Auto dealer Ken Rosenfield got a jolt upon discovering that a partner was involved in a kickback scheme at one of his stores. Turns out, the culprit had a dark past, including gem fencing and a prison stretch.

Rosenfield, who heads an Indiana dealership group, since has learned a lot about cons committed against dealerships by customers, employees and, yes, partners.

He has become enough of an expert on slim shady-types to give anti-crime presentations, including one at the American Institute of Certified Public Accountants' National Auto Dealership Conference in Baltimore. Rosenfield also is a CPA.

“People who commit fraud at dealerships are usually good at it and know exactly what they are doing,” he says. “They get high Beacon scores off dead people, use fictitious insurance policies and steal Social Security numbers and driver's licenses.”

Most con artists look normal enough. Rosenfield tells of a nice elderly couple that returned to a dealership for a second test drive, made sure the salesperson was busy, drove off in a Lincoln Town Car “and never came back.”

Sometimes the kindly senior citizen act doesn't work. A woman who looked about 70 years old tried to pull a fast one at a dealership but, when pressed for identification, showed a driver's license saying she was born in 1972, says Rosenfield.

Employee fraud can cost dealers dearly.

“In Orlando, an employee was so unhappy with her Christmas bonus, she stole $4 million from the dealership by literally writing checks to herself by using (doctored) line-item control numbers,” says Rosenfield. “On Sundays, she would sit in church right next to the dealer.”

Many horror stories come out of the accounting office. Rosenfield recommends cross-training personnel and rotating job responsibilities there every six months because “if there are problems with a position, they are going to get caught.”

Here are some of his other tips at fighting dealership rip-offs:

  • Keep vehicle titles and keys locked up. “One store kept keys in a shoebox.”
  • Hire an independent service to inventory parts.
  • Centralize the cashier and limit access.
  • Park cars close together to deter stripping, disable units that can be driven away and block after-hours driveway access to and from dealership lots.
  • Constantly review accounts-receivable schedules.
  • Review “cash-in-deal” jackets for completeness.
  • Review and approve all refunds and voided documents.