U.S. Honda Unit Sues Dealers in Bribery Case
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American Honda Motor Co. has launched a counterattack against 39 current and former dealers and former executives it claims were responsible for a bribery scandal that rocked the Torrance-based auto importer in recent years.
In filing the suits, the company is attempting to place blame for a decade-long period of corruption on the ex-managers as well as dealers who allegedly paid bribes in exchange for favors from the company. The suits, which were filed earlier this month in federal court in Baltimore, seek unspecified amounts that the dealers and former managers allegedly diverted from American Honda.
A federal investigation and subsequent trial in 1995 documented that the former managers collected more than $15 million in bribes in the 1980s. The probe led to the felony convictions of 18 former American Honda executives, two former dealers and two outside suppliers of advertising and other services.
American Honda said in 1994 that it intended to recover damages from employees and dealers it believed had defrauded the company. Since then it has canceled five dealership franchises and terminated an undisclosed number of employees for participating in alleged bribery activities.
The company on Wednesday declined to comment, citing ongoing litigation.
The importer has been sued by at least 30 dealers who alleged that American Honda executives at the highest levels knew of and condoned the widespread bribery. These dealers say their businesses suffered because they refused to pay bribes to obtain favorable treatment during the 1980s, when Honda cars were selling briskly and often were in short supply.
The dealers’ suits have been consolidated and are being heard in the Baltimore federal court. American Honda’s suits were filed as part of that ongoing litigation.
Among those the company has sued are former Beverly Hills Honda dealer Peter Epsteen and Stanley James Cardiges, a Laguna Niguel resident who was American Honda’s top sales executive from 1988 until he resigned in 1992.
