TUCSON, Ariz. - A once-successful Mexican auto dealer who failed to pay General Motors for 755 vehicles has appealed a $37.5 million judgment against him.
General Motors Acceptance Corp. de Mexico obtained the summary judgment in an Arizona state court on the basis of its complaint that Mario Torres did not pay for 755 vehicles shipped to his five dealerships in the state of Sonora, Mexico. Meanwhile, GMAC's lawyers in Mexico have filed three civil actions to recover money from Torres; they also have filed a civil complaint.
The summary judgment was for 300 million pesos, or about $37.5 million. The appeal probably will be heard later this year.
Torres served several months in jail in lieu of a $3 million bond. In May, a Sonora court reduced his bond to $300,000 and he was freed.
Torres' Tucson home has been attached and sold. His and his wife's bank accounts in Arizona also have been attached. About $240,000 was turned over to the clerk of Superior Court in Tucson to be held until the appeal is resolved.
Only a few years ago, Torres seemed to be at the pinnacle of success. In 1984, he became a General Motors dealer in Hermosillo, an industrial city in northern Mexico. He later became part owner and managing director of four more GM dealerships, in Guaymas, Cananea, Caborca, and Nogales. Then, in late 1992, his growth abruptly halted. According to Michael Mandig, the lead lawyer in a U.S. suit against Torres, GMAC auditors noticed Torres was extended beyond GMAC's credit limits. GMAC financed Torres' entire inventory on a consignment basis.
Auditors visited his Hermosillo dealership and tried to trace the vehicles consigned to it through its books, Mandig said. After a few futile hours, the auditors quit for the day, with plans to return. The next day, the books were gone. And, Mandig said, there was no trace of what had happened to 755 vehicles.
Torres' Tucson lawyer, Richard Burres, contends that not all 755 vehicles were delivered to the Torres dealerships. He said the company that delivered the vehicles may have diverted shipments.
A month after the auditors' visit, in January 1993, lawyers in Mexico and Tucson filed suits against Torres and his dealerships. 'We were able to bring action in the United States,' said Mandig, 'because the principal links were ownership of real estate here and the use of banks to do business in Arizona. There was a possibility that the money that went through Arizona banks should have been paid to GMAC. That violates the state's racketeering laws. One unlawful activity is money laundering, which is processing proceeds of unlawful activity - like not paying GMAC.'
Mandig and his associates attached a $70,000 account at Valley National Bank (now owned by Bank One) and subpoenaed records going back to 1986. They suspected Torres was trying to pay off overdue debts with future sales. But, unable to obtain accurate records of his business transactions, they were never able to learn exactly how his losses had occurred.
Torres has lost all five dealerships. His present residence is Hermosillo.