Customers of defunct auto dealer file lawsuit
Posted: Friday, March 31, 2006
SIOUX FALLS (AP) -- Some former customers of bankrupt auto dealer Dan Nelson have filed a federal lawsuit, alleging the dealer and a cooperating bank knew they were profiting from illegal activity.
Nelson, of Sioux Falls, is the former principal owner of Dan Nelson Automotive Group and got a series of loans from MetaBank.
According to the lawsuit, Nelson and other associates conspired to take advantage of vulnerable customers with shaky credit records.
A MetaBank official said the claims have no merit.
"We're going to vigorously defend the claims, and other than that, we don't comment on the specifics of pending litigation," said Tyler Haahr, Metabank's president.
The bank is based in Storm Lake, Iowa.
If the lawsuit went to trial, Sen. John Thune, R-S.D., could be a witness. Thune, a friend of Nelson, sat on the bank's board in 2003 and 2004.
A Thune spokesman said his office had not yet seen the lawsuit and could not comment.
Nelson also has had a long friendship with Haahr and with present and past MetaBank board members -- including Thune and Sioux Falls lawyer Mark Mickelson.
The new complaint says plaintiffs paid too much for vehicles and bought warranties that essentially were worthless. The suit accuses defendants of lying about the condition of vehicles they sold and then telling customers asking for warranty repairs that nothing was wrong with the vehicles.
"This is a classic case of consumer fraud," said the lawsuit, which also alleges deceit, conspiracy, racketeering, bank fraud, breach of warranty and violations of credit laws.
Dan Nelson Automotive filed for bankruptcy in June. MetaBank, a major secured creditor, was left with the task of liquidating the company's six dealerships -- two in Sioux Falls, one in Rapid City and three in Iowa.
Nelson, of Sioux Falls, is the former principal owner of Dan Nelson Automotive Group and got a series of loans from MetaBank.
According to the lawsuit, Nelson and other associates conspired to take advantage of vulnerable customers with shaky credit records.
A MetaBank official said the claims have no merit.
"We're going to vigorously defend the claims, and other than that, we don't comment on the specifics of pending litigation," said Tyler Haahr, Metabank's president.
The bank is based in Storm Lake, Iowa.
If the lawsuit went to trial, Sen. John Thune, R-S.D., could be a witness. Thune, a friend of Nelson, sat on the bank's board in 2003 and 2004.
A Thune spokesman said his office had not yet seen the lawsuit and could not comment.
Nelson also has had a long friendship with Haahr and with present and past MetaBank board members -- including Thune and Sioux Falls lawyer Mark Mickelson.
The new complaint says plaintiffs paid too much for vehicles and bought warranties that essentially were worthless. The suit accuses defendants of lying about the condition of vehicles they sold and then telling customers asking for warranty repairs that nothing was wrong with the vehicles.
"This is a classic case of consumer fraud," said the lawsuit, which also alleges deceit, conspiracy, racketeering, bank fraud, breach of warranty and violations of credit laws.
Dan Nelson Automotive filed for bankruptcy in June. MetaBank, a major secured creditor, was left with the task of liquidating the company's six dealerships -- two in Sioux Falls, one in Rapid City and three in Iowa.
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M Steele wrote on Mar 20, 2007 12:46 PM: