Ethics and Cars – Now This Is What Gives Used Car Dealers a Bad Name!

January 22, 2008

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In Dallas, Texas and around the nation – everyday, someone is ribbing on used car dealers saying that they are just not trustworthy. Well, in Richardson, TX it was proven to be true. According to the US Attorney’s office, a Plano, Texas resident, Massoud Mortazavi-Koupai pled guilty before U. S. Chief District Judge Sidney A. Fitzwater to false odometer disclosure and failing to provide notice to consumers of vehicles’ structural damage.

Mortazavi-Koupai, age 47, faces a maximum of three years in federal prison and restitution.

The US Attorney’s New Release states the following:

According to documents filed in the case, Mortazavi-Koupai personally purchased, or directed others to purchase, numerous vehicles at automobile auctions with notification that such vehicles had previously sustained substantial structural damage to the frame or the unibody. These auto auctions required selling dealers to provide notification to purchasing dealers that a motor vehicle had previously sustained frame damage or unibody damage, which indicate structural damage. On a substantial number of occasions, after purchasing vehicles with notification that the vehicles had structural damage, Mortazavi-Koupai sold such vehicles without disclosing the damage to purchasers.

Mortazavi-Koupai also purchased vehicles with inaccurate odometers. Federal law requires that, in connection with the sale of a motor vehicle, the seller must disclose the mileage to the purchaser in writing and sign the written disclosure. In addition, the seller must certify that the odometer reading reflects the actual mileage, or, if the transferor knows that the odometer reading reflects the amount of mileage in excess of the designed mechanical odometer limit, he will include a statement to that effect. If the transferor knows that the odometer reading differs from the mileage and that the difference is greater than that caused by odometer calibration error, he will include a statement that the odometer reading does not reflect the actual mileage, and should not be relied upon. On a substantial number of occasions, after purchasing vehicles with certifications from previous owners that the odometer was inaccurate, the Mortazavi-Koupai sold vehicles with a certification made on behalf of his dealership that the vehicles’ odometers were accurate, when in fact they were not.

As a business ethics speaker, I remind every group I speak to that Every Choice Has A Consequence. The question that always seems to loom when reports like this appear is – did it ever occur to the perpetrator of the fraud that the price of the consequence might well outweigh the short term benefit that was received. Amazingly, many (including myself) never calculated that there might be a consequence and that the consequence might be far more severe than could ever be imagined.

On April 25, 2008 Mortazavi-Koupai will be sentenced. I would not be surprises to see a prison sentence here along with substantial restitution.

Your thoughts?