A.G. Schneiderman Shuts Down Rochester-Area Used Car Dealership for Defrauding Consumers

ROCHESTER, N.Y., April 1 -- New York Attorney General issued the following news release:

Attorney General Eric T. Schneiderman has shut down a Rochester-area auto dealer that misled customers and failed to pay off liens on used vehicles. In numerous cases, the dealer, Frontier Autohaus, accepted cars for trade-in that still had remaining loan balances and failed to pay off these balances before reselling the cars to unwitting consumers. As a result, previous owners remained on the hook for their original loan, and new owners were unable to register their vehicles.

Attorney General Schneiderman filed a lawsuit that resulted in the Monroe County Supreme Court ordering the dealership permanently closed, mandating the sale of its assets, and prohibiting its owner, Shawn Minnehan, from ever again operating a car dealership in the State of New York. The dealership and its owner are also required to pay $289,000 in restitution to 46 consumers, and $50,000 in fines and other costs to New York State. Attorney General Schneiderman's office also partnered with several financial institutions to help ensure the return of vehicles to consumers who were defrauded, the forgiveness of loans for consumers who were misled, and the payment to victims of proceeds from a Department of Motor Vehicles insurance bond.

"A car is one of the biggest purchases many New Yorkers will make, and consumers should have confidence that they will not be misled by unscrupulous businesses that fail to uphold their legal obligations," said Attorney General Schneiderman. "My office will aggressively pursue those who flout the law and abuse consumers in the marketplace."

An investigation by Attorney General Eric Schneiderman's Office found that Frontier Autohaus did not have clear titles to many of the cars it sold, and, in some cases, no title at all. Consumers who took out loans to buy cars from Frontier Autohaus discovered weeks later that the cars had liens against them because Frontier Autohaus had failed to pay off loan balances and titles were not transferred to consumers. As a result, consumers were at risk of having their vehicles repossessed by lenders who held liens that Frontier had failed to pay off.

Without the titles, consumers were unable to register their vehicles and could have had their licenses suspended if they continued to drive them. These consumers were stuck making payments on the new loan while unable to legally operate the vehicles. Additionally, many consumers traded in cars when they purchased their vehicles, but Frontier Autohaus did not pay off these trade-ins before reselling. As a result, lenders continued to pursue loan payments from consumers for cars they no longer possessed.

Frontier Autohaus also promised to handle the title and registration transfer for consumers for a fee, typically $150, and issued temporary registration stickers that permitted consumers to drive their newly purchased cars for 45 days. Attorney General Schneiderman's investigation revealed that Frontier often failed to submit registration and title materials to the DMV for consumers who paid Frontier to handle this service. These consumers were forced to go to the DMV and pay a second time to register their vehicles.

In addition to unscrupulous sales and titling practices, Frontier charged customers for warranties to cover the used cars they purchased, but the company pocketed the money instead of purchasing coverage from the companies responsible for administering warranty coverage. When consumers attempted to use the warranty coverage, they found that none existed.

Consumers who have additional complaints about Frontier Autohaus should contact the Attorney General's Rochester Regional Office Consumer Frauds Bureau at (585) 546-3240.

The Attorney General wishes to thank the New York Department of Motor Vehicles for its assistance in this investigation. In addition, the Attorney General thanks University of Rochester Graduate Student Tonya Reetz and Senior Consumer Frauds Representative Emily Brightman for providing forensic analytical support.

The investigation was handled by Supervising Investigator Christopher Holland with assistance from Robert Ubaldini. The case was handled by Assistant Attorney General Benjamin Bruce in the Rochester Regional Office, which is led by Debra Martin, Assistant Attorney General In Charge. The Rochester Regional Office is a part of the Division of Regional Offices, led by Martin J. Mack, Executive Deputy Attorney General for Regional Offices.

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