Three years after a state report exposed the illegal behaviors of a sector of the used-car business, including the New Jersey Dealers Auto Mall in Bridgeton, they’re still havens for scams and deceitful practices, according to a report published Tuesday.
The State Commission of Investigation published a follow-up to its 2015 report on multidealer locations, or MDLs, and the preferential treatment they received from the state Motor Vehicle Commission, finding the state’s used car industry “remains a refuge for dealers who engage in deceitful, and in some cases, unlawful activity including schemes that harm consumers.”
Several calls to the New Jersey Dealers Auto Mall, as well as emails to employees listed on their website, for comment were not returned.
The report also “revealed that not only has this problem‐plagued business model grown since the SCI’s initial report in 2015, but that dealerships based at these entities continue to participate in illicit conduct, including tax evasion, insurance fraud and an improper black market in dealer credentials.”
There were 19 MDLs in the state as of November 2017, up from 11 when the first study was done, according to the report. At these locations, multiple entities lease space from a single landlord to allow them to have a base of operations in New Jersey — often to avoid stricter regulations in neighboring states, the report concluded.
The 2015 report described the New Jersey Dealers Auto Mall in Bridgeton as “a sham enterprise that enabled rampant dealer abuses ranging from consumer and bank fraud to tax evasion and money laundering.” The 2018 report cited the business again.
“The report is a waste of paper,” said Louis Civello Jr., owner of the New Jersey Dealers Auto Mall, when The Press of Atlantic City interviewed him after the 2015 report was released. At that time, he also denied the report’s allegations of his ties to organized crime.
The new report cites a buyer who purchased a 2005 Nissan Altima for $3,200 from two brothers in White Plains, New York, whose dealership was registered at the auto mall. After the engine blew out on Interstate 95 four days later, the buyer was unable to file a court claim in New York because the dealer was registered in New Jersey, and police in Bridgeton didn’t investigate the matter because the sale had taken place in New York.
In another instance, a New York couple paid $4,500 to purchase a 2005 Volvo XC90 from a New Jersey-licensed dealer doing business in the Bronx, New York, but were issued five temporary tags before getting a title three months after the purchase.
“Prompted by the couple’s complaint, an MVC inspector visited the dealership’s NJDAM rental office in Bridgeton and cited it for numerous violations, including improperly issuing more than one temporary tag for the same vehicle and failing to conduct business from its licensed location,” according to the report. “Following the issuance of a March 2016 MVC violations report, the dealer’s license was suspended for five days and the owner was charged a $200 license restoration fee.”
Too often, dealers at MDLs have been exempt from the same oversight that is standard for other types of dealerships in New Jersey, the report found. It attributed part of this to lobbying efforts on behalf of the dealers by a former head of the predecessor to the current Motor Vehicle Commission.
The report recommended stronger legislation to protect consumers. It noted that New Jersey’s “lemon law” does not cover vehicles sold for less than $3,000 or that are more than seven years old or have been driven more than 100,000 miles. It also doesn’t cover cars sold “as is,” where defects are the buyer’s responsibility.
“Once again, the commission found dozens of instances in which consumers spent thousands of dollars for vehicles that in some instances turned out to be thinly disguised piles of junk,” according to a news release that accompanied the report. “In most cases, consumers were unable to recover costs or obtain refunds because the transactions were ‘as is’ sales that, under New Jersey law, require the customer to cover all repair costs.”
The Associated Press contributed to this report.