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Mitsubishi Dealer to Face DMV Hearing on Fraud Complaint

February 19, 1989|CRAIG QUINTANA | Times Staff Writer

The state Department of Motor Vehicles is seeking to revoke or suspend the sales license of a West Covina auto dealership because of an alleged pattern of consumer fraud.

A hearing will begin in Los Angeles on Tuesday on the allegations against West Covina Mitsubishi, which is owned by Ziad Alhassen. Alhassen's attorney has denied any wrongdoing.

Other Developments in City

Alhassen, one of the city's most successful businessmen and developers, built the 13-story Eastland Tower, West Covina Village shopping center and other smaller developments in the city.

In DMV papers, which list 40 complaints, the dealership is accused of assessing illegal charges and fees to customers, of using misleading and false advertising, of preparing fraudulent credit applications, inducing customers to make purchases based on false information, and late payment of required state fees.

"We occasionally have dealers who are charged with this much, but (the scope of this case) is more than we have in most incidents," said DMV spokesman William Gengler. "This is a serious case that we are pursuing and we do intend to take some action, whether that be suspension or revocation."

Alhassen did not return telephone calls from The Times but his attorney, Steven P. Rice, denied the accusations. He asserted they are the result of a 1984 dispute between Alhassen and the DMV.

Alhassen went to court to force the DMV to allow his dealership to sell 37 foreign cars which state officials contended did not meet state air quality standards. Under a settlement with the DMV and the State Air Resources Board, Alhassen was allowed to sell the cars which were refitted to comply with emission standards.

"This is no Grand Chevrolet," Rice said, referring to the Glendora car dealership formerly run by Eminiano (Jun) Reodica. That dealership went bankrupt last year amid DMV allegations of massive fraud and deceit, but has since reopened under a federal trustee. "This is a case of the DMV being very vindictive over what happened a couple of years ago," Rice said.

Ranked in Top 5

The dealership was Mitsubishi's top retail dealer in the country in 1987, with sales of 4,304 cars, and it has often ranked in the top five, according to Mitsubishi Motor Sales of America. The dealership, which opened in 1983, nets the city between $300,000 and $400,000 a year in taxes.

"They didn't get to be No. 1 by ripping off their customers," said Rice, who said there has been a "parade of DMV investigators" through the dealership's offices following the 1984 battle with the DMV.

"They've come up with a pretty paltry list of accusations after three year's work," he said.

The DMV began its investigation in the fall of 1987. The complaint was issued in December. A state administrative law judge will conduct the hearing, which is expected to take several days. If the hearing officer suspends or revokes the sales license, Alhassen can appeal to the state New Motor Vehicle Board, the only appellate body with jurisdiction over the DMV. Among other duties, it regulates car dealerships.

Etching Fee

Most of the DMV accusations stem from events in 1987 and early 1988, Gengler said. He said the agency may consider referring the findings from its investigation to the major fraud unit of the county district attorney's office for possible prosecution.

One of the main allegations involves charging a fee of $190 to $390 to etch an automobile's identification number on the windshield. The DMV alleges that the dealership falsely told customers that such a procedure was required by state law. It also contends that the cost of the etching was often added to the contract without the buyer's knowledge. In the DMV's complaint, the charge was listed on the contract as a "vehicle identification registration" fee.

Gengler said the DMV did not determine how many customers were allegedly misled in such a manner, but said "it was more than a few." He added that the vehicle identification number is stamped on each car by the manufacturer and there is no legal requirement to have the same number etched on the windshield.

Rice said the dealership never applied identification numbers to a car or charged for the procedure without notifying the customer. He said the dealership no longer offers such a service because not enough customers wanted it, so it was not profitable.

The dealership is also accused of omitting required information regarding car specifications in newspaper advertisements.

During two months in 1987 and two months in 1988, the dealership advertised vehicles without listing the make, model, type, manufacturer's identification number and a number assigned by the DMV as required by the state Vehicle Code, the complaint alleged. The omissions continued after a DMV investigator informed the dealership in December, 1987, that the ads must contain such information, according to the DMV complaint.

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