I-Team Update: New York City Sues Car Dealer After Accusations of Loan Fraud

Three years after the I-Team revealed a series of lies typed up on a car buyer's loan application, New York City is alleging a pattern of fraud at a well-known Queens auto dealer. 

According to a petition filed by the New York City Department of Consumer Affairs, sales people at the Major World dealer group prepared dozens of auto loan applications containing inflated income and asset statements. The false information helped unqualified buyers purchase vehicles they could not afford. 

In 2014, the I-Team reported on Margaret Zollner, a car buyer who accused staff at Major Chevrolet of tricking her into signing a loan application that falsely stated her income was $60,000, even though she was an unemployed senior citizen who needed food stamp benefits to get by.

Zollner's application also reported that she owned a house, but she rents her home.

"They said I made $60,000 a year. I was on food stamps," Zollner said. 

At the time, a spokesperson for Major World suggested Zollner was responsible for signing her name to inaccuracies on the loan application. 

But the current DCA allegations sound similar to the claims Zollner made to the I-Team three years ago. 

According to the petition, Major World submitted at least 26 inaccurate applications, all of which helped buyers qualify for risky loans requiring them to make payments they couldn't really afford. 

Lorelei Salas, the DCA Commissioner, said often the auto buyers negotiated the car deals in Spanish, but signed loan documents that had been prepared in English. 

"A lot of them feel really pressured," Salas said. "They would walk in and be made to wait for hours. And then, when the business was about to close like at 7 or 8 p.m., they would be shown a stack of papers they had to go through and they were told to hurriedly sign." 

In court filings, Major World denied all accusations of improper business dealings.

The dealer group also issued a statement to the I-Team calling the lawsuit "a misunderstanding about our business practices" and emphasizing only 114 Major World customers have filed complaints with the city in the last three years.

"Almost none of the complaints are about vehicle financing," the statement said. 

Zollner was forced into bankruptcy because of the car payments. She is now asking to join the city's lawsuit against Major World. 

The complaint seeks about three quarters of a million dollars in restitution for car buyers who were allegedly deceived. It also seeks to revoke licenses for several Major World dealerships. Beyond that, the head of the Department of Consumer Affairs is asking City Council to pass a slate of reforms, that would force auto dealers to be more honest with their buyers. 

"I think the Department of Consumer Affairs is announcing there is a new sheriff in town," said Charles Juntikka, the bankruptcy attorney who represents Zollner. "I mean, every dealer in the city must have sat up like this when they saw Major World was brought up on charges for this."