It sounded too good to be true . . . and prosecutors say it wasn't. Now a former Suzuki dealer in South Carolina who ran TV spots promising customers they could have a new car for tiny payments, trade in the car after a set term "and obtain a new car at no cost" has been indicted by a federal grand jury.
Eight dealership employees and a former American Suzuki district manager also were named in the indictment.
Defendants are charged with three counts of conspiracy to commit wire fraud for false advertising, forging loan documents and falsifying sales reports from 2006-08. The dealer, Paul Gibson, owned two Joe Gibson's Suzuki dealerships in Spartanburg and Gaffney, S.C. Gibson filed for bankruptcy and closed the dealerships in 2008 after a flurry of lawsuits from customers and lenders.
Ads promised customers could drive a new Suzuki "for life" for payments of $99 per month or less, according to the indictment.
The scheme allegedly worked this way: The dealer would arrange a loan much larger than the vehicle's worth by inflating the sale price. The dealer then issued checks to customers to cover the difference between the low payments being promoted and the actual loan installments.
Customers were told that a special program from Suzuki paid for it all. When the money ran out after a few months, they were told to return to the dealership, trade in the vehicle and buy a new Suzuki using the same promotion.
When customers asked about the monthly payments on their sales contracts -- significantly higher than the rate they had been promised -- the defendants told the customers to "totally disregard any of the numbers on the contracts because they would never be obligated to pay anything more than the agreed, low monthly promotional amounts," the indictment said.
