The president and vice president of the popular dealership were arrested following a year-long investigation into an elaborate car title scheme.
Police began an investigation after receiving complaints from at least 15 customers of Hovey Motorcars, a luxury car dealership.
Richard Dean Hovey Sr. and his son, Richard Dean Hovey Jr., ran the car lot since it opened in 1998.
However, the Hoveys were arrested last week on charges that they defrauded their customers out of $300,000.
The pair allegedly used victims’ money for personal and business expenses rather than bank loans, according to local CBS affiliate KENS.
Fifteen victims described being taken advantage of by the father and son duo since August 2023.
“Detectives uncovered an elaborate system in which Richard Hovey Jr. and Richard Hovey Sr. are accused of illegally taking victims’ money — the value of which was tied to vehicles — without the vehicle owner’s permission and intended to keep it for themselves,” police wrote.
“It was also discovered that all the money was taken as part of one ongoing plan or scheme totalling $300,000 or more.”
Both men, 81 and 58, were arrested for theft of property worth more than $300,000, a first-degree felony offence.
They are also accused of misusing financial assets worth between $30,000 and $150,000.
Following their arrest, they were each given a $350,000 bond.
The US Sun requested comment from Hovey Motorcars, which did not respond immediately.
According to their website, the business is permanently closed.
The arrests in Boerne, Texas, about 31 miles from San Antonio, followed months of another complaint against the company.
Customer Felipe Villarreal informed KENS that he hired Hovey Motorcars to sell his 2020 Ford Mustang GT 500 in October 2023.
WARNING SIGN
“Based on their history, and working on these expensive cars, I figured it was a good fit,” Villarreal said in July 2024.
“The car was parked on the showroom floor, as we agreed.” “There were no test drives.”
Three weeks after dropping off the car, the dealership called Villarreal to say it was gone – and he never received a dime.
Hovey Motorcars had sold the vehicle to a buyer who paid a $10,000 deposit with a credit card.
Days after handing over the car, the dealership discovered that the credit card used for the down payment had been stolen.
However, the fraudsters had already taken Villareal’s car.
Rick Hovey Jr. gave KENS a statement defending the dealership’s actions in the 2020 Mustang case.
“A suspect made a $10,000 down payment on the car, obtained auto insurance, and was subsequently approved for a loan to finance the balance,” according to his account.
“Five days after the down payment was made and one day after the loan transaction was completed, Hovey Motorcars received a letter informing us that the down payment was made with a stolen credit card.”
“We immediately reported it to the Boerne Police Department.
“Despite our diligent efforts and our 26 years of business experience, we became victims of theft and fraud in this instance.”
Villarreal claimed he went to the dealership expecting his insurance or the dealership’s to cover the loss.
But Hovey Motorcars told him he’d need to file a claim through his own policy, pointing to the consignment contract he signed.
According to the agreement, Villarreal had “full coverage insurance” and agreed to be “totally responsible for all damages, repairs, and/or theft” involving the vehicle.
The dealership also informed KENS that their policy would not cover the theft because they did not legally own the vehicle.
When Villarreal reviewed his insurance policy, he discovered that it does not cover vehicles used in consignment sales.
He was left to repay a loan of approximately $60,000 for a car he no longer owns.
DEALERSHIP SCAMS
There have been numerous problems at car dealerships across the country recently.
Just days before the Hovey Motorcars bust, a separate dealership scam in Maine cost car buyers thousands of dollars, this time through impersonation.
Two victims claimed they lost a large sum of money at what they thought was a legitimate local dealership, only to discover it never existed.
Frank Gatto, the owner of Bay City Motors in Auburn, Maine, said scammers were impersonating his company online to trick buyers into sending large sums of money for cars that were never delivered.
One victim, Shaun Tayman of Las Vegas, believed he had found a great deal on a used Toyota Land Cruiser through TrueCar, a national car listing website.
The listing advertised a well-maintained vehicle at a reasonable price.
Tayman moved quickly, initiating a $71,000 wire transfer to complete the transaction.
His bank initially marked the transaction as suspicious.
However, after speaking directly with the alleged seller, the bank approved the transfer.
When the delivery date arrived, Tayman was left with nothing.
The car never arrived, and the seller disappeared.
Gatto claimed the scammers used his dealership’s name and information to appear legitimate.