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# Honda of Santa Monica replaced managers after raid
- URL: https://www.smdp.com/honda-of-santa-monica-replaced-managers-after-raid/
- Published: 2004-03-23T16:00:00.000Z
- Updated: 2026-10-23T04:03:28.000Z
- Author: Guest Author
- Tags: Business, Santa Monica, #archive-import

they overcharged buyers through false “lease or finance” payments. The lawsuit alleges the dealership defrauded its customers by adding false state taxes and fees, lying to customers about interest rates, and tricking customers into making extra payments on vehicles they wanted to buy or lease.

Also according to the lawsuit, dealership officials allegedly added fictitious state taxes of $500 described as “VT Registration.” Customers were told the money was for Department of Motor Vehicles registration, the lawsuit alleges. However, the state has no such fee.

Customers, like Encino resident Brett Fung, had allegedly been given favorable deals in the showroom only to have the dealership’s finance department renegotiate the deals afterwards — a practice forbidden under state law, according to the lawsuit.

Overcharging for a car allows the dealership to pocket a higher profit. In itself, it isn’t illegal to strike a deal where the buyer and seller agree. In this case, however, the fraud allegation stems from deceptive practices surrounding the sales.

Fung told the Daily Press in January of 2003 that he was told he would have to agree to an extended service contract in order to be approved for loans on various vehicles because he had “shaky credit.” In total, the service contracts added more than $4,000 to the sale price of the vehicles. Extended service contracts and additional accessories directly benefit Honda of Santa Monica and its employees through commissions and revenue for the company.

After the dealership was raided, Fung began looking closer at his contracts. He started noticing the discrepancies — there were two separate contracts for the same vehicle, with different figures. The price of the extended service contract would be lower on one contract than on the other. But on the second contract with the lower price, the interest rate on the loan would be jacked up so the bottom line would remain the same.

On a loan for one vehicle Fung was charged 7.75 percent interest, but for another vehicle he purchased months later, he was charged over 11 percent interest. Banks peg interest rates on credit ratings, not vehicles, Fung said. He should have qualified for the same interest rate for both loans because his credit rating had not changed, he said.

About two months after the raid, Fung got about $4,000 back in refunds for the extended contacts from the dealership.

Honda of Santa Monica is owned by North Carolina-based Sonic Automotive, which owns car dealerships across the country. Reportedly, Sonic bought Honda of Santa Monica in 1999 from Kramer Motors Inc. Sonic Automotive was the subject of an investigation that aired on Dateline this past fall for similar alleged fraud schemes at car dealerships throughout the country.

Sonic Automotive representatives did-n’t return calls seeking comment.

Honda of Santa Monica officials told the Daily Press in September of 2002 directly after being served search warrants by the DA’s office, they had already “instituted safeguards to ensure that all transactions are conducted with the highest degree of integrity.”

“The dealership will continue to evaluate its practices to ensure these safeguards are effective, and that customers are receiving the highest level of satisfaction in their car-buying experience,” Honda officials said in their statement.

Just months after the raid, many of the sales people were fired. The dealership’s general manager, its finance department manager and sales manager were replaced, according to Honda of Santa Monica officials.

“We are the best dealership now because of what happened,” Honda of Santa Monica’s sales manager Nasser Nouri told the Daily Press last year. Nouri replaced the former manager two months after the raid. “We go the extra mile to make sure they are OK. Now, customers clearly understand the agreement.

“When I fall asleep, I want to sleep comfortably,” he added.

*Originally published in the Santa Monica Daily Press print edition on March 23, 2004.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/032304.pdf?ref=smdp.com)