Kia claims it was scammed out of at least $500,000 between January 2019 and July 2021.
Selling cars is often a soul-crushing grind. So it’s understandable that dealership employees might feel pressure to cut corners. As one New England dealership recently found out, though, if you get caught straight-up scamming, there can be some pretty nasty consequences.
Kia America has sued Dan O’Brien Auto Group, which operated locations in both New Hampshire and Massachusetts, claiming its three Kia dealerships fraudulently submitted hundreds of fraudulent sales reports, Automotive News reports. In the lawsuit, Kia claims it was scammed out of at least $500,000 between January 2019 and July 2021. Owner Dan O’Brien and COO Tom Kuhn were named in the lawsuit, along with six of the dealerships.
O’Brien reportedly tried to sell his dealerships starting in 2022, potentially to cover up the alleged fraud, and successfully parted with five of them, but the sale of the sixth fell through, allegedly because the buyer discovered a number of false warranty claims. An on-site audit of two dealerships in 2021 by Kia also found at least 20 cars that had previously been listed as sold, and the results of Kia’s investigation reportedly turned up about 300 potentially fraudulent vehicle delivery reports.
“O’Brien’s decision to dispose of the dealerships was the result, in whole or in part, of his and his dealerships’ fraudulent and unethical business practices,” Kia said in its New Hampshire complaint. It also accused O’Brien of using fraudulent sales numbers to earn allocations for more desirable cars at a time when supply was limited, thus hurting other Kia dealerships.
This also isn’t O’Brien’s first run-in with the law. Back in 2021, his Chrysler-Dodge-Jeep-Ram dealership reportedly submitted at least 2,668 fraudulent warranty claims for airbag inflators that it never replaced, defrauding what is now Stellantis $STLA out of about $970,000. At the time, he blamed the service manager and said he reported the fraud himself when he found out.
In 2022, one of O’Brien’s dealerships in New Hampshire agreed to pay $1.25 million to settle an unfair and deceptive lawsuit brought by the state attorney general. The dealership was accused of convincing customers to buy cars they couldn’t afford, falsely claiming customers made more than they did on loan applications and forging signatures on paperwork.
Kia America was reportedly initially unaware of the 2022 settlement, saying later in its complaint, “The fraudulent schemes emanating from the Dan O’Brien Auto Group had a common methodology — the falsification of documents and transmission of the false documents by wire — and had multiple victims.”
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