In case you missed it last time, here’s a quick course in dealership terminology. For purposes of this post, “out of trust” refers the sale of a car that has been paid for with a loan, but the sale proceeds have not been used to pay back the lender. This creates an unsecured debt the dealer then owes to the finance company.

On July 30, an employee of Data Scan Technologies, hired by Hyundai’s captive finance arm, performed an audit at the Hyundai and Kia stores, identifying 45 Hyundais and 41 Kias — many of which were titled to Hazleton Honda or Hazleton Nissan, according to a verification filing. This is not kosher, as it is said to violate the loan agreements with Hyundai Capital.

If these other stores then granted their brand’s captive finance arms a security interest in the vehicles, that would compound the problem. Folks don’t like it when a person double dips their tortilla chips, let alone floorplan financing. Repayments to the finance companies are reported to also have been missed. Car carriers appeared at a few of the dealer lots and whisked away inventory.

The Nissan dealers in Michigan wrapped up in this debacle currently appear to be in a bit of the shambles. Automotive News reports one of their reporters was told by a person at the store in Dearborn that the place was open but unable to sell or lease vehicles due to “restructuring.” That’s grim. The industry publication went on to say, “On Thursday, Sept. 6, a service department employee at the Dearborn store said all the technicians had left to take jobs with other Nissan dealerships.” Yikes.

Talking heads are speculating the stores aren’t currently dark, thanks to feverish attempts on the part of Nissan to find new owners. Whatever the outcome, the mass exodus of staff will prove a challenge for whoever decides to try and rebuild the place, not to mention the public relations nightmare now associated with those locations. Nissan recently put on a push to increase its market share in the Detroit Three’s playground, with this dealer group being a large piece of that puzzle after All Pro Nissan opened up locations in Dearborn and Macomb about three years ago.

Your author always feels badly for dealer employees who did not create the problem, yet get caught up with — and have their lives affected by — these types of alleged backroom shenanigans. Here’s hoping they all land on their feet.

[Image: All Pro Nissan of Dearborn]

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  • CKNSLS Sierra SLT CKNSLS Sierra SLT on Sep 10, 2018

    Just traded in my 2012 GMC Sierra on a new 2018 Crew Cab Silverado LTZ. Ultra clean-ultra low miles. Family run dealership. They offered me $21,000.00 for it which was LOW Bluebook. My sources said $26,000.00 was right in the middle of where it should been. After I countered their $21,000 trade in with $26,000.00 it took them a full half-hour to offer me $25,00.00 which I accepted. I really don't know what took so long-for information I looked up on the Internet in 10 minutes. Other than that-it was a pretty straight forward deal. I hate dealerships.

  • Erikstrawn Erikstrawn on Sep 11, 2018

    "Your author always feels badly for dealer employees who did not create the problem, yet get caught up with — and have their lives affected by — these types of alleged backroom shenanigans. Here’s hoping they all land on their feet." You can make a choice where to work. When I got laid off from the dealership, I said "Forget this." and went into a different industry. The pressure to work dishonestly was worse than any place I'd worked before.

  • Jeff S I am not a fan of Tesla and they were niche vehicles but it seems that they have become more common. I doubt if I get an EV that it would be a Tesla. The electrical grid will have to be expanded because people over the long run are not going to accept the excuse of the grid can't handle people charging their EVs.
  • AMcA The '70 Continentals and Town Cars may have been cousins to the standard body Fords and Mercurys, they didn't have to be disguised, because they had unique, unbelievably huge bodies of their own. Looking at the new 1970 interior, I'd say it was also a cost savings in sewing the seat. Button tufted panels like the 1969 interior had require a lot of sewing and tufting work. The 1970 interior is mostly surface sewing on a single sheet of upholstery instead of laboriously assembled smaller pieces. FINALLY: do I remember correctly that the shag carpet shown under these cars was a Photoshop? They didn't really go so peak '70s as to photograph cars on shag carpets, did they?
  • Inside Looking Out Toyota makes mass market cars. Their statement means that EVs are not mass market yet. But then Tesla managed to make mass market car - Mode; 3. Where I live in CA there are more Tesla Model 3s on streets than Corollas.
  • Ltcmgm78 A lot of dirt must turn before there's an EV in every driveway. There must be a national infrastructure plan written by other than politicians chasing votes. There must be reliable batteries that hopefully aren't sourced from strategic rivals. There must be a way to charge a lot of EVs. Toyota is wisely holding their water. There is a danger in urging unplanned and hasty moves away from ICE vehicles. Do we want to listen to unending speeches every election cycle that we are closer than we have ever been to 100% electrification and that voting for certain folks will make it happen faster? Picture every car in your town suddenly becoming all electric and a third of them need a charge or the driver will be late for work. This will take a lot of time and money.
  • Kendahl One thing I've learned is that cars I buy for local errands tend to be taken on 1,000 mile trips, too. We have a 5-speed Focus SE that has gone on longer trips than I ever expected. It has served us well although, if I had it to do over again, I would have bought an ST. At the time of purchase, we didn't plan to move from 1,000 feet elevation to 6,500. The SE is still adequate but the ST's turbo and extra power would have been welcome.