The State Commission of Investigation is alleging widespread corruption through New Jersey's used car dealer industry — saying dealers benefited from strong lobbying in Trenton, and describing ties to organized crime.

A lengthy report form the SCI released Tuesday says multi-dealer locations — where several businesses are housed — are "notorious" for having unpaid taxes. In all outstanding tax liabilities owed by past and present dealers at the State’s 11 multi-dealer locations "are conservatively estimated at nearly $10 million," the SCI said in a summary of its report.

It pointed to what it said were a spate of suspicious financial transactions "on a domestic and international scale," and consumer and bank fraud. The report said multi-dealer locations got preferential treatment by some State Motor Vehicle Commission officials under pressure from lobbyists, letting them circumvent regulations.

One multi-dealer location in particular — New Jersey Dealers Auto Mall in Bridgeton, Cumberland County — "is owned and operated by individuals linked to organized crime and has for years been known to state regulators and law enforcement authorities as a shelter for licensing abuses and various forms of fraud," the SCI said in a press release about its findings.

“We found that the state’s ability to properly regulate, license and oversee certain elements of the used car industry have been subverted and manipulated be influence peddling to the benefit of private interests,” said SCI acting executive director Lee Seglem. “New Jersey from a statutory and regulatory standpoint has some of the weaker licensing requirements for used car dealers.”

The report cited sworn testimony by MVC personnel in which circumstances were described where enforcement of regulations was delayed or derailed by inappropriate intervention.

“What’s been happening is a lot of individual dealers that couldn’t get proper licensing in New York and other states have come to New Jersey to get licensed,” Seglem said. “Some have engaged in a wide of unscrupulous activities and abuses including consumer fraud, bank fraud and suspicious financial transactions on an international and domestic scale.”

The findings don't amount to criminal allegations — but "we have referred our findings to multiple law enforcement and other government agencies for whatever action they deem appropriate, including the Attorney General’s Office,” Seglem said.

In a lengthy appendix of the report, several used car dealers, a lobbyist and MVC officials responded by refuting a variety of the findings.

The SCI recommended:

  • Shifting the licensing and regulation of used car dealers from the MVS to the Division of Consumer Affairs
  • Legislative enactment of a “Used-Car Buyers’ Bill of Rights”
  • A strengthening of the state’s lobbying disclosure laws
  • Requiring dealer financial disclosure and transparency
  • Broadening the basis for denying licenses

The multi-dealer locations identified by the report are:

  • New Jersey Dealers Auto Mall (NJDAM) in  Bridgeton, Cumberland County, with 1,214 dealers
  • Caesar Corp in Hasbrouck Heights, Bergen County, with 243 dealers
  • WNAG Realty LLC, 60 Asbury Rd., Hackettstown, Warren County. 240 dealers
  • Ledgestone Associates LLC in Newark, Essex County, with 145 dealers
  • Dealer Management Services Inc. in Newfoundland, Passaic County, with 133 dealers
  • Duelly Holdings LLC in Toms River, Ocean County, with 118 dealers
  • Foxcreek Inc., Teterboro, Bergen County, with 91 dealers
  • George Yelland Inc. in Delran, Burlington County, with 89 dealers
  • Richard Catena in Teterboro, Bergen County, with 81 dealers
  • Dreese Property LLC in Hasbrouck Heights, Bergen County, with 70 dealers
  • Don‐Lynn Inc. in West Creek, Ocean County, with 26 dealers

Kevin McArdle has covered the State House for New Jersey 101.5 news since 2002. Contact him at kevin.mcardle@townsquaremedia.com. Follow him on twitter at @kevinmcardle1.