Opinion : The Learing Car Dealership

In a press release from August of 2021 (1), Sky Auto Mall said, that they had purchased two car dealerships located in Center Point. The former Junge Ford and Junge Chrysler Dodge Jeep RAM were purchased by Alex Tovstanovsky, Dealer Principal and General Manager of Sky Auto Mall.

The release said that Tovstanovsky and his family were the owners of Prestige Motor Works in Naperville Illinois that grew from a $1,500 investment into a successful family business. The business motto is, “Honesty is not expensive, it’s PRICELESS.”

The press release listed numerous awards including a five start A+ rating from the Better Business Bureau. Tovstanovsky, said in the article that he became an immigrant at age 7, when his family left the Soviet Union, to the United States in 1994, starting out with very little cash and little knowledge of the English language. 

He went on to say "his entrepreneurial drive led him to start a small, fledgling car dealership...at the time we had barely $1000 in our pockets and the audacity to work hard, dream big, and strive to be a part of Americas (sic) exceptionalism."

The release continued, "Tovstanovsky practices what he preaches..." the article said that he and his family donated thousands of dollars to various charities, volunteering  in the local community, while "fighting against anti-business and anti-free-enterprise regulations." The release said that he also served in 2003 as the Auxiliary Deputy Sheriff with the Will County Sheriff’s office.

The press release said that Junge Ford and Junge Chrysler Jeep Dodge RAM will operate under the brand name Sky Auto Mall. Prestige Motor Works and Junge Automotive will continue to operate separately from Sky Auto Mall.

The article includes a picture of him with former Vice President Mike Pence who had made him his dinner guest at a conference. (That idea didn't age well.)

Now the dealership is accused of a $12 million fraud scheme. 

The dealership could have its inventory seized after Stellantis Financial Services, petitioned the court on Monday to immediately seize much of the inventory over fears the dealer may move the vehicles.  Stellantis Financial is the lending arm of the automaker Stellantis, which makes several vehicle brands, including Chrysler, Jeep and Fiat.

Sky Auto Mall, has locations in Newhall and Center Point, and is owned by Igor, Yelena and Alex Tovstanovsky.

The lawsuit alleges that Stellantis loaned Sky Auto Mall the money to purchase vehicles for inventory then the dealer took out similar loans via other lenders, including the Ford Motor Company, on the same vehicles, then they transferred the vehicles between locations to hide the duplicate loans.

Stellantis says that “...by doing so, each lender would fund the purchase of these vehicles at both dealerships—thereby receiving the proceeds of the advances made to purchase the vehicles themselves, rather than having those proceeds paid to manufacturers or auction houses,” the lawsuit claims.

The lawsuit also claims that Sky Auto Mall ran two sets of books to hide the scam. A real one details the fraud and a fake set of books to hide the duplicate loans. Stellantis says that Sky Auto Mall did not repay the loans after selling vehicles, pocketing 1.4 million dollars.

The lawsuit says, “Sky’s principals have acknowledged that they misled (Stellantis) in conversations since Sky’s default and double flooring actions were discovered, including with regard to the financial reporting for Sky,” the lawsuit claims.

Stellantis claims that Sky Auto Mall owes $12.3 million dollars, plus interest and fees. Stellantis is seeking punitive damages from Sky and is seeking to seize all of the cars, parts and equipment that Sky Auto Mall purchased as part of the agreement they made with Stellantis, surpassing $20 million.

A judge is reviewing the case to see if Stellantis' can seize the vehicles as they believe Sky Auto Mall may be planning to move/remove vehicles from the car lots after it “received information” that one of the owners visited the dealership last week and “indicated that a transport truck may soon be arriving at the location, presumably with the intention of removing vehicle Collateral.

(Stellantis) is concerned that one or more Defendants may be planning, or attempting, to remove the Collateral from its current location(s) within Linn County and conceal, obscure or hide such Collateral to the detriment and harm of (Stellantis),” according to the filings.

The lender, Stellantis is offering to put up a $24 million bond. This is double the amount that it is seeking to seize. This amount is required by Iowa law to seize assets in a lawsuit...in case Stellantis should lose the case.

A judge just ruled that Stellantis cannot seize the cars. Kiss 'em goodbye and have fun trying to collect...

Perhaps the dealership should have followed its own motto that, “Honesty is not expensive, it’s PRICELESS.” But then again, he is in America, where apparently we can take advantage of "free money" and the court system is okay with that...only in America.

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(1) Newly Formed Sky Auto Mall Purchases Junge Ford and Junge CDJR in Center Point, IA