Ford Owner Charged with Car Dealer Fraud

dealer fraudWhitehall Discovery Ford owner/manager Tony Nielsen was sentenced to jail for felony dealer fraud. The former owner of the dealership has confessed that earned more than $300,000. He had defrauded hundreds of customers with an extended warranty scam and failure to pay off loans on traded-in cars. Nielsen owned and Discovery Ford located at operated 3001 W. Holton-Whitehall in Whitehall Township from April 2005 through August 2006. Starting November 2006 the dealership had a new owner and was named Whitehall Ford.

 The investigation of this case took more than a year and was very complicated. During the investigation the state police had to interview more than 400 people and review all the financial documents of the dealership. According to authorities the business of the dealership owner began to falter about three years ago and he started to keep customers’ payments for extended warranties without buying the policies, and failed to pay off the outstanding loans on traded-in cars. The dealership also failed to forward customers’ payments for “gap insurance” to cover the difference between the value of a car totaled in an accident and the amount owed on a new car.

The state police started the investigation in August 2006 when a customer of the dealership contacted them and informed that he had taken a vehicle to another Ford dealer for service and learned the car never was registered for an extended warranty. Investigators quickly found Nielsen’s dealership had failed to forward money, in most cases $2,000, paid by customers for the warranties.

Nielsen declined the opportunity to speak at the court. The attorney of defendant argued for leniency, taking into consideration that the former dealership owner was making efforts to pay complete restitution to his victims.

Nielsen, 43, was sentenced to jail for 10 months. He is eligible for work release, but if he gets one, it will be only for 48 hours a week. The defense requested Nielsen get extra time off jail in order to work at an existing job in the area or to continue flying around the country conducting “tent sales”. The judge vetoed this request of defendant. Moreover, the judge ordered that Nielsen perform 100 hours of community service in the County and placed on 30 months’ probation period.

Pursuant to the order of the Judge Nielsen will also be responsible to pay full restitution to his victims for dealer fraud he has practiced and $78,052 to Universal Warranty the insurance company that covered the extended warranties.

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