
                         THE VIRGINIAN-PILOT
                 Copyright (c) 1994, Landmark Communications, Inc.

DATE: THURSDAY, June 30, 1994                    TAG: 9406300565 
SECTION: BUSINESS                     PAGE: D1    EDITION: FINAL  
SOURCE: BY DAVE MAYFIELD, STAFF WRITER 
DATELINE: 940630                                 LENGTH: Medium

LOCAL CAR DEALERS FACE CHARGES IN DMV INQUIRY

{LEAD} A Department of Motor Vehicles sweep of 20 Norfolk and Virginia Beach car dealerships this week was unprecedented in its scope and could lead to steep fines or possibly even jail terms for some of the dealers if they are convicted, a senior DMV investigator said Wednesday.

``This is the first time we've ever done an operation like this,'' Edward P. Ryder Sr., DMV's assistant director of investigations, said of the surprise inspections Monday. He said 20 DMV investigators and 10 agents of the Naval Investigative Service participated in the operation, which focused on examining dealer records.

{REST} As a result of the inspections, Ryder said 19 of 20 dealers inspected will be charged by DMV with a total of 366 misdemeanor violations of the state's motor vehicle code. Five of those charged are new-car dealers; the other 14 sell used cars only.

The state agency has already begun issuing summonses to dealers and anticipates filing some of the charges in the Norfolk and Virginia Beach general district courts as early as today, DMV officials said. DMV hasn't yet released names of the dealerships charged.

A conviction on the most serious of the charges could lead to a jail term of up to one year or a $2,500 fine, or both, Ryder said. Some of the violations are punishable only by fines.

The agency said the alleged violations include a failure to maintain proper business records, misusing temporary tags and allowing unlicensed sales people to solicit vehicle sales. One of the more serious allegations involved in the current probe is that some dealers abused the issuing of temporary tags. Ryder said such tags are supposed to be issued for 30 days and after a sale. But he said some dealers were issuing tags before sales were finalized, and only for three or five days. Then if the buyer's financing wasn't approved, the tag was revoked and the sale canceled, he said.

Some of the buyers complained they lost down payments and processing fees as a result, he said. In addition, he said, DMV was in many cases not paid the title and registration fees due it.

Some of the dealers are also charged, DMV investigators said, with paying cash - typically between $100 and $150 - to people who refer other customers. Such a practice, sometimes referred to in the business as ``bird dogging,'' is not allowed under the motor vehicle code.

It's too early to say whether DMV will seek to have any of the dealers' licenses revoked, he said, noting that that is a separate process within the agency.

Ryder said DMV launched the investigation of South Hampton Roads dealerships after tips from Navy ``security'' officials on or about April 1.

``We got a call from down there that there were some things going on that we needed to be aware of,'' he said. Since the alleged violations affected military-service people, DMV enlisted the Naval Investigative Service, he said.

The only DMV investigation in recent years that comes close to matching the scope of this sweep was a statewide series of surprise inspections of truck stops in 1992, agency officials said. Out of that investigation, a number of the businesses were charged with evading state fuel taxes.

{KEYWORDS} FRAUD DEPARTMENT OF MOTOR VEHICLES AUTOMOBILE DEALERSHIP CAR DEALERSHIP INVESTIGATION

by CNB