The California Department of Motor Vehicles (DMV) has charged Gunderson Chevrolet, located in El Monte, Calif., with multiple counts of fraud, deceit, and misrepresentation in connection with the sale and lease of new and used cars to more than 1,500 customers, during the period from February 1999 to May 2000. It is the largest dealer fraud case in the past few years in California.

Central to DMV's case against Gunderson Chevrolet is the selling of a windshield etching theft protection program. Under this program, ID numbers are etched on the windows of vehicles to clearly identify the vehicle in case of theft. Purportedly, if one of these vehicles was stolen, the owner of the vehicle participating in the program could receive up to $5,000. DMV alleges that Gunderson Chevrolet fraudulently used and misrepresented the nature and the price of this theft protection program in more than 1,500 cases and added more than $400 to the price of each vehicle.

The suggested retail price for the theft protection program was $299. The actual cost of the program to Gunderson was $29. According to DMV, the Gunderson Chevrolet sales staff promised customers there would be no additional charge for the theft protection program, but later added hundreds, sometimes thousands of dollars, to the price without the acceptance or knowledge of the customers.

In connection with 54 vehicles involved in the window etching theft protection scheme, DMV contends that Gunderson violated multiple Vehicle Code provisions designed to protect customers. For example, in three cases, DMV alleges that customers paid for the etching, but never received it.

The DMV allegations against Gunderson also include:

*Selling used vehicles as new.

*Forgery.

*Failing to disclose the previous rental status of vehicles.

*Odometer fraud.

*Adding service contracts to purchase contracts without the buyer's consent and, in some cases, later refusing to honor such service contracts.

*Offering LoJack Recovery Systems as free and later charging for them. (The LoJack system is an electronic tracking system to locate stolen vehicles.)

*Failing to install LoJack systems after charging for them.

*Misrepresenting loan payments to customers.

*Misrepresenting interest rates to customers.

These serious violations, if proven, are grounds for the DMV to suspend or revoke Gunderson's vehicle dealer license that permits the dealership to do business in the State of California.

On Oct. 24, 2000, DMV served Gunderson Chevrolet with an accusation (a formal legal document used to initiate an administrative license suspension proceeding for the suspension or revocation of the dealer license). Gunderson filed a Notice of Defense contesting all the allegations. Most recently, Gunderson filed a Motion to Continue the hearing that is scheduled to begin on April 16, 2001.

The case will be heard by an administrative law judge of the Office of Administrative Hearings. After the hearing, DMV Director Steven Gourley will review the proposed decision of the administrative law judge and make a final decision in the case.

DMV has also referred this consumer fraud matter to the Los Angeles County District Attorney for possible criminal prosecution.

The investigation was launched as a result of information provided to DMV by a KCBS-TV investigative reporter.

The DMV licenses drivers; maintains driving records; registers and issues titles to vehicles and vessels; investigates auto and identity related fraud; licenses vehicle dealers, salespersons, vehicle dismantlers, driving schools, and traffic violator schools.

The DMV is under the Business, Transportation and Housing Agency.

Additional information about the DMV can be found on the department's Web site at www.dmv.ca.gov.