If this doesn’t make you think about how your dealership does business, I don’t know what will.

News broke this week about a dealer and 9 of his employees that were indicted by a federal grand jury for conspiracy to commit wire fraud as a result of deceptive advertising, fraudulent sales practices, and falsely reporting sales to the manufacturer. Besides the owner of the dealership, the GM, GSM, finance manager, 2 sales managers, BDC manager, and others were named. The indictment claims that these individuals conspired to "devise a scheme and artifice to defraud and to obtain money from the purchasers of automobiles by means of false and fraudulent pretenses, representations and promises, and for the purpose of executing such scheme utilized interstate wire communications" (specifically, deceptive and misleading radio and television ads). The document also accuses the defendants of cheating lenders by using "false job and income information on various credit applications" for customers.

According to the media stories, each defendant faces up to 20 years in prison if convicted.

This debacle began in 2006, started to unravel in 2008, and resulted in regulatory actions by the state, lawsuits by over 500 customers, and ultimately the bankruptcy and closure of the dealerships. Understandably, the dealer paid a steep price for these shenanigans. But here’s where it gets ugly – 4 years later the federal government has decided to go after the dealership’s employees as well.

Do I have your attention yet?

There’s no telling if this grand plan was the dealer’s brainchild or was cooked up by creative sales department personnel. It doesn’t really matter – they’re all in hot water now. So these employees, who obviously moved on with their lives after the dealership closed, are now facing devastating consequences.

Think about it, even if these guys and gals get off - was it worth being criminally charged, having their reputations ruined, paying legal fees, losing their livelihood and likely having to change professions, and who knows what else?

You may be thinking that this dealership engaged in a really outrageous ad campaign that would never happen at your store – and you’re probably right. It’s likely that your dealership doesn’t engage in ridiculous marketing campaigns like this dealer did – most wouldn’t even consider it. But understand this: the legal climate has dramatically changed and the government is showing in no uncertain terms that they are fed up with deceptive practices at auto dealerships.

Automotive compliance experts have been saying this for quite some time and perhaps now more people will begin to pay attention: the good old days of trying to fly under the radar or considering fines a cost of doing business are behind us. The game has changed and car dealerships and their employees who choose to step over the line have a bullseye squarely on their backs and are at great risk.

Here’s some food for thought:

• If you think that only your employer is responsible for any illegal activities that occur at the dealership and you are not – you are mistaken.
• If you think that since your competitors also engage in deceptive practices you have a valid defense – you are mistaken.
• If you think that a fine or a slap on the wrist is the worst that can happen for unethical or illegal practices – you are mistaken.
• If you think the government only goes after “really bad operators” – you are mistaken.
• If you think that fudging a credit app or lying to a customer is OK because “we’ve always done it this way” – you are mistaken.
• If you think that this will never happen to you – I hope you’re right.

If there’s any questionable activity happening in your store - like deceptive advertising, “creative” credit application completion, payment packing, bait and switch, yo-yo financing, or whatever – you may want to look closely at your dealership’s culture and consider what could happen if the government decided to investigate your store. The downside is worse than ever.

So I ask again, is your job worth going to prison for?

Good luck and good selling.