Selling damaged vehicles. Breaking rules. Calling cops on customers who complain.
A Tucson car lot managed by ex-convicts did all those things and now is under state investigation for unlawful business practices. Regulators are probing reports that the dealership sold a wrecked vehicle that was legally unfit to drive, and that staffers repeatedly put inaccurate vehicle information on state records, violating Arizona law.
Wildcat Mitsubishi, 5200 E. Speedway, has been under state scrutiny since the Army banned local soldiers from buying cars there and at Wildcat's sister dealership, Ideal Automotive Group, 645 S. Highway 92 in Sierra Vista. The May ban followed complaints soldiers were threatened, cheated or misled.
Both dealerships also are under investigation for operating without state-required financing licenses for two years, as long as Wildcat has been open. The licenses help protect customers who disclose sensitive financial data in loan applications.
Already, the problems have led to a lawsuit, government complaints and police calls as dealership employees and customers report each other to authorities.
"A culture of contempt for their customers," is how Tom Collier, president of the Southern Arizona Better Business Bureau, described the attitude of the dealerships' owners.
Tucson lawyer Timothy Remick, who represents owners Richard and Pat Johnston of Hereford, said his clients value their customers and are working hard to fix any shortcomings.
He acknowledged Wildcat has ex-convicts on staff, which is legal in Arizona but not in many other states. He also agreed the dealerships don't have proper licensing, and that Wildcat submitted inaccurate vehicle data to the state and sold a vehicle that wasn't legal to sell.
Each time those things occurred, he said, it was due to oversights, mistakes or ignorance of the law.
Ideal Automotive Group of Sierra Vista has no connection to a Tucson business with a similar name, I-Deal Auto Sales, 2307 N. Stone Ave.
Wrong VINs
In five cases in 2007, detailed in documents obtained by the Arizona Daily Star, Wildcat employees entered inaccurate vehicle identification numbers on applications for temporary registration permits.
In one case, the wrong VIN caused the state to issue a permit for an unroadworthy vehicle, allowing it to be driven off the lot by a customer without raising a red flag in the state's computerized tracking setup.
"There is no way we would have issued a temporary registration permit for that vehicle if the real VIN had been entered into our system," said Cydney DeModica, a spokeswoman for the Arizona Department of Transportation's Motor Vehicle Division, which licenses auto sellers and is probing the incidents.
Michael Wilson of San Manuel bought the damaged truck from Wildcat and is still driving it, even though it's "falling apart," said Art Weiss, his attorney.
Wildcat acquired the 2005 Chevy Silverado at a local auto auction. Its frame was so bent that a previous insurer had declared it a writeoff, making it a salvage vehicle under state law.
"Salvage vehicles are often purchased by automotive professionals for the parts or for restoring the vehicle to driveable condition," said Remick, the dealership's lawyer.
No way, said Bailey Wood of the National Automobile Dealers Association, a Virginia-based trade group that represents about 20,000 new-vehicle dealerships nationwide.
"Dealers do not want salvage vehicles on their lots, period," he said. In fact, the trade group is pushing for a national database of salvage vehicles, so dealers and consumers don't unknowingly end up with them.
In Arizona, it is illegal to re-sell salvage vehicles on a car lot. They can be sold only after their titles are restored — after extensive repairs, state safety inspections and ample consumer warnings. A state inspection on Wilson's truck wasn't done until two months after the sale.
Remick said Wildcat didn't realize that state law bans the retail sale of salvage vehicles.
"Wildcat now knows they were wrong," he said in an e-mail to the Star.
He said Wilson was told the truck was salvage before he bought it — which Wilson denies. Either way, the sale was illegal, DeModica said.
Remick said Wilson was offered a full refund. That offer materialized only after Wilson hired a lawyer, Weiss said. Wilson is suing because he also wants Wildcat to pay his legal costs.
The case is expected to go to arbitration in August.
State aid
Some customers have gone to government agencies for help.
Tiffany Luckey of Tucson turned to Arizona's attorney general when Wildcat wouldn't give back her deposit after selling her a previously wrecked Mitsubishi Lancer, she said.
In January, the 22-year-old college student put down $843 on the car and was allowed to take it home pending financing. But it had problems, she said: The "check engine" light was always on, the car pulled to the right and the horn didn't work.
A few weeks later, Luckey said, the dealership called to say her car had a salvage title. Remick, the dealership lawyer, told the Star the car actually was a restored salvage vehicle that had passed state inspection.
Wildcat said she could return the car, so she did and asked for her deposit money. The salesman said the owner wasn't there to sign a check and told her to come back.
So she went back, repeatedly. The owner was never there.
"There was a time when I waited three hours," she said.
Luckey told the dealership she was going to the Better Business Bureau. Afterward, she said, employees hung up whenever she called.
She also complained to the attorney general. A few weeks later, a state official called to say she was getting her refund.
Remick said Wildcat intended to return the money all along. Luckey "would have been given that refund whether or not she had filed a complaint with the Attorney General's Office."
Since 2003, another state agency has intervened seven times to help Ideal customers who were left with vehicles they couldn't legally drive because the Sierra Vista dealership failed to provide license plates, registrations and titles on time, state officials say.
The customers turned to the MVD for help when their temporary registrations expired and weeks passed without any action by Ideal, said DeModica, the agency spokeswoman. Officials there contacted the dealership on behalf of customers to settle the issues, she said.
Remick couldn't be reached late Friday for comment on the timeliness problems.
Run-ins with regulators
ADOT's inspector general censured Wildcat in May 2007 for misusing temporary registration plates and for selling a vehicle without a proper title.
The agency issued a cease-and-desist order, telling the dealership to stop the practices or face further state action, including fines.
Similar state orders were issued against Ideal in 2005 for failing to forward a registration application to the state, and in 2006 for misuse of a dealer plate.
Remick said his clients weren't aware of those enforcement actions. He was aware of a court case involving alleged misuse of a dealer plate but said it was dismissed.
Both dealerships have run afoul of the Arizona Department of Financial Institutions. A state registry shows neither has a required license to finance vehicles.
Remick said that's because the Johnstons — who have been in the car-sales business for more than 15 years — forgot for the last two years to renew Ideal's license. Wildcat never had the license because the Johnstons didn't realize they needed a separate one for the Tucson site, he said. They intend to correct the oversights, he said.
Remick said his clients "were never notified that the payment was due or that the license had expired." The state says dealerships routinely are mailed three notices: one before expiration, one just afterward, and the last when a license is canceled for nonpayment.
Financing vehicles without a license can carry steep penalties: up to $5,000 a day for each violation.
An official at Mitsubishi's corporate office said he was unaware of such problems at the local dealerships.
The company doesn't make franchisees agree to formal standards or ethics, but they're expected to conduct business "legally and appropriately," said Dan Irvin, a spokesman for Mitsubishi Motors North America.
Ex-cons
Many dealerships weed out job applicants with criminal pasts, and many states require it. Remick said his clients don't do background checks because they believe in second chances for criminals who have served their time.
"Wildcat is truly an equal opportunity employer," he said.
Thus it came to pass that Wildcat's payroll last year included staffers with convictions including attempted aggravated assault with a weapon, threats and intimidation, weapons misconduct, possession of drug paraphernalia, and false reporting to law enforcement.
Despite the commitment to second chances, one Wildcat staffer with six criminal convictions was fired several months ago, after more than a year on the job.
Heath Johnston, 36, Wildcat's general manager and the son of its owners, was convicted in 2004 of attempted aggravated assault with a deadly weapon or dangerous instrument, for grazing a Fort Huachuca soldier with his truck after wrongly identifying the soldier as a participant in a bar fight Johnston had just left in Sierra Vista.
The soldier, who was not in uniform, jumped from the truck's path, but Johnston continued, hitting the victim's car and dragging it 50 feet before he left without checking on the soldier's welfare.
The soldier was too afraid of Johnston to go to court for the sentencing hearing in the felony case, he wrote to the judge.
"He almost killed me. I fear he will come back against me in the future," the letter said. "I am a U.S. Army soldier and I know dangerous situations."
Heath Johnston was sentenced to four years' probation and the two days in jail he'd already served and was ordered to pay the soldier's medical bills and other costs.
"He has fulfilled his obligation to society and has moved on with his life," Remick said.
Heath Johnston's 34-year-old brother, Beau Johnston — general manager of the family's Sierra Vista dealership — is awaiting trial on a felony charge of knowingly possessing stolen property valued at more than $25,000.
Police found a pilfered piece of heavy construction equipment — a 2004 John Deere tractor/excavator — in his backyard last year. Remick said his client is confident he will be exonerated. Beau Johnston told police he didn't know the machine was stolen.
In many states, people with criminal histories are banned from owning or working in auto dealerships. California, for instance, requires owners and staffers to be licensed, a vetting that disqualifies ex-cons.
Arizona requires background checks only for owners. Richard and Pat Johnston, owners of Wildcat and Ideal, have clean criminal records, so they qualify. And under state law, they can hire anyone they want, said DeModica of the MVD.
911 calls
Since Wildcat opened in 2006, the dealership and its customers have called police on each other at least nine times, sometimes alleging violence, Tucson Police Department records show.
While no convictions resulted, the records show how Wildcat was viewed by unhappy customers, and vice versa.
Former Davis-Monthan airman Chris Coleman had just been honorably discharged from the military when he went to Wildcat in February to buy a car. He ended up calling 911 from an office inside the dealership, saying he'd just been assaulted by general manager Heath Johnston.
Officers were greeted by Heath Johnston and Wildcat sales manager Jason Sackett. They said they suspected Coleman was not being candid about his finances, so they took him into an office and asked him to access his bank account online to prove he had money for a down payment. Coleman got upset, took a swing and had to be restrained, they said.
Coleman told police he was the one who'd been attacked. He said he'd just sat down to use the computer when Heath Johnston "pushed him to the ground and started hitting him," a police report said.
Coleman's injuries — minor abrasions on both hands and a forearm and a small cut on the top of his head — were photographed by police as potential evidence.
The dealership didn't want to press charges. Coleman wanted Johnston charged with assault, but no charges were filed "due to the lack of an independent witness," the police report said. Coleman couldn't be reached for comment.
Police calls to Wildcat began even before it formally opened in September 2006. In July that year, while final preparations were still in progress, Heath Johnston called 911 to report "trouble with a customer."
He told police a customer had been having problems with her car and that the dealership had not yet been able to resolve them. He said the woman lost her temper, swore, and knocked over a pile of papers on his desk.
Johnston wanted to prosecute so police charged the woman with disorderly conduct, trespassing and contributing to the delinquency of minors for using expletives in the presence of her children. All the charges later were dismissed.
Soldiers
Fort Huachuca has received about two dozen complaints from soldiers upset by the treatment they received at Wildcat and Ideal. That prompted its commander to take the rare step of banning soldiers from doing business there. The ban also covers a small used-car lot in Huachuca City owned by Ideal.
Army officials said the ban was necessary to protect soldiers, who move so frequently they often can't take cases to court if auto deals go sour. At least once, a deployed soldier was trying to deal with his car problems from Iraq, they said.
One of the Army complainants was 29-year-old Warrant Officer Cassie Story, a former instructor in the fort's unmanned-aerial-vehicle program now serving in Iraq.
Last year she bought a new Mitsubishi at Wildcat in Tucson. When the car had problems, Story took it for warranty service to Ideal, which also sells Mitsubishis.
She had a recurring problem with window tinting that had not hardened properly, gumming up the window mechanisms. When a phone surveyor called from Mitsubishi to see how she liked her new car, Story mentioned the window issue.
She said that when she went back to Ideal after work that day to pick up her car, general manager Beau Johnston was visibly angry.
"He told me if I ever filed any kind of complaint against his company again, that I would not be allowed to bring my car back for any kind of service," she said.
Story said a scuffle nearly erupted when another soldier began to fear for her safety. "The soldier who was with me wanted to step in and punch him," she said.
Remick, the Johnstons' lawyer, says it was Story, not Beau Johnston, who was out of line.
Remick said the phone surveyor had asked Story to limit her comments to work done by Ideal, which had not done the window tinting. Story "became enraged and difficult to deal with," he said. "At that point she became belligerent and accusatory."
Story's account is one of several similar complaints to Fort Huachuca.
Soldiers said they "were threatened with retribution," post spokeswoman Tanja Linton said. A commonly reported threat was "we will call the cops and have you charged with assault," Linton said.
Beau Johnston told the Star in May that some friction occurred when young soldiers applied for auto financing and were allowed to take vehicles home before final credit approvals were in.
If the soldiers came back as bad risks, the cars then were taken away or soldiers were asked to put down more money. That created so much ill will that the dealerships stopped letting soldiers take cars home before deals were final, he said.
Remick denied soldiers were threatened and said the Johnstons are making strides to increase good will between the dealerships and the Army. They are confident the ban will be lifted soon.
For example, he said, Ideal recently entered into a special arbitration arrangement with the Better Business Bureau to quickly resolve concerns reported by customers. That arrangement, though, covers only the Sierra Vista car lot and excluded the Tucson dealership at the request of the Johnstons' attorney, said Collier, the BBB president.
Linton said the Army is willing to reconsider if the Johnstons can prove to commanders' satisfaction that past problems have been corrected.
Labels: arizona auto dealer fraud, arizona fraud, Tucson auto fraud
