More than 100 consumers who purchased cars with rolled-back odometers from one of the area's largest car rental agencies will each receive $1,500 from the firm under a settlement reached yesterday by the Virginia state attorney general's office.
The settlement grows out of a $291,600 consumer fraud suit the state filed in April against Corporate Fleet Management, which operates Americar Rental Systems outlets in Virginia, Maryland and the District.
The suit, seeking compensation for 108 consumers as well as punitive fines and legal costs, was filed in U.S. District Court in Alexandria after the company and its president, Richard J. Gillis, were indicted on federal charges related to an odometer-tampering scheme. The 35-count indictment charged them with altering odometers on hundreds of cars sold from Americar's rental fleet between November 1981 and April 1984.
Gillis and his company pleaded guilty in June to six misdemeanor counts of odometer tampering, mail fraud and obstruction of justice under a plea bargain agreement that required Gillis, 46, to be jailed. He is serving a 75-day sentence at the Federal Correctional Institution in Petersburg, Va.
In addition, Gillis, a former president of the American Car Rental Association, was fined $115,000 and his company $54,000.
Under the terms of the consent decree accepted yesterday by U.S. District Judge Albert V. Bryan Jr., the Alexandria-based firm admitted its fraud and agreed to pay the full amount asked by the state.
Assistant Attorney General Wayne T. Halbleib said that the civil penalties and legal costs amounting to $129,000 could later be reduced by the governor. But the $1,500 for each consumer is a firm figure, he said.
"We will work with the defendant," said Halbleib. "It's in nobody's interest," he said, to force the car rental agency into bankruptcy with a repayment schedule it cannot financially handle.
"My client is committed to repaying the consumers," said Gillis' attorney, William B. Cummings, "but he has to have the funds available."
The two sides tentatively have agreed that Americar would pay the money over three years, both attorneys said yesterday. Under that plan, the consumers would receive their $1,500 in installments spread over three years with interest paid at 12 percent, they said.
Yesterday's consent decree also requires Americar to conduct "an educational program" for its employes on federal odometer tampering laws and on the consent decree, advising them that failure to comply could subject them to dismissal or disciplinary action. The employes must submit statements saying they have been so advised.
Americar also is required to display on its premises a notice "of its policy of nontampering with odometers" along with a sample odometer disclosure form that under federal regulations must accompany every sale of a used car.