The majority of charges against a Hermitage man charged with defrauding a New Wilmington car dealership have been held for court.
Jeffrey Michael Huey, 49, of 1980 Parkview Drive, accused of defrauding New Wilmington Motors of $764,635, will go to court on 19 felony counts of theft by deception, 20 counts of receiving stolen property, three counts of deceptive business practices, a misdemeanor charge of theft by deception and three counts of tampering with records.
District Judge David B. Rishel, who heard the case in central court Friday, dismissed four counts of employing an unlicensed salesperson and 89 counts of failing to license a dealer, agent or sales person who buys, sells or exchanges vehicles. These charges are summary offenses charged under the Pennsylvania Board of Vehicles Act.
Huey remains free on $100,000 bond.
Brian Kassalen, a partner at Arnett, Carbis, Toothman accounting services, was the only witness called by Assistant District Attorney Jessica Sullivan at the hearing that took almost three and one-half hours.
Kassalen said he was contacted in December 2012 by Gary and Cindy Butch, owners of New Wilmington Motors— formerly Wagner Motors — to examine company records from May 1, 2009, through Nov. 30, 2012, when Huey was fired from his position as general manager.
He said he was contacted after the Butches were notified by Chrysler that they had in excess of $830,000 worth of new vehicles on their lot. According to the general ledger, new vehicle value was $305,000.
Kassalen said his forensic investigation of company records included reviewing general ledger transactions, bank statement records of random vehicle sales and commissions paid to sales staff. He said he also reviewed monthly statements from Chrysler, credit card transactions and looked at Huey's bank account.
As general manager, Huey was responsible for the day-to-day operation of the business, which included maintaining business records, managing accounts, overseeing lines of credit from the car manufacturer, approving financial transactions and determining commissions paid. He also was in charge of staff, which included three sales associates and a secretary.
Kassalen said he saw financial and accounting irregularities, including undocumented transactions, understated expenses, overcharges on car maintenance fees, overstated dealership revenues, discrepancies in advertising allowances and undervalued expenses. He said he also found misappropriations of more than $52,000 in cash through fraudulent credit card transactions, marketing rewards that should have gone to the dealership but were paid to Huey, incentives provided by the manufacturer and sales commissions. Records show one salesman was shorted in excess of $42,000 between 2009 and 2012, Kassalen said, and another shorted more than $2,500 for 2012. He also questioned more than $10,000 paid out in petty cash with no supporting receipts and more than $13,000 in unaccounted for tire inventory.
He also noted that under terms of his employment, Huey was paid $5,000 per month and a yearend bonus of 50 percent of company profits. He said Huey also provided all information to accountants who calculated the bonuses.
Based on his investigation, Kassalen said, he could not determine if the company made or lost money.
"But I feel no bonuses should have been paid out," he said.
Financial difficulties resulted in the dealership being sold in 2014. It is no longer in operation as a Chrysler dealership.
There was no evidence that customers had been defrauded.
Defense attorney Christopher Capozzi of Pittsburgh, assisted by attorney Brett W. Stedman, who challenged Kassalen's status as an expert witness and portions of his investigation report, said Huey contends that he was a part owner of the enterprise who invested $100,000 in the business and that his pay and bonus payments were the same as Butch's.
Kassalen said he is aware that is the claim in a civil suit filed by Huey, but said he found no legal document to say that Huey is a part owner.