Mitsubishi dealer, amid FBI probe, sues former employees

Amid an ongoing FBI investigation into fraud allegations, the owner of a Charleston-area car dealership is suing two of his former employees.

An affidavit filed in federal court claims that Hoover conspired with the two employees, Shawn Rustin and Kentrell Davis, to list nonexistent trade-in vehicles and down payments as part of sales transactions to obtain financing for customers with poor or no credit.

In response, CarFare Charleston, owned by Mark Hoover, has filed a lawsuit against the former general manager and finance manager at Hoover Mitsubishi, accusing the two of committing the crimes now under FBI investigation.

The CarFare Charleston lawsuit, filed in Charleston County Court on Aug. 9, claims Hoover was unaware of the illegal activity, and that Rustin and Davis tricked Hoover into signing all of the falsified loan documents.

In June, the FBI seized electronic files, computers and other information from Hoover Automotive Group. The affidavit is pending in court and no charges have been filed.

Hoover Mitsubishi released a statement in June saying the company was cooperating with the investigation.

"Hoover Mitsubishi learned of some irregularities and inconsistencies in some of our contracts in July 2018," the statement said. "Based on the information available at the time we immediately terminated the responsible employees and have not experienced similar problems since their termination. Hoover Mitsubishi has been cooperating with the investigation and will continue to do so. It would be inappropriate for us to discuss the matter any further since it's an active, ongoing investigation."

CarFare's lawsuit is requesting that Rustin and Davis pay back five years of wages to the dealership and cover legal expenses from the FBI probe, "defense of potential criminal charges," and damages to the business's relationship with banks, as well as its "sales, income and profits." Rustin and Davis could not be reached for comment.

In addition to filling out false information in loan applications to sell vehicles, the lawsuit also alleges Rustin and Davis withheld manufacturer incentive money from the dealership.

Witnesses' statements to the FBI claimed Hoover Mitsubishi sold 50 to 60 vehicles a month after doctoring customers' loan applications to look more appealing to lenders, which pulled in additional profits for the owner and employees. One witness stated around 30 of those sales were made with fraudulent documents.

Dating back to 2015, the store listed manufacturers' rebates as customers' down payments and falsified and inflated income on customers' pay stubs, according to the affidavit.

An unnamed Hoover group employee also stated in the court documents that to juice odds for a loan approval, customers were sometimes advised to list the same residence as their co-signer on applications.

The FBI said the business created two records for each sale, both of which Mark Hoover signed, to hide the fraud activity. The accurate contracts were stored in a filing cabinet and closet at the business office, the affidavit said, while false contracts went to banks and lenders.

Mitsubishi Motors North America did not respond to Automotive News' request for comment.