Indiana Attorney General Greg Zoeller sued a New Haven used car dealer, alleging unfair business practices that included repossessing vehicles even though buyers were current in their payments.
According to the suit, filed last week in Allen Superior Court against Auto Liquidation Center, the company has charged a document preparation fee of $190 a vehicle, in violation of Indiana law, which prohibits charging such fees unless it is actually incurred in the preparation of documents.
But the majority of the allegations accuse the business of improperly repossessing vehicles or remotely disabling vehicles, even though the vehicles’ buyers were current on their payments. In each of those three cases, representatives of the business contacted the buyers and told them they had days to “redeem” the vehicle by paying it off in full, according to the lawsuit.
While most of the incidents cited by the attorney general correspond to a period of time an employee is believed to have been embezzling payments made to the company, the repossessions occurred after the thefts were discovered and reported to police by Auto Liquidation officials.
In one of the incidents cited in the lawsuit, Auto Liquidation repeatedly disabled a vehicle remotely in August and September 2011. The buyer had to wire money to Auto Liquidation to have the vehicle turned back on.
Then, in October, the vehicle was repossessed, according to court documents.
Auto Liquidation owner Majid “Mike” Zojaji referred calls seeking comment to his attorney. His attorney declined to comment because he had not yet seen a copy of the lawsuit.
The state is seeking consumer restitution, costs, and civil penalties, according to court documents.
The attorney general’s lawsuit is not the first against the company. In the past few years, the company has been sued a number of times, including last November and in April alleging similar practices.
According to court documents, Jorge Chiqui Chaca bought a 2008 Dodge Charger from Auto Liquidation in November. When he bought the car, Auto Liquidation installed a GPS tracking system. Chaca knew the tracker was in the car and would be removed when the vehicle was completely paid for.
But the GPS device wasn’t installed properly and caused the vehicle to malfunction, according to court documents.
Chaca had his mechanic remove it after he was told it would cause irreparable damage to the transmission. The mechanic was to install it the next day when Chaca bought the car back in, according to court documents.
Before he could take the car back to the shop, Auto Liquidation repossessed the vehicle that night. Chaca was told by Zojaji it was because he failed to make the payments.
Chaca had receipts for his payments inside the car, which was now at the Auto Liquidation lot.
He had his mechanic come back to the lot and offer to reinstall the GPS device properly, according to court documents.
Zojaji refused to return the car, saying Chaca had 10 days to pay it off in full or he would not get the car back, according to court documents.
Zojaji denied all the allegations in Chaca’s lawsuit, and the case is still pending in Allen Superior Court.
In the November lawsuit, Celina Douglas claimed she made payments on her car since its purchase in March 2001.
In September, the vehicle was repossessed, even though she was current on the payments, according to court documents.
While officials with the company said the payment had been made and subsequently embezzled by an employee, Allen Superior Court Judge Stanley Levine ordered Auto Liquidation to pay $5,500 to Douglas, according to court documents.
In March, Allen County prosecutors charged Timothy A. Sanders with corrupt business influence and theft. He is accused of embezzling $58,000 from Auto Liquidation by stealing car payments from more than 60 customers between July and September 2011, according to court documents.
He is scheduled to stand trial in October in Allen Superior Court.