LA PORTE – A car dealership in the Houston area abruptly closed its doors a few weeks before Christmas. Fast forward to the end of February and customers still don’t have their registration or license plates - all because the dealership didn’t pay.
It’s a classic case of “robbing Peter to pay Paul.”
The customers are Peter and the banks, state, and warranty companies are Paul.
But here’s the catch, the dealership doesn’t have enough money to pay Paul, meaning those customers are stuck with incomplete paperwork, paying a loan on a vehicle they traded in, or don’t have extended warranty protection they paid for.
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“It’s kind of heart-wrenching, actually,” said Kevin O’Neill, who paid cash for a brand new Mitsubishi Outlander last year.
Kevin bought the SUV for his wife.
Since then, he’s been going back and forth with the now-closed car dealership and with the Texas Department of Motor Vehicles (TxDMV).
His story is similar to others that we began investigating last December.
A customer buys a car and pays for the taxes, title, and registration, but the dealership never pays to file the paperwork.
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In a December interview, the manager of the closed dealership said the owner, Alex Sinno, ran out of money.
They admitted to still selling cars, taking in trade-ins, and then not paying off those car loans meaning their customer was stuck with two loans - one for their new car and the other for a car they traded in and no longer possess.
Luckily for Kevin, he paid cash, so he’s not stuck with loans.
His issue is not getting the registration, license plates, or title.
When you buy a new car, you’re given temporary 90 tags. Those are long expired.
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Kevin is on his second of three possible one-month extension tags.
After mid-April, he won’t legally be able to drive the car anymore.
Gage Goulding: “It has to be incredibly frustrating.”
Kevin O’Neill: “Why, it is. Like you said, you buy a car and it’s the car my wife wanted. Now I can’t do anything with the car because I got to let it sit until I can get the tags and I get a title for the vehicle.”
Kevin says he also paid for an extended warranty that the dealership never funded.
Gage Goulding: “How much does the state want you to pay?”
Kevin O’Neill: “[The] state wants me to pay another $2,200 in taxes.”
Gage Goulding: “Which you already paid.”
Kevin O’Neill: “Which I already paid on the buyer’s order.”
Gage Goulding: “Plus the $2,000 warranty that wasn’t paid for either?”
Kevin O’Neill: “Correct.”
Gage Goulding: “So, you’re out 4200 bucks?”
Kevin O’Neill: “Yeah.”
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According to the Texas Department of Motor Vehicles, there are 45 open cases against Bayside Mitsubishi.
“Currently, TxDMV has 45 open cases related to Bayside Mitsubishi,” a TxDMV spokesperson wrote to KPRC 2’s Gage Goulding. “While we cannot discuss details of open cases, we share the frustration of consumers whenever Texas dealers fail to transfer vehicle titles as required by law. In cases involving late title transfers, our investigators work to locate and facilitate the transfers for consumers, while also gathering evidence to support violations against the dealers.”
In the meantime, customers are stuck in a sort of monkey in the middle.
Gage Goulding: “The state has a bone to pick, but that bone to pick isn’t with you. It’s with the dealership.”
Kevin O’Neill: “That is correct. Amongst all the other people. It’s not the people, it’s them that they should be picking the bone with, not us.
So, what happens now for those stuck?
We went straight to the guy with the answers: Kenny O’Kane.
He helped open this car dealership a decade ago. That’s before the current owner, Alex Sinno, even owned the place.
Kenny isn’t the manager here, but the more appropriate title would be “Clean Up Man.”
His bosses calling him to this dealership to clean up the mess that was made by a previous general manager, according to O’Kane.
“I just got back to try to clean that stuff up,” he told KPRC 2 on Friday.
We spoke with him back in December during our initial investigation into the business.
Fast forward to today, the car lot is empty and the lights are off. But still, many customers are left in the dark without help from the dealership.
“We probably still have about, I’d say 60 to 70,” O’Kane said. However, Alex’s put some of his own personal money in to change to transfer some of the license plates and pay the sales tax.”
His boss reportedly forking over $50,000 to settle sales tax, registration fees and title documents that were previously unpaid.
Speaking of unpaid, O’Kane himself still hasn’t seen paycheck since September. He’s assumingly working under good faith that he’ll one day be paid by Sinno.
But here’s the problem. There’s not a hill standing between those two points, it’s an entire mountain.
O’Kane estimates they need another $800,000 to settle all of the outstanding debts to ensure every last customer is made whole.
Gage Goulding: “What’s the realistic deadline for that last customer to be 100% taken care of?”
Kenny O’Kane: “I would say 90 days, but hopefully within 45 to 60.”
For customers like Kevin, though, his days of driving down the highway are numbered.
His temporary tags expire in April, meaning if Kenny can’t come through, he has bigger problems on his hands, which could include paying the taxes and fees himself.
“All I got is a paperweight after mid-April,” O’Neill said.
The state agency in charge of overseeing car dealerships says each customer can contact the TxDMV to file complaints and also get the information they need to keep their vehicles on the road.
“Texas dealers are required to process title and registration for their customers within 30 days of purchase or 45 days if the dealer provides financing,” a TxDMV spokesperson wrote. “Buyers who do not receive their registration and title in time can file a dealer complaint at www.TxDMV.gov/complaints. If a buyer’s temporary tag expires before the complaint is resolved, they may purchase a 30-Day Permit from their county tax office or a Texas Department of Motor Vehicles (TxDMV) Regional Service Center.”
Pending the outcome of these cases, the dealership and its owner could be slapped with fines by the TxDMV.
But we won’t know that for each individual case until they are formally closed.
“The 45 open cases are in progress,” a spokesperson wrote. “Any sanctions would come at the conclusion of the investigation. In dealer cases, sanctions may include warnings, civil penalties, (monetary fines), or license revocation. The penalties depend upon the nature of the violations, facts of the case, prior violations, harm to consumers, and actions by the licensee to minimize harm.”
