Las Vegas Federal Jury Awards $1.9 Million in Damages to Hyundai Motor America in Fraud Case;...

Automotive Writers & Business Editors

FOUNTAIN VALLEY, Calif.--(AutomotiveWire)--July 5, 2001

Hyundai Motor America (HMA) has been awarded $1.9 million in compensatory and punitive damages in a fraud and racketeering lawsuit.

The suit was filed against the principals of a paintless dent repair company, Ace-A-Dent Inc., Gary Bowman and Dennis Hallam and a former HMA fleet remarketing employee, Robert Corder, following a week-long jury trial in Las Vegas. Under the federal Racketeer Influenced and Corrupt Organizations (RICO) statute, Hyundai filed today to have the damages tripled.

The suit, filed by HMA in federal district court in Nevada, claimed the defendants conspired to defraud Hyundai through a system of fraudulent invoicing and schemes to divert funds to shell corporations. HMA filed suit upon discovering massive fraud perpetrated by Ace-A-Dent for dent repair services that were never, or not properly, performed.

Hyundai claimed that Ace-A-Dent's fraudulent billing practices led to extreme overcharging, and that, due to Ace-A-Dent's failure to perform adequate repair work, the value of Hyundai fleet vehicles was diminished.

The suit also claimed that Corder, who had the responsibility to oversee and approve the work at the auction was involved in the conspiracy, receiving bribes and kickbacks in exchange for directing work to Ace-A-Dent and for permitting the fraud to take place. Corder had verdicts for fraud, conspiracy and racketeering entered against him.

"Hyundai intended to send a message that this conduct will not be tolerated," said lead counsel Kenneth E. Keller of San Francisco law firm Krieg, Keller, Sloan, Reilley & Roman L.L.P. "The punitive damages awarded in this case should act as a deterrent to future fraudulent activities of this nature."

During trial, HMA produced evidence establishing that there was little to no correlation between the invoices submitted by Ace-A-Dent and the work that was actually performed. HMA also demonstrated that a conspiracy, designed to defraud HMA through the use of a fraudulent invoicing system and monetary kickbacks and bribes, existed among the defendants.

Hyundai Motor America, based in Fountain Valley, is a subsidiary of Hyundai Motor Company of Korea. Hyundai cars and sports utility vehicles are distributed in the United States by Hyundai Motor America and are sold and serviced through more than 500 dealerships nationwide.