Yahoo Finance Column: Dealer who towed people's cars away amid pandemic is under investigation
Hooman Nissani, one of Southern California's most prominent car dealers, responded to my column last week about him towing away people's cars amid the COVID-19 pandemic by insisting he's gotten a bad rap.
He said that "while one unhappy customer is one too many," the people I interviewed and the many others who have posted complaints online "constitute a small percentage of the customers we have served."
"We have a good reputation with our customers," Nissani told me.
Former employees of his dealerships tell a different story.
They say the company routinely engaged in questionable practices, including not paying off loans for trade-in vehicles in the time required by the state and failing to install extra features that customers paid for, such as special coating to protect paint.
Los Angeles City Atty. Mike Feuer told me his office has joined other law-enforcement agencies in investigating Nissani.
"We take these allegations very seriously," he said. "We have already been in touch with our justice system partners about this business and its practices. We can’t comment further on this pending investigation right now."
Feuer declined to specify which other agencies are involved.
Carol Schwab, the city attorney for Culver City, said her office focuses on municipal matters and "does not investigate or prosecute state law crimes." But she said she would cooperate with the L.A. city attorney's investigation.
Nissani denied that the alleged practices occurred but said that, if they did, neither he nor his managers were aware of them.
"If these practices are occurring, they are unacceptable, and we will take the necessary measures to ensure they stop and that the people involved are appropriately dealt with, including termination," he said. "We intend to undertake an investigation."
Nissani made headlines last year after being ordered to pay $2.4 million in back pay and penalties to settle what state officials called California’s largest wage-theft case against a carwash company. The business failed to pay minimum wage and overtime to 64 workers over three years.
I reported that Nissani had nearly a dozen cars towed from his now-closed Hyundai dealership on the border of Playa Vista and Culver City, apparently without warning, and the customers who had brought in their vehicles for service were slapped with thousands of dollars in fees from the towing company.
Jim Trainor, a Hyundai spokesman, said Nissani "moved vehicles that had been dropped off for service to an off-site facility in order to vacate the property, without informing Hyundai nor the customers who had vehicles at the dealership for service and repair."
He said Nissani ended his relationship with the carmaker shortly afterward, on April 6. Nissani had been a Hyundai dealer since November 2013, Trainor said.
Nissani disputed that any bad blood existed between himself and Hyundai. He said he closed the dealership to use the property for other purposes. (It's being developed as office space for Amazon, the former employees said; Nissani declined to comment on his plans.)
Nissani insisted I had "mischaracterized" Trainor's comments the first time around. He acknowledged drafting a letter he wanted Hyundai to submit to the Los Angeles Times disavowing my earlier column.
"I have no idea why Hyundai refused to do so," Nissani said.
Perhaps I can help.
"There was nothing in my statements to you that was mischaracterized," Trainor told me.
He said the carmaker stands by its earlier position that Nissani had towed people's cars away without telling Hyundai or the customers.
A lawyer representing Nissani on Wednesday wrote to Hyundai's regional general manager, Bob Kenney, with a threat of legal action if the company didn't retract Trainor's earlier comments.
Trainor once again told me he stands by what he said.
I heard from numerous Nissani customers after my column ran last week. They shared their own negative experiences with the car dealer, whose remaining lots continue to sell Chevrolet, Chrysler and Nissan vehicles, among other brands.
I also connected with former Nissani employees who, to put it nicely, were less than enthusiastic about Nissani's business practices.
"It wasn't a secret what was happening," said Sina Afhami, 27, who said he worked on and off for Nissani since 2017 and was furloughed because of the coronavirus from his job as a floor manager at Nissani Brothers Chevrolet in Culver City. He said he quit the dealership May 22.
"We always had people walking into the showroom yelling at the top of their lungs," he said. "We got served all the time with court papers."
A common complaint from customers, Afhami said, was the dealership failing to promptly pay off the loans of trade-in vehicles. Under California law, a dealer has 21 days to fulfill such obligations.
Failure to do so can result in the customer being responsible for loan payments for a vehicle he or she no longer owns. It also can damage the customer's credit score.
"We wouldn't pay until the customer threatened to go to court," Afhami said.
Gustavo Oceguera, 30, who said he served until April as finance manager of Nissani Brothers Chrysler Dodge Jeep Ram in Playa Vista, said that such delayed payments were a normal business practice.
"Every single trade-in we took in, it would take two or three months for us to pay off the loan," he said.
"I would tell management that I'm getting threats from clients," Oceguera recalled. "They'd just give me the runaround. It was about keeping the money for as long as possible."
Amy Kimmelman of Santa Monica thinks the same.
She told me she traded in her 2017 Honda CR-V EX-L on Feb. 13 at Nissani's Hyundai lot. Her contract said Nissani's dealership would pay off Kimmelman's outstanding lease with Honda within 21 days.
Kimmelman, 57, said Nissani's dealership never made the payment, and she's been receiving increasingly angry calls from Honda demanding some money and threatening to report her to the credit bureaus.
"I called management at Hyundai repeatedly," she said. "A manager would never get on the phone. Then the receptionist just started hanging up on me."
Nissani told me his dealership did everything right. He sent me a copy of a check from the dealership to Honda and a Fed Ex receipt indicating it was delivered March 5. He blamed Honda for the payment snafu and said everything was resolved as of May 18.
Kimmelman said she's still struggling to restore what had been a top-notch credit score.
Oceguera said he cc'd Nissani on all his email correspondence with customers to make sure the boss was aware of what was happening.
The former employees told me Nissani kept a close eye on his lots.
"Hooman sees all," said E.J. Massey, 39, who said he worked in various capacities for Nissani from 2014 to 2017, including as a mechanic at the Chrysler dealership. "He always knows what's going on."
Massey described doing repairs on trade-in and repossessed vehicles. He said he and other mechanics would fix any obvious problems, such as a sunroof that wouldn't open.
But if there was an issue that a used-car buyer might not be able to easily spot, such as faulty brakes or a leaking transmission, Massey said, "the managers would tell us not to do anything, just sell it as-is."
"You think you're getting a car from a reputable place with Hyundai or Chrysler on the sign, but we were definitely sending out cars that we knew needed work," he said.
Afhami, the former floor manager, said he and other employees would embellish customers' loan documents to make them appear more creditworthy to lenders.
"They might say they worked for Burger King," he said. "We'd say they were the manager of a Burger King."
The former employees also said salespeople at Nissani dealerships would be pushed by management to sell extra features such as paint coating, GPS trackers and door protectors. These add-ons could run as much as $1,700 combined.
"Some customers got them, but not everyone," said Johnny Salinas, 24, who said he handled online sales for Nissani Brothers Chevrolet until he left the company in April. He's now suing Nissani for back pay, as is Afhami.
"We'd sell the GPS and the door trim," Salinas said, "but it never got installed."
He said that "upper management kept telling us things would get better. It didn't."
I passed along these allegations to Nissani, who took them seriously enough that he brought in Michael Sitrick, a well-known communications and crisis-management consultant based in L.A.
Nissani refused to speak with me over the phone. He insisted all questions and answers be handled by email. He included Sitrick, who confirmed his involvement, on the correspondence.
"This is the first I have heard of any of these assertions," Nissani said. "I do not run these dealerships. Each dealership has a management team.
"Having said that, it is highly unlikely much of what was alleged occurred; many if not all of the assertions are just plain wrong."
Nissani said each of the former employees I spoke with had been fired, demoted "or both." He described them as "disgruntled" and challenged that any of the men would have been in a position to have specific knowledge of any alleged wrongdoing.
Nissani said he didn't tow any cars from the Hyundai lot until he had ended his relationship with Hyundai, which he said was as of March 20, not April 6 as the carmaker says.
In response, Hyundai's Trainor reiterated that the cars were towed "prior to the closing of the dealership."
An invoice from the towing company shows at least one of the cars was moved on April 4 — two days before Hyundai said Nissani officially ended his relationship with the carmaker.
Nissani said his own records indicate the dealership made multiple efforts to contact everyone whose car was towed. He provided dates on which he said calls were made to the two customers I interviewed.
Both customers — Olivia Vera, 26, and Jared Scott-Ransom, 26 — checked their phones again and told me they received no such calls on the dates in question and no messages were left by the dealership. Both said their cellphone was the only number the dealership was given.
Nissani also contradicted Trainor in saying he, and not Hyundai, immediately took steps to rescue the towed vehicles from a Long Beach storage yard and pay all outstanding fees.
Trainor said the carmaker paid the bills and moved the cars to South Bay Hyundai in Torrance, where I confirmed they were being serviced.
Nissani said he and his managers would never tolerate unethical behavior at his dealerships and would fire any employee who engaged in such practices.
He said that if the loan on a trade-in was unpaid or accessories weren't installed, it was probably the customer's fault for bouncing a check or failing to show up for a service appointment. Delaying loan payments on trade-ins wouldn't make sense, Nissani said, because the dealership would be on the hook for any interest.
He said there are safeguards in place that would prevent the practices described by the former workers, including embellishing loan documents and overlooking certain repairs on used cars. Lenders wouldn't have accepted such documents, he said, and the dealership performs 121-point inspections.
"We have thousands of people who have worked for us over the years, and there are some who, unfortunately, remain bitter over getting let go — regardless of the reason," he said.
Even though Nissani said he will take "necessary measures" to end any questionable practices, he said "it is patently false that senior management or I instructed or even knew of the practices noted above — if they happened, which is highly unlikely."
In which case, he has nothing to fear from the investigation by the city attorney and other agencies.
