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Ex-U.S. Honda Executive Gets 5-Year Term in Bribery Case : Autos: Stanley J. Cardiges is sentenced for taking up to $5 million in exchange for favoritism toward dealers. Probe is continuing.

August 26, 1995|JOHN O'DELL | TIMES STAFF WRITER

Former American Honda executive Stanley J. Cardiges was sentenced Friday to five years in federal prison for his role as a kingpin of what prosecutors have called the nation's largest commercial bribery case.

The 49-year-old Laguna Hills man collected as much as $5 million in cash and gifts from Honda dealers eager to get extra shipments of the Japanese car maker's most popular models in the 1980s and early 1990s.

Cardiges, who was Torrance-based American Honda Motor Co.'s senior sales executive until he resigned in 1992, was also fined $364,000 by U.S. District Judge Joseph DiClerico in Concord, N.H. The judge ordered Cardiges taken into custody immediately.

Prior to being sentenced, Cardiges apologized and said he blamed himself for his actions.

"I fell into a pattern at an early point in my career . . . and went along with the crowd," he said. "I didn't have the fortitude when I was 26 years old that 'what is happening is wrong.' That is my fault."

Cardiges, who has lost most of his assets, lived a lifestyle for more than a decade that was well above the level his $125,000 annual salary might have suggested.

Instead, his fancy cars, posh homes, custom suits and world-spanning vacation trips came from Honda dealers eager to gain his favor at a time when Hondas were hot and a word from Cardiges and his subordinates could put extra cars on their lots.

So far, a federal grand jury in New Hampshire has indicted 22 people and uncovered a total of $15 million in bribes. Assistant U.S. Atty. Michael Connolly described the case, without elaborating, as an ongoing probe.

Three others were also sentenced Friday, including a former American Honda executive from Irvine and the former co-owner of a Costa Mesa Honda dealership. Two others were sentenced Monday and 16 more sentencings have been scheduled through Oct. 6.

Cardiges is one of 18 former American Honda sales and marketing executives indicted during 1994--others included two former Honda dealers, an attorney and an Orange County advertising man whose brother was one of Cardiges' deputies. Twenty pleaded guilty and two were convicted in June of various felonies after a four-month jury trial.

Cardiges was also scheduled for trial, but on Feb. 7, the morning jury selection was to have begun, the dapper sales executive surprised his co-defendants by recanting the claims of innocence he'd been making since his indictment 11 months earlier.

He pleaded guilty to conspiracy, racketeering, fraud and witness tampering. In return for a possibly lighter sentence, he agreed to testify against his co-defendants. The tactic apparently worked: Cardiges could have been sentenced to 35 years in prison and fined $1 million.

His co-defendants were his former boss, John W. Billmyer, 66, of Raleigh, N.C., who retired in 1989, and one of Cardiges' deputies, Dennis R. Josleyn, 48, of Loveland, Colo., who resigned as American Honda's western zone sales manager in 1992. The two were convicted in June of conspiracy; Josleyn was also convicted of fraud and racketeering. Both men have said they will appeal after they are sentenced. Billmyer could receive up to five years in prison, Josleyn up to 35 years.

Cardiges and Josleyn had both claimed that American Honda's Japanese management knew of the widespread bribery ring that involved much of the Torrance-based auto importer's U.S. sales division management, but had condoned the bribes to help Honda keep its pay below industry standards in the 1980s.

Honda officials have denied complicity and government prosecutors have agreed, calling the company the chief victim of the scheme. Some of the bribes were paid from money diverted from Honda training programs, and the company is being sued for millions of dollars in damages by dealers who claim they suffered financial setbacks. The suits allege that the dealers were hurt because they didn't pay bribes and didn't get extra cars to sell or receive lucrative franchise agreements to open Honda or Acura stores.

Others sentenced Friday were Robert Rivers, of Palm Desert and formerly of Irvine; Edward A. Temple, former co-owner of Costa Mesa Honda and now a resident of Alpharetta, Ga., and David Pedersen, of Roswell, Ga.

Rivers, former Honda western regional sales manager, pleaded guilty to racketeering and admitted receiving kickbacks from training seminars and bribes from dealers. He was sentenced to two years in federal prison and fined $50,000. He had faced a maximum prison term of 20 years.

Temple was sentenced to 6 months in prison and a $250,000 fine. The former Honda western zone manager was the first to plead guilty in the case and faced up to five years in prison. He pleaded guilty to mail fraud.

Pedersen, a former zone manager for Honda's luxury car division, Acura, pleaded guilty to racketeering and admitted accepting gifts from dealers for favorable treatment and bribes for approving franchises. He was sentenced to two years in prison and fined $98,612.

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Associated Press contributed to this report.

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