Prominent Sacramento car dealer Blanco accused of fraud

Sacramento auto dealer Paul Blanco, who has touted his involvement in minority communities statewide, was sued Monday by state Attorney General Xavier Becerra for allegedly preying on vulnerable customers with false advertising, phony credit statements and products such as service contracts that added thousands of dollars to purchase prices.

The lawsuit, filed in Alameda Superior Court, accuses Paul Blanco’s Good Car Co. of deceiving buyers and lenders in their purchases of cars and trucks, including instances where service contracts and other add-on products were hidden in purchase paperwork by Blanco workers “sometimes literally by covering them up with their hands,” Becerra said at a news conference in Sacramento.

“We have no idea at the end of the day how many people have been defrauded, how many people have been deceived,” Becerra said.

The Sacramento dealership referred calls for comment to Chief Financial Officer Putu Blanco, Paul Blanco’s wife, who issued a statement denying the allegations and vowing to fight the lawsuit.

“Our family-run business has helped hard-working Californians who cannot afford or don’t have the credit score necessary to buy a car at other dealerships do so,” she said. “Paul Blanco’s Good Car Company has rigorous controls and a culture of compliance in place to ensure California regulations are followed and consumers are protected.

“We will fight this misguided action vigorously to demonstrate to the Attorney General and his lawyers that our customers and California consumers come first.”

The company’s statement accused Becerra’s office of focusing on “technicalities,” such as “stating in radio ads that ‘everyone can get financing,’ when in fact, not every single consumer can be financed.”

“The action also relies on very old advertising that has not been in place for years,” the company said.

Becerra’s office said the company sells about 1,200 mostly used vehicles a month and that an untold number of buyers were deceived by false advertising or had their credit worthiness inflated on loan applications to fool lenders into providing money needed for a purchase.

“The practice of fraudulently inflating income was so common that defendants’ personnel even developed associated slang,” the lawsuit says. “For example, ‘packing income’ meant falsely increasing a customer’s reported income on a credit application, and packing income ‘by a nickel’ meant increasing a customer’s income by $500.”