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inside WATCH OUT FOR AUTO FRAUD CAR DEALERS TIED TO MONEY LAUNDERING SCHEME COMPLIANCE OVERDRIVE

IS TECHNOLOGY - OR THE LACK OF IT - COSTING YOU?

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DEALER UPDATESN E B R A S K A I N D E P E N D E N T A U T O M O B I L E D E A L E R S A S S O C I A T I O N

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MARCH/APRIL 2012 D E A L E R U P D A T E S

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W W W . N E I A D A . C O M

I know a lot of dealers sell a car and just throw on a set of In Transits, but are you paying attention to what you are doing?The In Transits are for the dealers use

only, on a vehicle they sell to the customer. We sell a lot of In Transits to dealerships throughout the year, so one of the biggest questions out there is whether dealers are using prejudice in the use of In Transits.

In our office, the In Transits are what we get the most calls and inquiries about, whether from the public or law enforcement agencies. We hear from a neighbor who noticed a car that has run for the last year on a new set of In Transits every month. A state police agency calls because it has pulled over a vehicle for some traffic violation and is trying to confirm the validity of the temp tags on the vehicle.

This is where you, the dealer, can help out. Do it now before it becomes even harder for dealers to issue temp tags down the road. Here are a few suggestions to make it easier for all dealers. Keep track of your In Transits. Dealers are

always saying someone stole a pack out of the car at the grocery store, mall, off their desk, etc.

Fill out the In Transit legibly. On a regular basis, law enforcement agencies report they cannot read the buyers name on the In Transit or it does not match what is on the purchase contract. Imagine just buying a vehicle and having it impounded because the dealer was too lackadaisical to take the time to write the information on the In Transit legibly.

The In Transit says Dealer Name, Number. Please put the dealerships

name, address, dealer number and phone number. Many times there is just a number, and once again some state trooper has no idea what it means and might have to verify information by calling the dealership.

Do not give In Transits away to the general public or give second, third, etc., sets to a buyer.

When a salesperson leaves the dealership, make sure you collect all his or her unused In Transits.

Do not use them as a way to sell a vehicle on a Buy Here-Pay Here basis without licensing or registering the vehicle until it is paid off. Many times after hours, on weekends and

holidays, we are working with some trooper to get the proper information so he can clear up confusion. As state agencies are closed, the police call us we can access the dealers number so the police can contact the dealer and clear up the problem.

Buy Here-Pay Here dealers, having your phone number on the In Transit would make it a lot easier for someone to contact you about an abandoned vehicle. Yes, this situation also came to our office. All that was on the In Transit was a dealer number, so we got a call about a vehicle that goes back a few years. We were able to look up the number and get ahold of the dealership.

But think of it. What if there had been a change and the dealership had a new dealer number? It would be much harder to accomplish.

I will tell you little bit about some cases I have became involved with. One has to do with Nebraska In Transits and the New York

police. I have had two such cases in the last year. One of them involved our In Transits being used in an illegal chop shop in this case, detectives were trying to find who was supplying the In Transits and to halt the illegal use of them in New York.

The most recent one was in November, when I got a call from a Brooklyn police officer. I received several phone calls through the day. That night, I got a call back from the officer to thank me for the help and to tell me the DA needs my name, as they are filing criminal charges for felony possession of a forged document and no proof of ownership of a vehicle.

I came right home and wrote this article, and the whole time I was thinking, I sure would hate to have that be a legitimate sale, and the dealer did not do a better job of doing the paperwork. Or worse yet, be a dealer giving or selling the In Transits to a New York person to be used illegally as they are actively pursuing the person or persons supplying them.

The last part of the conversation was that Nebraska needed to do more in the regulation of In Transits. This conversation has come up in the past but seems to be coming up more and more. In fact, this was a point of contention the last time the In Transits were changed. As this keeps coming up, I see this arising in the future and changing, not only for the reasons I have outlined but for lost revenues the state might feel it is losing on sales tax.

Just two weeks ago, I was visited by the Deputy State Sheriff Motor Vehicle Fraud Unit, Nebraska Dept of Motor Vehicles. Again the topic was In Transits.

STATE EXECUTIVESMESSAGE FROM YOUR STATE ASSOCIATIONGARY MERRITT, ASSISTANT DIRECTOR

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D E A L E R U P D A T E S MARCH/APRIL 2012

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OFFICERSPresident Doug Borgmann Creighton Auto Sales P.O. Box 365 Creighton, NE 68729 402-358-5252

President ElectDennis DeNovellis Sidney Auto Sales 1229 Illinois Ave. Sidney, NE 69162308-254-3921

Vice President Dale CotnerDales Trucks625 S. Lincoln Ave. York, NE 68467 402-362-5933

Secretary-TreasurerLes Bockmann Bockmann Auto Sales P.O. Box 93 St. Paul, NE 68873308-754-5645

DirectorsRoger Bohrer Catherland Auto Sales 642 N. Webster Red Cloud, NE 68970 402-746-3780

Dean Cerny Columbus Auto Mart 2817 13th St. Columbus, NE 68601 402-564-4952columbusautomart.com

Andy Chase ABC Auto 3801 N. 70th St. Lincoln, NE 68507 402-466-1613

Don Deepe 81 Automotive 1380 River Road Hebron, NE 68370 402-768-6918

Joel Kershner Kershners Auto Korner 220 W. South St. Hasting, NE 68901kershnerautokorner.com402-461-3161 Arlan KuehnKuehn Auto Sales Inc.495 Old Hwy. 20 South Sioux City, NE 68776402-494-2677 www.kuehnauto.com

Brad QuackenbushQ Family Auto 540 S. E St.Broken Bow, NE 68822308-872-2227qfamilyauto.com

Chuck Rogers Chuck Rogers Auto Sales P.O. Box 11 Tekamah, NE 68061 402-374-2400

Jody Smith Jodys Auto Sales 4 S. Jeffers North Platte, NE 69101 308-534-3729 jodysautosales.com

Executive DirectorJan Merritt 5701 Russell Dr.P.O. Box 29107Lincoln, NE 68529800-659-5453 402-464-2089402-464-8878 (fax)[email protected] www.neiada.com

Assistant Executive Director Gary J. Merritt

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WHATSNEW

MAGAZINECONTENTS

ADVERTISERSINDEX

08 Auto Fraud12 Is Technology Costing You?14 Compliance Overdrive

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM WWW.NIADA.TV2521 BROWN BLVD. ARLINGTON, TX 76006-5203 PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR [email protected] DEALER UPDATES IS PUBLISHED 6 TIMES PER YEAR BY THE NA-TIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORATION, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203; PHONE 817-640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT AD-DITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 BROWN BLVD., ARLINGTON, TX 6006-5203. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF NEBRASKA DEALER UPDATES OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEMBERS OF NIADA , DOES NOT CONSTITUTE AN ENDORSEMENT OF THE PRODUCTS OR SERVICES FEA-TURED. COPYRIGHT 2011 BY NIADA SERVICES, INC.

STATE MAGAZINE MGR./SALES Troy Graff [email protected] Andy Friedlander [email protected]/PRODUCTION MGR. Christy Haynes [email protected] Nieman Printing

AutoTrader.com ...................................... Back CoverChase ...................................................................11Manheim ...............................................................9Manheim Omaha ....................................................5Nebraska Auto Auction .................Inside Front CoverProtective ..............................................................7SmartAuction ............................. Inside Back Cover

INSIDE

The Nebraska IADA is compiling a coupon book. Right now we have a coupon from Nebraska Auto Auction for one free buy or sell fee to a new member. Renewing members get $100 off a buy or sell fee.

We are looking for more companies to come forward with coupons. If you have a vendor, transport company, glass company, warranty company, or any individual or company associated with auto dealers that might be interested, please contact them or let us know and we will contact them. Even several coupons at $25 would make a big difference for membership renewal.

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COUPONS MAKE A DIFFERENCE

A $200 donation to the Auxiliary Scholarship Program has been made in the name of Carter Lee Smith.Carter attended the convention last year

he was three months old and numerous members enjoyed playing with him and getting to know him. Four days later, on Feb. 16, Carter passed away due to heart failure from an unknown viral condition.

Michael and Jodi are very touched and appreciative of all the kindness, support and prayers of our members during their time of grief. To show their gratitude they are

making the donation. Michael is the son of Jody and Cindy Smith of Jodys Auto Sales, North Platte. Michael has been attending our conventions since he was 9 years old.

Jody Smith Jodys Auto Sales, Inc.4 South JeffersNorth Platte, NE 69101Office: 308-534-3729Cell: 308-530-0144www.jodysautosales.com

DONATION FROM MICHAEL AND JODI SMITH OF OMAHA

R A2Z EDUCATION SERIES - AutoZoneEducating the independent dealer to deliver the highest quality service levels to your customers, manage your shop efficiently, train your technicians and maximize profits.niada.tv

R Certified Master Dealer ProgramMarch 22-24, 2012Educates dealers on how to manage and grow a profitable business Effective Management Practices, Business Planning, Human Resources, Merchandising. Financial Management Call (800)756-4232 to sign up.

R World Automobile Auctioneers Championship Live online coverage of the event begins at 11 am ET on Friday, March 3O, 2012 and is free for all online viewers. visit www.niada.com and click on the EVENTS tab or call (303) 807-1108.

THE WORLD AUTOMOBILE AUCTIONEERS CHAMPIONSHIP will be webcast live this year for the first time, courtesy of NIADA.TV. The live webcast of the 2012 WAAC can be viewed in its entirety on the home pages of www.niada.tv, www.niada.com and www.waacnet.net . Coverage begins at 11 a.m. Eastern time on Mar. 30 and is free for all online viewers. Cheer on your hometown favorite auctioneers and ringmen, and catch all the fun and excitement of the 2012 World Automobile Auctioneers Championship at your leisure, exclusively on all three websites. For more detailed information please visit www.niada.com and click on the Events tab, or call (303) 807-1108.

WORLD AUTOMOBILE AUCTIONEERS CHAMPIONSHIP

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COUPONS MAKE A DIFFERENCE

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FROM THE DESK OF JAN MERRITTAs I am writing this, it is still four weeks until our state convention we must have our copy into National IADA six weeks prior to the magazine arriving on your office desk.First, I want to apologize if any dealers did not get rooms at the Kearney

Holiday Inn or in Kearney at all. We were told Jan. 16 that there would be no rooms available in the city because of a basketball tournament in Kearney, and we needed to fill our rooms by Jan. 19. After that, the rooms would go back to the Holiday Inn because there was a waiting list for them. I spent the entire week contacting dealers, vendors and sponsors.

Every year (until this year), we contacted the Holiday Inn and asked for a rooming list. I always worked off this list, seeing who was coming. If someone I knew had said he was coming wasnt on the list, I could contact him and remind him to make a room reservation. However, due to the new privacy rules and regulations, the hotel is no longer able to furnish that information.

By 4:30 p.m. on Jan. 19, we had filled our allotment of 60 rooms. So again, I apologize if anyone did not get a room. Next year we will have a whole new plan of attack.

Now, as one of our local sports writers says at the beginning of his articles: Here are some things I know and some things I think I know.

We had some terrific seminars lined up. Gene True, who is with the Auto Fraud Department of the State Patrol, was scheduled to speak. Executive director Jerry Vogler and his wife were expected to come down from Pierre, S.D., for our meeting. Cars.com was set to attend and our web site was to be introduced. Casino Night has always has been a hit. And were confident that all in all, our 35th Annual Convention will go off without a hitch.

And, guess what? We are already planning next years.

Jan. 4, 2012, 10:01a.m.: It begins. The bell rings to open the 102nd Legislatures second session. This is the short 60-day session. It starts with a prayer by Sen. Harms, followed by the color guard, presented by the Nebraska Army and Air National Guard. Then a few technical motions, a short eulogy for Sen. Utter, who passed away last week, the introduction of a few guests then down to the introduction of new bills.

In rapid succession, bills are introduced. By 10:17, all is pretty much quiet nothing going on but a whole lot of talking. Down on the floor, it looks like the first day of school everybodys visiting and talking, papers passing between senators, people running back and forth, yet nothing really going on.

Sitting up in the north balcony overlooking the unicameral chambers reminded me of when I was a kid, watching the movie The Pride of St. Louis. In one scene during the

ballgame, the catcher runs out to talk to Dizzy Dean. The radio announcers visit back and forth about what the catcher and Dizzy are talking about. One announcer says they must be talking about how to pitch to the next batter. On the field, the catcher and Dizzy are shown discussing whether their upcoming fishing trip was planned.

Looking down, I could not help but wonder, with all the back and forth: Are the senators planning for the upcoming session or just using the time to talk about that big buck they shot this past fall or planning the next fishing trip? 10:22 a.m.: Another flurry of bills is introduced, and in just a couple of minutes its quiet again. A row of pages sitting on the bench up front look like a row of pigeons on a roof just waiting to take off.10:30 a.m.: I left the balcony area and went down to the lobby outside the unicameral

chambers. Here, several lobbyists and guests are standing around visiting, laughing and joking.

Among the lobbyists was Loy Todd. I and had a short visit with him and Tim Keigher. For those who remember, Tim used to be our lobbyist and worked with Dennis Rasmussen. Tim said Denny is doing great, which was good to hear, having known Denny for more than 35 years.

A few more bills were introduced, then silence again, then more talking and visiting. In all, 77 bills were introduced, along with two legislative resolutions and one legislative resolution constitutional amendment.11:18 a.m.: Its all over for the day the first day of the 60-day session. The opening day was a lot of pre-hype for a very ho-hum event; something many people wait for and attend every year.

BY GARY MERRITT

OPENING DAY AT THE LEGISLATURE

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I would like to thank everyone for all the support you have given me while Ive served as your president for this year. There is no way I could have done it without Jan and Gary and all of you. It is a humbling experience to do some-thing like this, which is really out of my element, and you all have made it a great experience. I have learned so much and thank you for being part of that.

This past year was once again a time to readjust everything we thought we knew about this business. It had its highs and lows, but it was a good year. The weather has been wonderful and it really helps to shorten up the winter.

It is once again the time of year to start reminiscing about our convention. The convention dates were Feb. 17-19. I am truly grateful for having such a wonder-ful state convention that we all can be so proud of. We always really look forward to it, as a kind of reunion with all our car business family.

Jan and Gary again worked hard at putting together a great list of speakers and fun activities for us all. Casino Night was set to be back, along with a hospi-tality room, our grand banquet and the scholarship auction, which is always such a great time, thanks to you all. On Satur-day afternoon, we planned ice skating for everyone from 1-3 p.m.

We were hoping to increase our num-bers again, and looked forward to seeing new faces and meeting new people at the conventions. I know from personal ex-perience what a wonderful organization this is and how much the things we learn at convention help our business when we return home.

I would personally like to extend a welcome to any new businesses in our organization, and welcome their thoughts and insights. It is always amazing to me how much I find myself learning from you all.

Heres to a prosperous and exciting New Year.

Doug and Nyla BorgmannPresident and Auxiliary President Nebraska IADA

HAPPY BELATED NEW YEAR TO EVERYONE

AUTO FRAUDIN NEBRASKA

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We tend to think auto fraud and scams hit other states and are more prevalent in big cities. In reality, this is not the case, and last year it hit several consumers and one used car dealer that I am aware of.In the first case, the setting was Grand Island, Neb. A fraudulent RV dealership was set up

online to appear as a real dealership. The web site pictured several motor homes and even had a sign in the background to make consumers think it was a real dealership.

The dealership was called Grand Island Truck and RV Center. The scam even had a working phone number to further deceive the consumer. The reality is there was no licensed dealership by the name of Grand Island Truck and RV Center and the location was a vacant lot in Grand Island.

A California woman paid a $20,000 deposit on an RV, and when the RV was not delivered, she filed a complaint with the Nebraska State Patrol.

Gene True of the Nebraska State Patrol Auto Fraud Division, said there had been three reported cases on the dealership with losses totaling more than $60,000. One consumer drove from Oregon to Grand Island to find only the vacant lot. To date, no one has recovered any money from this scam that we are aware of.

The second case hit a little closer to home for our dealers. I was visiting with a dealer at an auction, and he started telling me how he had been affected by auto fraud. The first indication something was amiss came when the dealership received certified letters from a lawyer in New Jersey. The complaint was the lawyers client had not received shipment after paying for a vehicle.

The customer had found a 2010 Toyota Tundra posted online through a prominent automotive site used to market cars. The posting used the dealerships name and did everything to make the customer think that he was dealing with this dealership. There was an email address and phone numbers with the correct prefix.

The title that was presented to the buyer had the dealerships name on it. As it turned out, the title was fraudulent and the dealership address was not an address this dealership used.

The dealer told me he had turned the matter over to the county sheriff, and after some time they were able to clear it up. The authorities contacted the lawyer to let him know his client had been scammed.

The dealer went on to say he had inquiries from locals he knew about two other vehicles that had shown up on the web site listed by the dealership. They wanted to know if the vehicles were still available. Again, the vehicles were posted by a third party using the dealerships name.

The headaches this created for the dealership included the red flags thrown up to its insurance and bonding companies. I am pleased that as of last report the dealership has been able to get this all worked out. Although, the dealer said, to add insult to injury, we just got a bill from the web site for advertising on their site.

It goes to show how easily someone can falsify your dealerships information. Remember most of this information is online, including your dealership number with the Motor Vehicle Industry Licensing Board.

Just as in personal life, you need to keep track of identity theft in your dealership.

BY GARY MERRITT

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DEA Administrator Michele M. Leonhart and U.S. Attorney for the Southern District of New York Preet Bharara announced today the filing of a civil money-laundering and in rem forfeiture complaint (the Complaint) alleging a massive, international scheme in which Lebanese financial institutions, including a bank and two exchange houses linked to Hizballah, used the U.S. financial system to launder narcotics trafficking and other criminal proceeds through West Africa and back into Lebanon. As part of the scheme, funds were wired from Lebanon to the United States to buy used cars, which were then transported to West Africa. Cash from the sale of the cars, along with proceeds of narcotics trafficking, were then funneled to Lebanon through Hizballah-controlled money laundering channels. Substantial portions of the cash were paid to Hizballah, which the U.S. Department of State designated as a Foreign Terrorist Organization in 1997. As alleged in the Complaint, the Hizballah-linked financial institutions involved in the scheme include the Lebanese Canadian Bank (LCB) and two Lebanese exchange houses the Hassan Ayash Exchange Company and Ellissa Holding and their related subsidiaries and affiliates.

The Complaint alleges that the assets of LCB, the Hassan Ayash Exchange, and Ellissa Holding, along with the assets of approximately 30 U.S. car buyers and a U.S. shipping company and related entities that facilitated the scheme, are forfeitable as the proceeds of violations of the International Emergency Economic Powers Act (IEEPA), together with Executive Orders and U.S. Department of the Treasury regulations, and as property involved in and the proceeds of money laundering offenses. The Complaint also seeks civil money laundering penalties totaling $483,142,568 from these entities, representing the sum of the funds they laundered.

DEA and its partners have exposed the Lebanese Canadian Bank as a major money laundering source for Hizballah. The

connection between drug traffickers and terror networks is evident. By attacking the financial networks of those who wish to harm innocent Americans, DEA is strengthening national security and making our citizens safer, Leonhart said.

The intricate scheme laid out in todays complaint reveals the deviously creative ways that terrorist organizations are funding themselves and moving their money, and it puts into stark relief the nexus between narcotics trafficking and terrorism. Today, we are putting a stranglehold on a major source of that funding by disrupting a vast and far-flung network that spanned three continents. Together with our law enforcement partners in the U.S. and around the globe, our commitment to disrupting and dismantling Hizballah and other terrorist organizations is unwavering, Bharara said.

According to the Complaint filed today in Manhattan federal court:

Hizballah, the Lebanese Exchanges and the Lebanese Canadian Bank Hizballah, a Lebanon-based terrorist organization formed in approximately 1982, is responsible for some of the deadliest terrorist attacks against the United States in history. Hizballah is designated as a Foreign Terrorist Organization, a Specially Designated Terrorist and a Specially Designated Global Terrorist. As a result, pursuant to IEEPA, all assets in the United States in which Hizballah has an interest are blocked, and any transaction or dealing with such property, or providing goods or services to Hizballah, is prohibited in the United States or by U.S. persons without an appropriate license.

On January 26, 2011, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) designated the Hassan Ayash Exchange Company and the Ellissa Exchange Company as Significant Foreign Narcotics Traffickers under the Foreign Narcotics Kingpin Designation Act (the Kingpin Act), related to their roles in the money laundering activities of Ayman Joumaa, a Lebanese narcotics trafficker

linked to Hizballah. Joumaa is also designated as a Significant Foreign Narcotics Trafficker. On November 23, 2011, Joumaa was indicted in the Eastern District of Virginia on charges of conspiracy to distribute narcotics and conspiracy to commit money laundering related to drug trafficking by Mexican and Colombian drug cartels.

On February 10, 2011, the U.S. Department of the Treasury, Financial Crimes Enforcement Network (FinCEN) identified LCB as a financial institution of primary money laundering concern. As a result, U.S. financial institutions ended their relationships with LCB, precluding LCB from sending money to the United States. The finding was based on FinCENs determination that LCB was used by drug traffickers and money launderers around the world, including at least one narco-trafficker who provided financial support to Hizballah. LCB had permitted Hizballah-related entities to conduct massive cash transactions, in some cases as much as $260,000 and 200,000,000 Lebanese pounds per day, without disclosing the source or purpose of the money. Hassan Ayash Exchange was LCBs main source of U.S. currency, and LCB allowed Ellissa companies to conduct large cash transactions through the bank without sufficient oversight or disclosures about the sources and purpose of the cash.

The West African Used Car Trade and Smuggling of Cash to Lebanon

From approximately January 1, 2007 to early 2011, at least $329 million was transferred by wire from LCB, the Hassan Ayash Exchange Company, the Ellissa Exchange Company, and other Lebanese financial institutions, including Middle East and Africa Bank, the Federal Bank of Lebanon, and BLOM Bank, to the United States for the purchase and shipment of used cars. The car buyers in the United States typically had little or no property or assets other than the bank accounts used to receive the overseas wire transfers. The cars were

USED CAR DEALERS NAMED IN MONEY LAUNDERING WITH TERRORIST TIES

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primarily shipped to Cotonou, Benin, where they were housed and sold from large car parks, including one owned by the Ellissa Group, a subsidiary of Ellissa Holding.

A significant portion of the cash proceeds from the car sales was transported to Lebanon by a Hizballah-controlled system of money couriers, cash smugglers, hawaladars, and currency brokers. A network of money couriers controlled by Oussama Salhab, an alleged Hizballah operative living in Togo, transported tens of millions of dollars and Euros from Benin to Lebanon through Togo and Ghana. Salhab and his relatives also own and control Cybamar Swiss GMBH, LCC (Cybamar), a transportation company based in Michigan that was frequently used to ship cars to West Africa, as well as other entities involved in the scheme. Cash transported from West Africa was often received at the Beirut airport, where Hizballah security safeguarded its passage to its final destination.

Money Laundering of Narcotics Trafficking Proceeds through Hizballah-Controlled Channels

This same used car, Hizballah-controlled money laundering infrastructure is used to conceal and funnel hundreds of millions of dollars in narcotics proceeds from West Africa back to Lebanon. For example, Joumaas drug trafficking organization, which operates in Lebanon, West Africa, Panama and Colombia, launders as much as $200 million in proceeds per month, through various channels, including bulk cash smuggling operations and Lebanese exchange houses. Joumaas organization uses Hizballah couriers to transport and launder narcotics proceeds, and pays fees to Hizballah operatives to facilitate the laundering of narcotics proceeds.

Another drug trafficking organization, which is led by Maroun Saade, is also involved in the transportation and distribution of large quantities of narcotics in West Africa. Saade is a member of the

Free Patriotic Movement, a Lebanese Christian organization closely allied with Hizballah, and has provided extensive services to Hizballah members engaged in narcotics trafficking and bulk cash smuggling in West Africa. On February 14, 2011, Saade was charged in the Southern District of New York with participating in an international drug conspiracy in West Africa and conspiring to aid the Taliban. Saade is a close associate of Salhab, who relied on Saade to pay bribes to release money couriers arrested for smuggling cash through West Africa.

In 2007 and 2008, approximately $1.2 billion in declared U.S. currency was transported across the Togo/Ghana border on its way from Benin to the airport in Accra, where the cash could be further shipped.

Special thanks to FBI; OFAC and FinCEN of the U.S. Department of the Treasury; Customs and Border Protection of the Department of Homeland Security; the Department of State Bureau of Consular Affairs; and the New Jersey State Police for their assistance in the case.Courtesy U.S. Drug Enforcement Agency

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Technology, or the lack thereof, could be costing you millions.OK, millions might be a bit much, but thousands doesnt sound much better. Either way, profit dollars could easily be leaving your pocket on a monthly basis at an alarming rate.

Technology, or the lack thereof, is costing dealers in every market and in every state in the country. The dealers in question are either technological junkies or technologically challenged. Neither scenario is conducive to success.

In the current economic climate, having and using what is necessary for the foreseeable future makes the best and only economic sense. Not too much, not too little.

Technology touches many facets of the Buy Here-Pay Here industry. Video surveillance, starter interrupt/GPS and software are the most popular areas for technological discussion in BHPH, and those areas seem to be the most under- and over-utilized as well.

Of the three, DMS software is the only one that is necessary for current and future success. The others? Well, thats up to the dealer.

Video surveillance is probably more overused than the other two too many dealers have thousands of dollars tied up in high-tech systems that are really not necessary. Those dealers have convinced themselves they are preventing not only outside theft, but internal theft as well. Surveillance systems have proven to aid in deterring both kinds of theft.

The decision whether to use video surveillance should be based on specific market conditions in regard to preventing

outside theft and providing additional security. A lot in a small rural market that displays 20 or so vehicles and employs a total of four people doesnt necessarily need a 16 exterior color camera system with real-time web access. That example may seem extreme, but that dealer exists.

For preventing internal theft, the money might be better spent on developing the organizations culture. Studies have shown office supplies are the most commonly pilfered items at a business, not money. This is a direct result of lack of pride and ownership in the business by the employee.

A background investigation and personality profile prior to hiring a new employee, and ongoing training and open lines of communication after hiring are ways to instill and improve an organizations culture. There is a good possibility those steps will also reduce turnover and, in most cases, prevent if not halt employee theft and will likely cost less than a surveillance system over time.

Payment devices starter interrupt, GPS, and combo devices are still a topic of great debate and ongoing discussion. This is an area that seems to be either black or white in most dealers eyes. Dealers seem to be 100 percent for them or 100 percent against them, with little in between.

Data shows such devices can increase collections dollars and, in some cases, reduce the amount of personnel needed to manage a portfolio. Data also shows they do not have a significant impact on loss rates. That data is what causes the all-in or all-out mentality. There are just as many highly successful dealers not using the devices as there are using them.

As with any technological advance, they are only effective if used as directed or intended. Too many dealers dont. And by not doing so, they are wasting money.

The decision to use payment devices, and specifically which kind, is a significant one. It is a decision that should be based solely on the dealers personal business philosophy. As with any business decision, it shouldnt be made until all the homework is done. Also not to be overlooked in the decision-making process is preparing internally. Policies and procedures will have to be created and implemented.

Last, but definitely not least, is DMS software. This is an area where dealers have a tendency to cut corners and cost themselves in the long run. Bigger is not necessarily better.

Software packages have undergone significant technological advances in recent years, and there are an increasing number of provider options. For better or worse, nowadays there seem to be more providers than actual dealers. Thats better in that more options provide a more diversified product offering and pricing structure. Its worse in that when it comes time to choose a system, a dealer can be buried by information overload and the process can become overly time-consuming when hes trying to comparison-shop.

Technology can take any business to the next level. Technology can also set any business back. The key lies somewhere between being a junkie and being challenged.

Which one are you?

BY BRENT CARMICHAELEXECUTIVE CONFERENCE MODERATORNCM ASSOCIATES [email protected]

IS TECHNOLOGY - OR THE LACK OF IT- COSTING YOU?

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RENEWALS& NEWMEMBERS

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RENEWALS Chuck Rogers Auto SalesTekamah (2001)

Simply the Best Auto SalesLincoln (1993)

Drewels Used CarsLincoln (2001)

Floorplan ExpressOmaha (2010)

Wolfson Used CarsOmaha (1978)

Above Par CarsHastings (2004)

Columbus Auto MartColumbus (1996)

World Auto SalesNebraska City (2008)

Auto CountryWestern (2009)

AutoFleetGrand Island (2001)

Creighton Auto Used CarsCreighton (1978)

Judys Auto SalesDalton (1996)

Riverside Auto BodyS. Yankton, SD (2010)

Masters TransportationKearney (2002)

Kirby Roth Ins. AgencySeward (2008)

Mikes Auto Sales & ServiceColumbus (1989)

Select Auto Omaha (1992)

Sonny Gerber Auto SalesOmaha (1978)

Jerrys Auto SalesOmaha (1995)

American RecoveryOmaha (2006)

Automotive DevelopmentOmaha (2008)

Cyclone Automotive Train.Indianola, IA (2002)

Dannull Engine Service & Auto Sales Holdrege (1989)

Old Mill Truck SalesNeligh (2001)

Borgmann AutoNorfolk (1990)

National Car SalesNorth Platte (1999)

Kubr ManagementNorfolk (2000)

Manheim OmahaOmaha (1978)

Paris Fisher Auto SalesChadron (2003)

Midtown MotorsNorth Platte (1996)

NEW MEMBERSJ & J Off Road2701 N 27th St., Suite ELincoln, NE 68521(402) 464-3796Jeff Fredricks

BMF Auto Sales7660 Sadler CircleOmaha, NE 68127(402) 597-2666Matt Fairchild

The Car Barn239 Lakeview AcresJohnson Lake, NE 68937(308) 785-2726Mike Schmidt

Great Pains Chrysler Dodge - Jeep / Ram2800 Osborne Dr. EHastings, NE 688901(402) 453-3104Michael Spady

Tyser Repair & Auto Sales702 WashingtonDorchester, NE 68343(402) 946-4321Greg & Becky Tyser

MANY SHERIFFS CREATE REGULATORY UNCERTAINTY

Remember when the Dodd-Frank bill was being debated in Congress and we all hoped motor vehicle dealers would be exempt from the oversight of the new sheriff the Consumer Financial Protection Bureau (CFPB)?Be careful what you wish for. You just might get it. As you know, a dealer exclusion was included in the Dodd-Frank Wall Street

Reform and Consumer Protection Act (Dodd-Frank Act). Ironically, the dealer exclusion might only increase industry regulatory oversight and add compliance uncertainty.

Under Section 1029 of the Dodd-Frank Act, the CFPB may not exercise regulatory supervision or enforcement authority over a motor vehicle dealer that is predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both.

An exception to the exclusion is that the CFPB does have authority over businesses that provide the extension of retail credit or leases involving motor vehicles, retail credit or retail leases directly to consumers and a contract covering the retail sale or lease that is not routinely assigned to an unaffiliated third-party finance or leasing source.

The exclusion and exceptions can be a bit confusing, but the net result is that the CFPB has regulatory authority over Buy Here-Pay Here dealers. And even dealers who do not consider themselves to be Buy Here-Pay Here might be regulated by the CFPB if they are assigning contracts to an affiliated third-party finance or leasing source, or if they are not routinely assigning contracts to an unaffiliated third party. If you assign some contracts and hold others, there might be some uncertainty about whether you are regulated by the CFPB.

The CFPB authority leaves us with a framework in which some auto dealers are regulated by the CFPB and the rest are regulated by the Federal Trade Commission (FTC). That means that in spite of the dealer exclusion, we have two sheriffs in town.

The two federal regulators have promised to work together, but the regulatory framework itself could create obstacles. For example, the CFPB now has rulemaking authority for a number of consumer financial protection laws formerly granted to several federal agencies, including the Truth in Lending Regulation Z and Consumer Leasing Regulation M. In republishing these regulations, the CFPB made it clear that they applied except with respect to persons excluded from the bureaus rulemaking authority by section 1029 of the Dodd-Frank Act. That is a clear reminder that CFPB enforcement authority of Regulations Z and M are technically separate from the enforcement authority of the FTC.

Dodd-Frank also authorized states to enforce certain federal consumer protection laws. The concern is that might result in local differences in interpretation and enforcement of federal requirements. So essentially, there are now three sheriffs in town.

Over time, rules, regulations and interpretations will be published providing clarification on the scope and limits of authority assigned to those three. But for now, we need to deal with the regulatory uncertainty as best we can.

It is helpful to keep in mind that the various regulating authorities are trying to protect consumers from unfair and unscrupulous consumer credit transactions. The best practices for these times apply in all situations be clear, be transparent and be honest in your sales and financing transactions. That should help you satisfy the spirit and intentions of all but the most technical standards of any regulator.

BY CHIP ZYVOLOSKIChip Zyvoloski is a senior attorney for indirect lending at Wolters Kluwer Financial Services.

For more information, visit www.wolterskluwerfs.com/indirect.

ComplianceOverdrive

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