Auto Dealer Charged By State Police
Tuesday, September 25, 2018
The Rhode Island State Police announced on Tuesday that three people have been arrested on charges that they collected $150,610 in illegal fees from 31 customers at the former Douglas Auto Sales car dealership in Providence.
Those arrested were:
Anthony J. Pate, age 73, of 100 Valerie Court, Cranston
Thomas A. Palangio, age 56, of 125 Midway Road, Apt. #108, Cranston -- he is a former State Representative from District 3 (Smith Hill)
Bruce W. Rogers, age 64, of 500 Warren Ave., East Providence -- he is the former Mayor of East Providence
Pate is listed as the owner of Douglas Auto Sales. Palangio, who is listed as the owner of the property, served as its general manager. Rogers was an employee.
All three were charged with:
Obtaining money under false pretenses ($150,610)
Submitting false documents to an agent, employee or official
Providing false statements to fraudulently obtain license or registration
Forgery
Conspiracy
Obstruction of justice
All three suspects were arrested earlier today and processed at Rhode Island State Police Headquarters. They are scheduled for arraignment in Third Division District Court later today.
According to the RISP, the arrests stemmed from an investigation initially begun by members of the Rhode Island Division of Motor Vehicles Dealers’ License and Regulations Office into the operations and practices of Douglas Auto Sales at 702 Douglas Ave. in Providence.
Their findings were presented to the Motor Vehicle Dealers License and Hearing Board, which concluded that Douglas Auto Sales had allegedly violated numerous rules and regulations governing motor vehicle dealerships. The board fined the dealership $518,000 and revoked its license to operate on July 11, 2018. The board also referred the case to the Rhode Island State Police to determine whether there were any criminal violations.
An investigation by members of the Rhode Island State Police Auto Theft and Insurance Fraud Unit found that the three suspects allegedly presented false statements and documents to obtain a dealers’ license.
It further found that Douglas Auto Sales offered a program called “Buy Here, Pay Here,” through which consumers with poor credit could purchase vehicles from Douglas Auto Sales, which would provide financing for the vehicle. Consumers would then pay Douglas Auto Sales an agreed-upon amount of money each week until the vehicle was paid off.
However, in addition to the agreed-upon sales price for the vehicle, Douglas Auto Sales also allegedly charged customers several fees that they were not entitled to collect, including:
- A warranty fee for a warranty that was already included in the cost of the vehicle
- An “insurance cap fee” (gap insurance) that they were not allowed to charge because they do not have a license to sell auto insurance
- The dealership also allegedly overcharged consumers for a “doc fee” (document preparation fee) covering the cost of preparing documents relating to the sale and registration of the vehicles.
As a result of their investigation, members of the Auto Theft and Insurance Fraud Unit determined that Douglas Auto Sales allegedly charged 31 customers with a total of $150,619 in illegal fees in 2017, alone, and obtained a warrant for all three suspects.
This investigation is continuing. The Rhode Island State Police is searching for other consumers who may have been impacted by the alleged illegal fees.
Anyone who purchased a car within the past three years from Douglas Auto Sales in Providence using the “Buy Here, Pay Here” program is asked to contact Supervisor Kevin Rabbitt or Investigator Anne Mancini at the Division of Motor Vehicles Dealers’ License and Regulations Office at (401) 462-5746.
