A notification program has begun, as ordered by the United States District Court for the Central District of California, to alert consumers about a proposed class action settlement in a lawsuit known as In re Wells Fargo Collateral Protection Insurance Litigation, Case No. 8:17-ML-2797-AG-KES, which is currently pending against Wells Fargo Bank, N.A. and National General Insurance Company.

The proposed settlement resolves a lawsuit originally filed on July 30, 2017, which alleges that between Oct.15, 2005 and Sept. 30, 2016, defendants unlawfully placed collateral protection insurance policies on automobile loan accounts. CPI is a type of insurance that Wells Fargo purchased from National General to cover potential damage to vehicles that served as collateral for Wells Fargo auto loans. The lawsuit alleges, among other things, that the CPI policies that defendants placed on settlement class members’ accounts were duplicative, unnecessary, and overpriced.

Under the settlement, defendants will distribute at least $393.5 million to settlement class members pursuant to an agreed-upon “Settlement Allocation Plan” and “Settlement Distribution Plan.”

The settlement class is defined as Wells Fargo Dealer Services Customers who had a CPI policy placed on their account(s) that became effective at any time between Oct. 15, 2005 and Sept. 30, 2016 and Wells Fargo Auto Finance customers who had a CPI Policy placed on their account(s) that became effective at any time between Feb. 2, 2006 and Sept. 1, 2011. Notices will be sent to Settlement Class Members and are scheduled to appear in a national online notice campaign leading up to a hearing on Oct. 28, when the court will consider whether to grant final approval to the settlement.

A former dealership employee who allegedly used an identity stolen from a store customer to purchase a sports car was arrested on a felony warrant.

Randall Cepi worked at a Nissan dealership in Winslow, Ariz., in March 2018. The Arizona Department of Transportation alleges that he used a customer’s personal information to purchase a 2007 Chevrolet Corvette from a dealership in Flagstaff.

The victim had bought a new half-ton pickup from the Nissan dealership. About a week later, Cepi used her personal information to obtain a loan to buy the Corvette.

He arranged to have the victim’s signature forged on the dealership and loan documents.

The victim became aware of the scheme a few weeks later when she received insurance and finance information for the Corvette. She filed a complaint with ADOT’s Office of Inspector General, and detectives with the Dealer Investigation Unit opened an investigation.

The dealership in Flagstaff called Cepi, demanding that he return the Corvette. Instead, he abandoned the car at the Nissan dealership where he worked and disappeared. While searching for Cepi, ADOT detectives brought the case before a grand jury where the felony warrant was issued.

Cepi was found working at a dealership in Gallup, N.M., where he was arrested on July 29. He will be extradited to Arizona to face charges of fraud schemes and forgery, theft of means of transportation and taking the identity of another.

A Florida Chevrolet dealer will pay more than $1 million for failing to pay off liens on trade-ins as the state kicks off a campaign to combat auto fraud.

Florida’s attorney general and the state’s Department of Highway Safety and Motor Vehicles partnered to launch the #SteerClearOfFraudOAG campaign on Aug. 5. The weeklong consumer awareness campaign is designed to warn Florida drivers about various types of automotive fraud.

The campaign’s kick off announcement included details about a settlement with Riverside Chevrolet LLC of Jacksonville and its owner, Andrew Ferguson, to pay consumer restitution of $1,215,219. The money is intended to pay off liens on vehicles traded in to the dealership between August 2017 and August 2018.

The state’s suit accused the dealership of not paying off previous liens on trade-ins, failing to pay state sales taxes and failing to pay employee withholding taxes. 

Riverside Chevrolet LLC also must pay $235,000 in civil penalties to the state, with over $58,000 of the penalties imposed for violations involving seniors, and $15,000 for the Attorney General’s attorney’s fees.

The agreement also includes a permanent injunction barring Andrew Ferguson from owning, operating, or managing an automobile dealership in Florida at any time in the future. 

The father-and-son operators of a New York used-car dealership face charges of concealing millions of dollars of profits on their tax returns.

According to the federal indictment, Mehdi Moslem and Saaed Moslem, the owners of Exclusive Motor Sports in Central Valley, caused their accountant to prepare partnership tax returns that significantly understated the store’s gross receipts and inventory from 2009 to 2016.

The fraudulent business income figures passed through to the Moslems’ personal tax returns filed with the IRS, resulting in a substantial underreporting of the amount of tax due. 

Saaed Moslem then used his fraudulent income tax returns and made other false statements to conceal his assets from creditors when he filed for bankruptcy in 2015.

The Moslems also conspired to defraud multiple financial institutions from 2011 to 2017 by submitting falsely inflated net worth statements and fabricated tax returns in connection with loan applications. This included a $1.2 million mortgage on the Exclusive Motor Sports property, on which they later defaulted. 

The Indiana attorney general filed lawsuits against two unlicensed car dealers who have ignored previous orders to stop operations.

Under state law, all motor vehicle dealers must obtain a dealer license from the Indiana Secretary of State. The law defines a dealer as a person who sells, offers to sell or advertises for sale at least 12 motor vehicles within a 12-month period.

Both defendants in the state’s lawsuits have conducted business primarily in the Indianapolis area.

Scott Keen, who has never held a dealer license with the Secretary of State, allegedly has advertised and sold hundreds of vehicles over the past year. He advertises the vehicles on Facebook and uses the slogan "Cash is Keen."

He also seeks to buy used-vehicle inventory, offering cash for any running vehicle with a title. He then sells vehicles from his home.

Keith Williams previously worked as vice president of sales for Wheels of Fortune, an entity that had no dealer license despite selling hundreds of motor vehicles. Recently, Williams made numerous unlicensed sales of his own under the name EZ Auto Sales.

Williams was named as a defendant in the attorney general’s lawsuit against Wheels for his actions at that business in addition to his separate individual vehicle sales.

On March 6, the attorney general obtained a judgment against Williams prohibiting him from advertising or selling any vehicle that was not his personal vehicle titled in his own name. Since that date, Williams has advertised over 15 vehicles for sale on Facebook.

The vehicles are being stored and sold from the premises of a Brakes & Oil LLC (also named as a defendant in this case), a repair shop owned and operated by Williams.

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