A former Spartanburg car dealer has been indicted on federal charges after prosecutors said his business used deceptive advertising to lure customers and fraudulent information to cheat lenders.
Former Suzuki dealership owner Paul “Joe” Gibson and eight of his former employees face federal charges after prosecutors say they promised low monthly payments to entice customers to buy new cars, but then reneged on those promises. All but one of the defendants worked at either Joe Gibson Automotive in Spartanburg or Joe Gibson’s Auto World in Gaffney.
Along with Gibson, general manager Billy Mills, Jr.; finance manager Lewis Harward, general sales manager Richard Harwell, sales managers Joshua Maldonado and Lennie Sanders, biller Wanda Smith, Jillian Ventrello, and funder Kathy Stewart were all mentioned in the indictment. Also named was Brian Sullivan, a counselor for American Suzuki Motor Corp.
According to the indictment from the U.S. Attorney’s Office, Gibson and the others are accused of advertising small monthly payments between $43 and $99 per month. The promotions claimed that the customer could exchange the car for a new one after a certain time period. However, customers were required to sign a “retail installment sales contract” that included a price much higher than the car’s actual market price. When customers questioned the higher numbers, the indictment states that employees told them “special programs” would allow them to ignore the contract.
But the customers say their payments increased dramatically at the end of the promotional period. They also claim they were not allowed to exchange cars or refinance as promised.
Furthermore, prosecutors state that Joe Gibson employees submitted false, misleading, or incomplete financial information to lenders such as AmeriCredit, M&T Bank, and Wells Fargo. Often, they applied for credit in the names of customers’ relatives without those relatives’ knowledge. The indictment states that the defendants also inflated the sales price to obtain more financing than the customers had agreed to pay.
The indictment further states that Joe Gibson Automotive exaggerated the number of sales it had made each month in its filings with American Suzuki. Prosecutors say employees were trying to qualify for incentives and cash to which they were not entitled— a process known as “dirty punching.”
Prosecutors say the scheme continued until the dealership closed in August 2008 — six months after the local paper Spartanburg Herald-Journal says it began reporting on the business’s practices.
The U.S. Attorney’s Office has not said when the case will appear in court.
Matt Long contributed to this report