Cash for Clunker dealers being investigated by the NHTSA

The United States government is reported to be investigating at least 20 automotive dealerships that have allegedly violated the rules of last year’s Cash for Clunkers program. Auditors say that up to $94 million in rebates may ineligible due to the lack of proper documentation provided by the dealer.

The National Highway Traffic Safety Administration, after a $3 billion car-shopping frenzy, is now going through the enforcement phase and says that nine dealers have paid fines totaling $71,500.

Spokesman Karen Aldana for the NHTSA said that there isn’t a significant amount of widespread fraud and said that violators consist of a small fraction of 18,915 dealers that participated in the program. A total of 678,418 new car buyers received rebates of up to $4,500 for trading in older models for more fuel-efficient vehicles.

Auditors say that fraud ranges from dealers exporting about two dozen old cars instead of destroying them according to the rules of the program, to improper payments being returned to the U.S. Treasury.

– By: Stephen Calogera

Source: USAToday