Two Hoosier car dealerships fined for bad deals

INDIANAPOLIS – Two recent cases resolved by the Office of the Attorney General (OAG) serve as timely reminders to all Hoosiers to exercise extreme caution when purchasing used vehicles. In both scenarios, used car dealers failed to deliver titles and/or provide promised warranties to customers who paid for vehicles.

In Delaware County, Capitol Motors LLC failed to procure warranties for 185 consumers. The business — owned and operated by Naim Mahmoud — advertised that each vehicle it sold came with a 3 month/3,000 mile warranty. Upon selling vehicles, however, the business regularly failed to forward payments to a third-party warranty provider, leaving buyers without warranty coverage. In addition, Capitol Motors failed to deliver valid vehicle titles within 31 days from the date of sale to 22 consumers, leaving those consumers unable to register or legally drive their newly-purchased cars and trucks.

Following a complaint filed against Capitol Motors and Naim Mahmoud by the Office of the Attorney General, a Delaware County Circuit Court judge on March 27 ordered restitution totaling $62,480 for 185 consumers who purchased extended vehicle warranties that they never received. The judgment also provides court-ordered titles for two consumers. The judgment requires the defendants to pay civil penalties of $180,500. The defendants are also ordered to pay the state $450 in costs, producing a total judgment amount of $243,430. Finally, the judgment prohibits defendant Naim Mahmoud from owning, operating or managing another auto dealership in Indiana in the future.

A similar case occurred in Allen County. Shaver Motors of Allen County, Inc., and its owner, John B. Shaver, III, accepted payment from 35 consumers for vehicle service contracts – i.e., warranties – and failed to forward the customers’ money to the warranty provider. This left consumers without the warranty coverage for which they paid. Additionally, Shaver Motors failed to provide titles to multiple customers.

Following a complaint filed by the Office of the Attorney General, a judge with the Allen County Circuit Court on March 26 ordered Shaver Motors of Allen County to pay $65,506.85 in restitution to 37 consumers who purchased extended vehicle warranties that they never received. The defendants also were ordered to pay $3,000 to the state for costs associated with the case. The judgment also provided court-ordered titles for three consumers. In addition, the judgment prohibits defendant John Shaver from owning, operating or managing another auto dealership in Indiana in the future.

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