Honda six fined $10K apiece for scam
DOWNTOWN LA — The six former employees accused of fraud for allegedly bilking thousands of dollars from car buyers at Honda of Santa Monica have pleaded “no contest” in a settlement agreement in which their charges have been reduced from felonies to misdemeanors.
Ali Asghar Hussain, Hamid Reza Khaki, Yaprem Zohrab Yaralian, Ahtamet Uersunthorn-wattana, Yaser Alkasem and Thomas Holterhoff all faced felony counts related to the overcharging of customers at the Honda dealership at 1720 Santa Monica Blvd., according to the District Attorney’s office.
The alleged scam primarily involved finance managers tacking on charges of “theft etch” to customers’ contracts without their knowledge. Theft etch marks a vehicle’s parts with traceable numbers in the event of a theft.
According to the felony complaint, 33 customers were bilked out of nearly $30,000 between 2001 and 2002, when all of the defendants worked in the finance and sales departments at the dealership.
Under the terms of the settlement, multiple felony counts of grand theft that defendants originally faced have been reduced to misdemeanors for negligence, according to the DA’s Office. Each of the defendants will be required to pay nearly $10,000 in fines. They will also be on unsupervised probation for the next three years. In addition, the Department of Motor Vehicles will have the option of revoking the defendants’ dealership business licenses, according to Deputy District Attorney Jeff McGrath, a prosecutor in the case.
A preliminary hearing began on March 13 in which Superior Court Judge Michael E. Pastor would have determined if there’s sufficient evidence for the case to warrant a jury trial. However, Monday’s settlement means there will be no trial, which was expected to last at least a month, according to the DA’s Office.
More than $500,000 of theft etch was sold at Honda of Santa Monica by its six fired employees, according to the DA’s office. Under a recent civil settlement, an estimated 1,500 customers who were ripped off can expect to be reimbursed in coming months by Sonic Automotive, Inc., the parent company of Honda of Santa Monica.
Settlement of the civil complaint, which was signed by a judge on Feb. 8, is separate from the criminal case against the six defendants. However, the fact victims will receive restitution and that defendants will likely lose their business licenses has led prosecutors to agree to a settlement of the case, under which they believe justice has been served.
“The victims have been provided restitution [in the civil settlement], and the [likelihood] that the defendants will not be able to sell cars in California, in addition to their monetary sanctions and loss, is sufficient,” McGrath told the court on Monday.
Hussain, 37, who was director of finance at the dealership from December of 2000 to June 2002, pleaded “no contest” to 13 misdemeanor counts.
Khaki, 38, who was finance manager from December 2000 to July 2002, pleaded “no contest” to six misdemeanor counts.
Uersunthornwattana, 44, who was finance manager from January 2001 to August 2001, pleaded “no contest” to three misdemeanor counts.
Yaralian, 39, pleaded “no contest” to three misdemeanor counts.
Alkasem, 43, also named as a coconspirator, is expected to plead “no contest’ to one misdemeanor count on April 24, according to the DA’s Office.
Holterhoff, 63, former general manager, is expected to plead “no contest” to one misdemeanor count on April 24, according to the DA’s Office. Violation of probation, including any other misdemeanor arrests, may cause defendants to be subject to spend six months in county jail for each misdemeanor count to which they have pleaded.
Those defendants who were unable to pay their fines on Monday have been asked to return to court at 8:30 a.m. on March 16, 2007 for an update on the status of their payments. Judge Pastor, presiding over Monday’s settlement, said he expects there to be “substantial” progress on the payments by then.
“The bottom line is, the more you’ve paid by the time we meet [again], the better it is for you,” Pastor told defendants on Monday.
Gary Lincenberg, an attorney representing Khaki in the case, has said since the beginning of the preliminary hearing that defendants weren’t guilty of grand theft and other felonies the DA’s Office originally accused them of committing. He believed the defendants’ behavior was grounds for misdemeanors at most.
Lincenberg explained to the court last week that Honda of Santa Monica may have had some internal accounting practices in place by which some portion of car sales were shared between the sales and finance departments, perhaps to assist with employee commissions.
Lincenberg said the result of this form of accounting would be similar to adding a CD player to a customer’s vehicle, while not charging the customer extra for it.
“Customers didn’t pay penny more than what they agreed to,” Lincenberg said. “I’m glad the prosecutors didn’t close their eyes to the evidence, and were open enough to reach a reasonable settlement of the matter.”
Originally published in the Santa Monica Daily Press print edition on March 21, 2006. Read the original PDF.