In Mark Lin's world of auto exporting, there were two kinds of car dealerships.
One kind "would sell vehicles on the sly" to exporters and work "under a kind of code of don't-ask-don't-tell silence," said a court summary of Lin's testimony in a 2016 California civil trial.
"The other kind were those that were expressly open for export," the court decision said.
Huntington Beach Chrysler-Dodge-Jeep-Ram, according to the court's description of Lin's testimony, "was of the latter type."
The jury in the case, a civil racketeering and fraud lawsuit brought by the dealership, rejected Lin's assessment and ordered him to pay the dealership $1.8 million in damages for inducing it to sell 117 Ram pickups that would be exported to China -- in violation of its franchise agreement -- under the pretense that they were destined for a Nevada fleet operator.
The California Court of Appeal affirmed the verdict in July, dismissing Lin's protests that his role in the chain of transactions was legal.
The verdict could help the dealership recover the losses it sustained from the scheme, including chargebacks of factory rebates, if it can collect on the judgment. Nonetheless, the case -- involving a fictitious shell company, falsified documents and a rogue sales manager -- serves as a cautionary tale for dealerships on the need to monitor their employees and fully run down suspicions about potentially problematic transactions.
"We had a process in place, and we had a bad employee who misled us, so it was a conspiracy," dealership President Pete Shaver told Automotive News. "This was the first time I was exposed to such a bad act by an employee."