For years, New Jersey has been open to business for shady used car dealers at multi-dealer complexes, including one allegedly tied to a New York crime family, another with apparent links to a Lebanese terrorist organization, and a number of others who couldn't get dealer licenses in their own states.
Some dealers returned the favor by giving the business to consumers. They sold cars with severe defects, or in at least one case, took cash for cars that were never delivered. Blame for the situation has been placed on the New Jersey Motor Vehicle Commission, whose lax enforcement created fertile ground for bad dealers.
In a 178-page report, the State Commission of Investigation said an 18-month investigation concluded that the 11 multi-dealer complexes in New Jersey have benefited from "a history of weak and inconsistent enforcement, aggressive legal challenges, and bureaucratic receptiveness to behind-the-scenes pressure from Trenton lobbyists." The complexes collectively owe New Jersey at least $10 million in taxes, according to the report.
One Warren County dealer whose specialty was used cars exported to Benin in West Africa apparently used banks and financial institutions linked to the terrorist organization Hezbollah. That arrangement apparently only stopped after the dealer found out that federal prosecutors were investigating a money laundering ring involving his financiers.
The report said a multi-dealer complex in Bridgeton was owned by the son of an alleged soldier in the Bonanno organized crime family known in his native New York as "Louie the Leg Breaker." The prior owner of the complex reportedly gave away his share in the business in return for loan forgiveness.
The multi-dealer complexes are more like warehouses than a dealership that sells multiple brands of vehicles. The complex operators typically rent space to dealers located in another state and then provide additional services, including help obtaining New Jersey licenses.
The report said the operator of the Bridgeton complex earns more than $2.2 million annually in gross rent income from 300 dealers. That kind of money can buy a lot, including the assistance of heavyweight lobbyist C. Richard Kamin, a former director of the Motor Vehicle Commission's precursor, the state Division of Motor Vehicles. The SCI report said commission staff influenced by Kamin had gone easy on his client and had approved dealer license applications that had been flagged for violations.
The commission is denying any wrongdoing, but also says it has "drafted pending regulatory amendments geared toward tightening dealer practices." That's good to know. But even better is knowing the SCI not only has sent its own recommendations to Gov. Christie and the Legislature to improve oversight of multi-dealer complexes, but also has shared its findings with state and federal law enforcement authorities.