YOU ARE HERE: LAT HomeCollections

New Fraud Charge Filed on Compton Auto Dealer

February 05, 1989|MICHELE FUETSCH | Times Staff Writer

COMPTON — The state Department of Motor Vehicles has filed new charges against the Brett Mitchell Chevrolet dealership in the Compton Auto Plaza, alleging that the firm defrauded a finance company.

The Mitchell dealership closed in December after the DMV suspended its operating license for alleged sales and tax irregularities. In January, the state canceled the license, claiming that for two years Mitchell did not file corporate information required by the secretary of state.

Mitchell has been trying to regain his license. Last week he filed the corporate information and also paid about $4,400 in late registration fees and fines for new cars he sold, DMV officials confirmed.

Hearing Scheduled

But the DMV is prepared to argue that Mitchell should not be allowed to resume operations because of the new charges. A hearing is scheduled Feb. 14 and 15 in an administrative law court in Los Angeles.

The department is alleging, among other things, that Mitchell received money from a Long Beach finance company for new-car titles, but failed to transfer the titles to the company, Fidelity Financial.

In one case, the DMV alleged, the finance company attempted to repossess a car, only to discover that the dealership already had repossessed the car because the buyer's down-payment check had been returned because of insufficient funds. In another case, according to the DMV, the finance company attempted to repossess a car but found that the sales contract had been canceled.

The DMV also said the Mitchell dealership had violated state law by continuing to sell cars after the dealership's retail sales permit had been revoked by the State Board of Equalization. The state office, which collects sales taxes, revoked the permit in November because the company owed more than $100,000 in state sales taxes for cars it sold, the DMV said.

Had Five-Year Lease

Compton was counting on Mitchell and other automobile dealers in the mall alongside the Artesia Freeway to provide jobs, sales tax revenue and, in Mitchell's case, rent money for the buildings he was using under the terms of a five-year lease with the city.

Instead, according to a city report on the dealership's finances, Mitchell owes the city $115,887 on the $175,000 loan it gave him in 1987 to expand the dealership, and $12,000 in back rent.

As a result of the closure, only three dealerships remain in the auto mall. When the city opened the mall more than a decade ago, officials hoped to have as many as 14 dealerships. But some of the redevelopment land now has been earmarked for other uses, such as a hotel and convention center.

Mitchell could not be reached for comment but his attorney, Mark A. Geiger of Los Angeles, said, "We are vigorously defending all the allegations brought by the department." The attorney said that Mitchell will continue the fight to regain his license.

"Mr. Mitchell would greatly enjoy getting back in the automobile business," said the attorney. He declined to comment on whether Mitchell has the capital to reopen the dealership.

Los Angeles Times Articles