An Iowa auto dealership, Sky Auto Mall, has been accused of large-scale fraud involving the double-financing of vehicles. Both Stellantis Financial and Ford Credit have filed lawsuits against the group, alleging that it fraudulently obtained loans on the same inventory from multiple lenders. The scandal has led to 76 layoffs at the Center Point dealership, which operates franchises for Chevrolet, Ford, and several Stellantis brands (Chrysler, Jeep, Dodge, Ram).
The Double-Financing Scheme Unveiled
The lawsuits detail how Sky Auto Mall allegedly secured floorplan financing from both Stellantis and Ford on the same 81 vehicles. Floorplan financing allows dealerships to borrow money to purchase inventory, which is then repaid as vehicles are sold. The dealership is accused of manipulating the system by repeatedly financing the same vehicles with multiple lenders, effectively receiving double the amount of advance payments.
Stellantis first alerted Ford Credit to the suspicious activity in February. When both lenders compared their records, they confirmed that the same vehicles had been financed twice. The dealership reportedly admitted to the scheme and even provided records confirming the duplicate financing attempts.
Concealed Records & Millions in Debt
The alleged fraud involved transferring vehicles between dealerships without notifying lenders, creating two sets of books to hide the double-financing, and withholding over $1.4 million in vehicle sale proceeds. Stellantis claims damages exceeding $12.3 million, while Ford Credit is seeking $6.6 million. The Newhall store, in particular, had exceeded its credit limit by over $1.2 million, according to the filing.
Why This Matters
This case highlights vulnerabilities in auto industry financing. Floorplan fraud isn’t uncommon, but the scale of this alleged scheme is significant. It also underscores the importance of lenders closely monitoring inventory and financial records. The fact that Stellantis tipped off Ford suggests a rare degree of cooperation between competitors in the face of fraud.
The incident raises questions about oversight in dealership financing and the potential for similar schemes at other dealerships.
The Tovstanovsky family — Alex, Igor, and Yelena — are named as co-defendants in the Stellantis lawsuit. The case is ongoing and could lead to further investigations into the dealership’s financial practices.
The industry is now on alert. The incident serves as a warning to lenders about the risks of floorplan financing and the need for stricter controls to prevent fraudulent behavior.
