Dealers Investigated For “Cash For Clunkers” Fraud – $94 Million At Stake

Dealers Investigated For “Cash For Clunkers” Fraud – $94 Million At Stake

The United States Federal Government’s cynical Keynesian vehicle scrappage program scheme was by all accounts a success (if you believe that blind consumption is a win), but some dealers apparently skirted the rules, and now the government is looking for dealers who may have gamed the system – and may withhold $94 million in rebates because of it.

Dealers have already paid out $71,500 in fines, despite NHTSA calling the shady establishments a minority of participating dealerships. However, some shady claims are still being investigating. Among them,

  1. The overseas exportation of vehicles claimed to have been destroyed after trade-in
  2. $878,000 in “improper payments” which were subsequently returned
  3. Several junkyards maintaining improper paperwork that makes it impossible for government officials to verify vehicle trade-ins

While NHTSA says that most of the dealers are legitimate, but noted that some fines have been as large as $21,000. The government may withhold the $94 million in rebates due to missing paperwork that validates the trade-ins. This figure is expected to make up about 3.3% of all trade-ins.

[Source: USA Today]