General Motors has terminated the franchises of a Willoughby, Ohio, dealer. Bob Krihwan, president of Bob Krihwan Pontiac-GMC Truck Inc., was convicted of felony income tax evasion in connection with the business.
The action follows unsuccessful efforts by Krihwan to delay the termination until a final appeal of a state dealer board finding that GM had good cause for termination.
In 1996, Krihwan pleaded guilty to the tax charge, based on his use of a 'secret account into which he surreptitiously deposited checks written to the dealership,' according to the Ohio Court of Appeals.
'Krihwan would then convert the funds of this account to his own use without reporting the use of those funds to his partner, the dealership or its accountants, or to the federal government as personal income,' the court said.
GM spokesman Kevin Frazier said, 'GM's decision to terminate the dealer's sales and service agreement is consistent with its policy to terminate the franchises of dealers convicted of felony charges.'
The dealership's lawyer, Robert Kaiser of Cincinnati, said: 'They have terminated operations. They have liquidated all the inventory. They are evaluating their options.'
After learning of the conviction, GM sent a termination notice. Krihwan filed a protest with the state Motor Vehicle Dealers Board, whose hearing examiner concluded that Krihwan had engaged in fraudulent activity for at least three years.
A Franklin County Court of Common Pleas judge refused to delay enforcement of the order, as did the appeals court and state Supreme Court.
The appeals court said, 'The public policy and the law of this state prohibit convicted felons from obtaining automobile dealer licenses.'
The court also noted that Krihwan's sales and service agreement gave GM authority to terminate based on a felony conviction.
Kaiser said his client's appeal on the merits of the board decision is pending, but GM's Frazier said the company is confident that the termination will be upheld.
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