North Country Car Dealer Sued Over Dubious Business Practices

Attorney General Spitzer today announced he has filed a lawsuit against a Jefferson County used car dealer seeking thousands of dollars in refunds for customers duped into buying vehicles without a title.

The lawsuit filed in Jefferson County State Supreme Court alleges that Sterling Auto, Inc. and its owner, Larry J. Gotham, Jr. have repeatedly and persistently sold vehicles without having title, leaving the purchasing consumer unable to get his or her car registered with the State Department of Motor Vehicles.

Sterling Auto also is accused of failing to pay off loans on trade-in vehicles, leaving consumers with car payments on both their newly-purchased vehicle and on their trade-in. When the trade-in vehicle was resold, it then left the new owners with title problems as well.

"Auto problems consistently top my office's list of consumer complaints," Spitzer said. "We are committed to monitoring this industry carefully to protect consumers' rights and uphold fair business practices."

Sterling Auto routinely failed to pay its "floor plan companies" - those firms providing financing to Sterling Auto - when vehicles were purchased, which, in one case, resulted in the vehicle's repossession from the consumer.

When Sterling Auto closed its business operations in May of this year, it left many consumers in the lurch. For example, one customer was ticketed for driving an unregistered vehicle because his temporary registration had expired and Sterling Auto had been, at first unresponsive in resolving the title problem, and then had closed down.

Spitzer's lawsuit is seeking restitution and damages for Sterling Auto's customers, civil penalties for its violations of the State Vehicle and Traffic Law and the Uniform Commercial Code, and court costs. The suit also requests that the court permanently bar Gotham from further victimizing consumers through his deceptive and fraudulent business practices.

Nearly 50 consumers, including many soldiers from nearby Fort Drum, have come to Spitzer's office complaining about Sterling Auto and requesting assistance. The State Department of Motor Vehicles has received approximately 80 complaints as well.

This case is being handled by James O'Rourke, Assistant Attorney General In Charge of the Watertown Regional Office and Assistant Attorney General Mark Fleischer of the Consumer Frauds and Protection Bureau.

Individuals who want to file a complaint against Sterling Auto are encouraged to contact the Attorney General's consumer help line at (800) 771-7755.