NJ probe finds abuses at used-car dealerships

Large New Jersey used car dealers are manipulating rules to their benefit, according to the State Commission of Investigation.

And the largest of the multi-dealer complexes in the state, the New Jersey Dealers Auto Mall in Bridgeton, Cumberland County, is linked to organized crime, said Lee Seglem, acting executive director of the commission.

“There are suspicious money transactions, money laundering possible on a domestic and international scale,” Seglem said. “All sorts of problems involving the quality of the cars that are being sold from odometers being broken to people being duped and ripped off.”

Those abuses also had an impact on state revenue collections.

“We found an enormous amount of unpaid back taxes by dealers based at these locations, upwards of $10 million in unpaid taxes,” he said. “That’s a big implication for taxpayers in New Jersey.”

The investigation determined the dealers were given favored treatment by Motor Vehicle Commission managers who, without the knowledge of the agency’s chief administrator, did not enforce the rules amid strong, and sometimes undisclosed, lobbying pressure, Seglem said.

Seglem has recommend that licensing and oversight of the used car industry be transferred to the Division of Consumer Affairs.

“It would put the enforcement people right on line looking at these guys all the time,” he said. “Plus,  there would a place for consumers to go who felt that they were being ripped off.”