The president of the Chrysler Minority Dealer Association, who filed for bankruptcy protection for his North Carolina Honda dealership last month, faces felony charges alleging, among other things, that the Honda store failed to pay state taxes.
The North Carolina Division of Motor Vehicles charged Reggie Hubbard, president of Hubbard Automotive Group, with embezzling state property.
The state agency says the dealership, Honda of Lake Norman in Huntersville, N.C., failed to pay state taxes on at least 25 vehicles. Hubbard also is charged with two counts of obtaining property by false pretenses for not paying off lien holders when two vehicles were sold.
Reached at his Chrysler-Dodge-Jeep dealership in Charlotte, N.C., Hubbard referred questions to his lawyer, Peter Anderson. In a statement, Anderson said Hubbard "absolutely denies any criminal intent."
The case concerns "business activities that occurred at the dealership, as opposed to Mr. Hubbard's personal conduct," Anderson said. "Extreme financial restrictions placed upon the dealership by Honda Finance" meant Hubbard had "no access or control over the vehicle titles."
The bankruptcy filing estimates that Hubbard Automotive/Lake Norman LLC has assets valued at just over $7.3 million and liabilities of almost $12.5 million. American Honda Finance is listed as the largest creditor, owed almost $9 million.
An adversary proceeding filed against the dealership in the bankruptcy case alleges that the dealership accepted a vehicle as a trade-in in a transaction but did not pay off its lien.
William L. Ellison Jr., the plaintiff in that action, alleges that he gave the dealership a check for $21,674.50 and traded in a 2005 Acura TSX when he purchased a 2005 Acura RL from the dealership in January 2009. As part of the agreement, the Honda dealership was to pay off the outstanding loan on the TSX, the suit says.
Ellison says he made two payments to Branch Banking & Trust Co. after receiving phone calls and messages from the lender saying the account was past due. He also alleges that the dealership promised on two occasions to pay off the loan.
"Upon information and belief as of the date of this complaint, the defendant has still not made payment pursuant to the purchase agreement," the suit states.
Ellison seeks actual and punitive damages in excess of $20,000, plus attorney fees.