(DES MOINES, Iowa) Attorney General Tom Miller said Wednesday he is pleased with a federal plea agreement in a bank fraud case involving a now-defunct automotive dealership chain, in a case that began in 2004 with an investigation and state lawsuit initiated by the Consumer Protection Division.
“This case began six years ago in our office with a large number of Iowa consumers who found themselves in a financial mess because they happened to do business with the Dan Nelson Automotive Group. The business has since closed and gone bankrupt, our office helped hundreds, if not thousands of consumers who were financially harmed by their vehicle purchases and loans, and now those responsible face potential federal prison time,” said Attorney General Tom Miller.
Daniel A. Nelson and Christian J. Tapken, former officers and shareholders of the now-defunct Dan Nelson Automotive Group, Inc. and South Dakota Acceptance Corporation each entered a guilty plea Tuesday in U.S. District Court to Conspiracy to Cause Falsification of Records involving several banks. The U.S. Attorney’s Office alleged the defendants entered into a conspiracy to knowingly and intentionally cause books, records and statements of a number of banks to be falsified.
On January 7, 2005, following nearly 150 consumer complaints, Miller sued the Dan Nelson Auto Group and its principals, which sold used vehicles in Des Moines, Council Bluffs, Sioux City and in several locations in South Dakota. Miller alleged that the defendants violated the Iowa Consumer Fraud Act by using misleading advertising to induce customers to come to their lots. Miller also alleged that the defendants hid the extremely high price of their cars with high interest loan rates, poor loan terms for consumers, and generally poor conditions of vehicles, in addition to performing substandard repair work and inadequate backing of its warranties.
After the defendants filed for bankruptcy on June 20, 2005, they entered into an agreement in 2007 with Miller’s office that precluded them from future business in Iowa associated with the sales, repair, financing, leasing, repossession, advertisement, or warranty of new or used vehicles.
The Consumer Protection Division assisted hundreds of Dan Nelson Auto Group customers by convincing finance companies that took on Dan Nelson Auto Group loans to reduce exorbitant interest rates and improve terms for consumers.
“From beginning to end, this was a monumental effort by our staff, and we appreciate the U.S. Attorney’s efforts to pursue what we now know were violations of federal law,” Miller said. “This was a very unfortunate experience for potentially thousands of consumers, and we’re glad we put a stop to it.”