Suit accuses Bob Richards Chevrolet of fraud

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The new owner of Augusta's Chevrolet dealership has accused the previous owner of fraud and racketeering.

In a lawsuit filed against Bob Richards Chevrolet last week in federal court, G.L. Stewart LLC contends the price it paid in April 2007 was grossly inflated because of the way Bob Richards conducted business.

A message left for Mr. Richards or a spokesman was not returned Monday. The Bob Richards company will have 30 days to respond to the lawsuit.

G.L. Stewart paid $6.3 million for the dealership's goodwill and business value alone, according to the lawsuit. G.L. Stewart set the price based on a review of Bob Richards' books, financial records and past sales performance, the lawsuit says.

G.L. Stewart contends its profits from the sale of vehicles was far below what the Bob Richards records indicated. When owner Gordon Stewart questioned employees who worked at both dealerships, he says, he learned that Bob Richards employees routinely falsified customer credit applications.

G.L. Stewart accuses the Bob Richards company of knowing about the practice and encouraging it to increase sales.

G.L. Stewart alleges that the dealership's true value was fraudulently inflated and says it wouldn't have bought the company had Mr. Stewart known of the alleged fraudulent practices.

G.L. Stewart alleges fraud, breach of contract and conspiracy to violate the state's Racketeering Influenced and Corrupt Organizations law. It is seeking to triple damages under the civil RICO law.

Reach Sandy Hodson at (706) 823-3226 or sandy.hodson@augustachronicle.com.

Comments

Asitisinaug

Guess if you own a car business now you look for money any way you can find it.

longtimegone

Does this really surprise anyone? Business as usual in Augusta, GA.

fishpondruthie

I bought a toyota from Ann Taylor and now that Bob Richards has purchased it their service department tries to sell you every thing when you are getting your car serviced. Fraud, there also. I was told that my transmission seal was leaking oil and needed to be replaced. It was an additional 100 something dollars, I didnt have that extra money at the time. It concerned me, I didnt want my car to be damaged by not having the repair work done. When my husband looked at it later he found that the seal was fine there was not even a drop of oil leaking. They were just trying to get a buck. They are no different than a conman, trying to make a buck.

TIREMAN5

there is a saying "if you don't know anything about cars you should know every thing about your mechanic" dealerships are like any other repair shop or even any other business that they are always trying
to upsell you at the counter

Little Lamb

Just because employees falsified customers' credit applications does not mean the profit on a vehicle is low. I'm afraid this G. L. Stewart company is a novice and is having buyers' remorse. A lawsuit is a terrible way to start out a new business. G. L. Stewart should have done a bit more "due diligence" up front.

WW1949

G. L. Stewart has other car dealerships I believe in Fla. He knows what the profit on the car is and can tell by the money in and money out what the dealership is making by the amount that is left over. There must be more to this than credit reports. False credit reports would allow the dealer to sell the car at a higher price if the buyer had no where else to go. I find it hard to believe the credit company wouldn't catch this after a short while. Sounds like sour grapes to me since business has fallen off.

Little Lamb

Okay, let's examine this statement from the article above: "G.L. Stewart contends its profits from the sale of vehicles was far below what the Bob Richards records indicated." Well, well, well. So G.L. Stewart is making less profit than Bob Richards did. Well, tough. I guess G.L. Stewart has a lot more overhead. Maybe they're paying their employees too much. Maybe they siphon off too much for the corporate headquarters in Florida. Maybe they are discounting too much. Maybe they are not taking chances on people with less than stellar credit. They sound like whiners.

Native007

I doubt a man with multiple businesses would begin a lawsuit based on whining.

officerswife

I've been around the car business my whole life...G.L. Stewart is upset because he bought a CHEVEROLET dealership just before the GM meltdown and wants to find a way to get what he's lost...the real business man is Mr. Richards, he saw what was about to happen to GM and got out just in the nick of time...false credit applications?? Whoopy!! It's up to the bank to verify what's on that application before they approve the loan anyway!!

corgimom

The dealership receives money from the banks and finance companies on the loans that they sell, and it's booked as a receivable. If those figures aren't accurate, yes, it would fraudulently inflate the worth of the business by overstating assets and profits.

mable8

So what else is new?

Lumbarsupport

Since the government owns GM, and this involved one of their agents I would propose that everyone sit down with the CEO of GM over a beer and solve this problem man to Man. President Obama will have this problem solved in no time, he is proving to be an excellent leader of the worldwide leader in automotive innovation.

demented dave

As a former used car salesman myself, I can honestly say the whole business is crooked. Car dealers train their salesmen to get absolutely as much money out of the customers as possible. My boss wasn't happy with any sale unless the customer had to borrow gas money to get home from the dealership after we'd picked his pocket. Standard practice was to not give any value for a trade-in until it was determined which car the person was going to buy, then the amount we said we'd give for the trade-in was actually added to the price of the car. So the trade-in was basically a freebie to the dealer who then turned around nailed the next buyer of the trade-in for as much as they could get. My conscience got the best of me, and I left the business. They're all crooked as a three dollar bill.

officerswife

How is it crooked to make a profit dementeddave? If that customer left the dealership happy and content with the deal they just made, then there is nothing wrong with it...You wouldn't question just how much a builder makes on your new home or how much the markup is on your jeans would you?

Just My Opinion

officerswife, are you saying that it's okay for a dealership...or any merchant, really...to jack up their price and obviously deceive a customer? Just because the customer leaves "happy and content" doesn't mean he was not screwed..it just means he was ignorant of the deception placed upon him by experts. And, yes, I would question my builder and I do question prices that I pay at stores. That is why I try to compare prices as much as I can. If you think that it's okay to deceive and lie, what does that say about you? Is it okay for you to have an affair behind your husband's back? I mean, as long as he's happy and content with how you treat him and your family, what's wrong with whatever it is you do when he's not aware?

storiesihaveread

Agrees with Just My Opinion with everything he said. I dont like car salesman they are like leech attach themselves to a victim and not let go. Suck all the blood out of them then leave, The customer is left a lifeless sole

MadSnapper

So the customer is left a dead fish? How thorough should your due diligence be when buying anything from a car dealer, especially a whole bunch of cars?

oldenuff2nobetter

This is out of character for Mr. Bob Richards and the whole Richards family. They are fine upstanding people. I don't understand why Mr. Gordon Stewart would want to make this public. It appears that Mr. Stewart stands to loose more since he is the new kid on the block. This is bad publicity for a struggling dealership. My questions are: Would this be an issue if GM had not faltered? Would this be an issue if the economy were not in a recession? Would this be an issue if Gordon Chevrolet were prospering?

enana031

The only way to avoid being ripped off in any transaction is to be an informed consumer. Make it a standard practice to know the value of your trade-in as well as the price the dealer paid for the new vehicle. Slick car salesmen can only con the person who has not done his or her research.

crazy7209

As a previous new car owner who purchased a LEMON from Bob Richards and took him to court and won its about time he gets what he is due. What goes around comes around!!!

GnipGnop1

A car salesman calling another car saleman a crook? That would be like Charlie Manson calling Jeffery Dahmer evil...too funny.

Asitisinaug

Officerswife, you certainly aen't sticking up for any dealership that isn't truthful and forthright with their customers. Upselling is one thing but lying, cheating, stealing, etc. is deplorable.

JohnQPublic

C'mon folks! All of the local dealerships do the bait and switch game. they advertise some big 'sale" but really only have 1 car available. Also, I know someone who's father works in the finance office for one local dealership told me the guys stand around and laugh at how they rip people off! The buyer of this dealership should have done his or her homework first.

Grasshopper

It's a crooked business, because dealerships take advantage of the ignorant. When I need another car I buy one from an idividual no mark up, and no taxes.

themaninthemirror

Grasshopper- You have truly advanced and are able to grasp the pebbles.(Those of you who do not know what I am talking about, research the old Kung-Fu series starring David Carradine in the late '70s) If one is in the market for an automobile, look around in nieghborhoods for vehicles with for sale signs, and search the internet for bargains. I know someone who is in the Paint and Body business and buys vehicles with cosmetic damage and repairs them and then turns around and sells them for way below what one would pay at dealership prices. There are deals out there, just take your time and do the research. You will be surprised!

Riverman1

There has to be a better way to buy a car. All the lying and game playing. Just put a real price on it and that's it. That's what the government should make them all do, since it has jumped in to the auto business. Heck, do away with dealers. Use the internet and if you want a car, drive to a regional disperal location to pick it up. Cars would be thousands cheaper.

MadSnapper

Sounds like G.L. Stewart paid cash for a clunker

disssman

My god it was only a week or so ago that the complainers were gripping about the poor dealerships. As I said then and I still say, there aren't that many "employees" in a dealership, most of the people you see are considered private contractors or work on commission. Bottom line was the "cash for clunkers" basically helped people like Bob Richards or G.L. Syewart financially. Now, why were all our representatives so hot to do something for dealerships, because they are cash cows for donations.

themaninthemirror

If G.L. Stewart is already in the car business, he should know the general profit on an automobile sale, and should have known from the start if the books looked a little "cooked". I live in a community where the used car lots are virtually across the street from each other, so the business must be somewhat profitable. If the dealership was purchased in 2007, why has it taken so long for this to come to light?

themaninthemirror

demented dave- How could you add the price of a trade in back to the price of the new or used vehicle that was purchased. If I was in negotiations with you to purchase a vehicle from the dealer you worked for, and I agreed to the price of the vehicle, then you gave me a price you would give me for my trade-in, and I agreed to that, then what you are telling me is that price would be added to the price of the vehicle I was purchasing? I would leave your lot so fast you would have to repave it. The only instance where your scenario would come into play is if there was an existing loan on the trade in. If you offered to pay off the exsting loan as trade in value, then added the paid off amount back, that is an acceptable practice in the automobile business. And yes, technically, the dealer is getting a freebee in that case. No wonder you aree a "former used car salesman".

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