ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, December 5, 1996 TAG: 9612050035
SECTION: SPORTS PAGE: B-1 EDITION: METRO
SOURCE: BOB ZELLER STAFF WRITER
Rick Hendrick, one of the nation's largest auto retailers and the owner of high-profile NASCAR Winston Cup teams, was indicted Wednesday on federal charges of money laundering, conspiracy and mail fraud.
Hendrick, 47, of Charlotte, N.C., was indicted by a federal grand jury in Asheville, N.C., on 13 counts of money laundering and single counts of conspiracy and mail fraud. His brother - a business associate - also was indicted on one conspiracy count.
Among the allegations from federal prosecutors: that Hendrick unlawfully used $120,000 in 1991 and 1992 to help pay for homes he provided an American Honda executive. That same executive helped him in a scheme that made Hendrick the nation's leading owner of Honda and Acura dealerships, the government said.
``The primary goal of the conspiracy, according to the indictment, was to enrich certain corrupt American Honda executives and to give the Hendrick brothers an unfair competitive advantage over other persons and dealers in the automobile business,'' the U.S. attorney's office said in a release.
The conspiracy and mail-fraud counts each carry a maximum penalty of five years in prison and a $250,000 fine. Each money-laundering count carries a maximum of 10 to 20 years in prison and fines of $250,000 to $500,000.
Hendrick's business interests control 66 automobile and truck dealerships in 88 locations. At least 26 are Honda, Acura and Lexus locations in eight states - most in the Southeast and others in California and Texas. Lexus and Acura are Honda nameplates.
Rick Hendrick's brother, John L. Hendrick, 45, of Charlotte, also was charged with one count of conspiracy in the 49-page indictment. He holds management positions in some of the dealerships, prosecutors said.
The indictment came two days before a personal crowning triumph for Rick Hendrick - the celebration at the Waldorf-Astoria in New York of his second consecutive Winston Cup points championship as a car owner.
Hendrick knew he might be indicted. But his attorney, Harold Bender, expressed disappointment that the U.S. Attorney in Asheville, N.C., had ``chosen to bring an indictment on the eve of Mr. Hendrick being recognized in New York before the national media for his NASCAR championship.''
Hendrick has been haunted by allegations of financial improprieties for three years, and the reports have prompted him to withdraw into a shell when the words ``Honda scandal'' are mentioned in public.
You want to talk about NASCAR racing? No problem. Hendrick will talk your ear off about stock-car racing. Just don't ask him about the Honda scandal.
There was a time when he would talk about it. Back in 1994, when the Justice Department was prosecuting the malfeasance from the Honda side of the fence, the New York Times picked up on the story. Hendrick talked to Times reporter Barry Meier at length. Hendrick acknowledged he had done ``favors'' for top Honda officials, such as loaning money to buy a house, but never had received anything in return.
``I have never compensated any employee of Honda or any other manufacturer for any franchise or cars,'' Hendrick told the Times in 1994, mirroring his lawyer's statement Wednesday.
Hendrick became convinced he was a target simply because he had become the No.1 car dealer in the United States. His Hendrick Automotive Group had more than $2.2 billion in sales in 1995.
Hendrick likes to do favors for people and make them feel good. And it is this habit - doing favors for friends - that he thinks has been blown out of proportion into a bribery scandal.
There may be more media attention on him in New York because of the indictment, but he will be among friends in the NASCAR family, who likely will sympathize with him and lend support and encouragement.
Hendrick's back-to-back championships as a car owner - with Jeff Gordon in 1995 and with Terry Labonte in 1996 - have certified the value of multiple Winston Cup teams from the standpoint of economics, as well as competitive advantage.
In the past several years, top car owners Robert Yates, Richard Childress, Jack Roush and Felix Sabates have become multiple-team owners. It's a far cry from where Hendrick was when he entered the sport in 1984.
``When we started with Harry Hyde, Harry told us he was the lowest-paid crew chief in the sport,'' Hendrick said last year after Gordon won the championship. ``It was $500 a week. We had four employees and went to Daytona with no sponsor. To think where the organization has come from ... ''
Hendrick could say the same thing about his automobile empire, which started with a single Chevrolet dealership in Bennettsville, S.C., in 1976, when he was 27.
But the indictment casts a long shadow over Hendrick's 20-year march to the top of the automotive dealership world. The federal government now charges he bribed Honda officials to obtain dealerships and shipments of cars.
Hendrick's attorney says he is confident a trial ``will demonstrate the fallacy of these charges.''
The Associated Press contributed information to this story.
LENGTH: Medium: 92 lines ILLUSTRATION: PHOTO: (Headshot) Hendrick. color. KEYWORDS: AUTO RACINGby CNB