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Former dealership employee alleges he was fired for objecting to fraud

A former employee is suing the Thompson Automotive Group because he says he was fired when he refused to participate in a fraudulent customer loan application scheme.

Joseph Palumbo, who has worked at dealerships in the region for more than 25 years, was hired by Thompson in late 2014 as a finance manager.

Though he was repeatedly praised by management for increasing profits in his first six months with the company, Palumbo alleges that, in mid-2015, management changes affected how the finance department operated.

The new general sales manager allegedly restricted the lenders who received loan applications only to those with whom he had a personal relationship; he also rewrote applications to include more “favorable data” so customers would not be rejected, according to the complaint, filed in Baltimore County Circuit Court on Monday.

“In other words, (the manager) began engaging in a complex fraud to mislead banks and lending institutions into approving customer auto loans that would not otherwise have been approved so that Thompson Hyundai Mazda’s financial numbers would increase, thereby increasing (his) income,” the complaint states.

Palumbo said that after customers filled out loan forms by hand, the manager entered their information into a computer — altering it as he did so — and then asked Palumbo to have the customer sign a typed copy that would be mailed to lenders. Changes included increases in the customer’s income or length of employment or decreases in the amount of mortgage payments.

“From late 2015 through March 2016, Thompson submitted dozens of false and fraudulent loan applications to various lenders,” the complaint alleges.

A representative from Thompson did not return a call seeking comment on Tuesday. An attorney for Thompson, Eileen C. Riley, of counsel at Jackson Lewis P.C. in Baltimore, declined to comment on the lawsuit Tuesday and said she had not seen it yet.

After Palumbo’s refusal to have customers sign loan applications with incorrect information, the manager changed the policy so that Palumbo was prohibited from speaking with lenders. Palumbo was fired in March 2016 even though “he had never been written up, warned about his job performance, or placed on a performance improvement plan,” according to the complaint.

Andrew Dansicker, an attorney for Palumbo, said his client was “shocked” by the situation and, shortly after the practice was employed, refused to participate.

“We certainly think that the discovery will prove that Mr. Palumbo was doing an excellent job working for Thompson and the reasons that were given (for his dismissal) were false,” he said.

Dansicker said he does not believe that Palumbo reported the alleged fraud to authorities.

Since losing his job, Palumbo has applied for dozens of positions in the region and said he believes negative references from Thompson are causing job offers to be revoked.

“He’s been unable to get a job in his field for the last three years,” Dansicker said.

The lawsuit alleges wrongful discharge and defamation and seeks more than $1 million in damages on each count.

The case is Joseph Palumbo v. Thompson Automotive Group.


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