Lawsuit Alleges Deceptive Practices at Group's Stores

Two former employees have filed a lawsuit against Kunes Auto Group, accusing supervisors at three Illinois stores of encouraging deceitful practices involving auto lenders.

The complaint, filed on March 30, alleges the supervisors retaliated against former employees Scott Grodeck and Edward Boliaux when they refused to engage in fraudulent activities at the Kunes stores in Sycamore, Ill. The lawsuit alleges the fraudulent practices included:

• Power-booking, a tactic whereby dealers report nonexistent features to deceive lenders into approving loans for amounts exceeding the vehicle's actual value.
• Inflating down payments
• Misleading lenders about customers' financial capabilities

One scheme artificially raised vehicle prices, applying a false "rebate" and using it as part of the down payment.

The lawsuit also claims that Kunes Auto Group encouraged customers to apply for loans through DigniFi, a lending platform primarily designed for car service, repairs, purchases and accessories. The borrowed money was then allegedly utilized as a down payment, which is considered a deceptive practice. The former employees say they were repeatedly pressured to use the DigniFi strategy at Kunes Auto Mall.

The lawsuit alleges that the president of Kunes Auto Group, Gregg Kunes, and CEO Scott Kunes were aware of the fraudulent practices. It names Kunes Hyundai General Manager Martin Epstein, Kunes Chrysler-Dodge-Jeep-Ram General Manager Phillip Lafata and Sycamore Regional Manager John Shaw as individuals who encouraged and participated in the alleged fraud.

The former employees claim Epstein assured them that the Kunes family and Shaw approved of their involvement in fraudulent activities. When Grodeck refused to comply, the lawsuit states the deal was taken away from him.

The defendants in the lawsuit have denied the allegations, stating the complaint is without merit. They emphasize their dedication to customers, employees and the community and express their intention to prove the allegations made by the former employees are false.

Originally posted on Auto Dealer Today