Fergus Falls dealership overcharged hundreds of Minnesota police agencies for vehicle extras
MOORHEAD — Law enforcement agencies are checking invoices and inspecting their vehicles following a report that a Fergus Falls auto dealership overbilled police agencies across Minnesota.
"We're in the process of looking even historically back at our orders," Lt. Tory Jacobson, a spokesman for the Moorhead Police Department, said Friday, April 28. "We've ordered cars from there many many times."
Clay County Sheriff Bill Bergquist said his agency is just starting the investigation as well, with plans to inspect vehicles on Monday.
Nelson Auto Center, which has a contract with the state to supply vehicles for all law enforcement agencies, discovered it overcharged those agencies by as much as $700,000 over the past five years, owner Brent Nelson said Friday.
The dealership informed the state as soon as it realized what had happened, he said, and he fired the fleet manager responsible. He confirmed a report this week by KARE 11, a Twin Cities TV station, that the Bureau of Criminal Apprehension has opened a criminal investigation into the matter, but he said it's aimed at the former manager.
Gerry Worner told the station through a lawyer that he "had no intent to defraud anyone."
KARE 11 said Nelson Auto charged extra for standard equipment that should've been included in the base price as specified in state contracts.
For example, Maplewood police SUVs should have engine block heaters, spotlights, heated mirrors and rear windows that don't roll down for no extra charge. Nelson Auto charged the city $79 extra for block heaters, $187 for spotlights, $53 for heated mirrors and $30 for deactivated rear windows, the station reported. Police found some SUVs didn't even have block heaters.
Nelson said he first became aware of the problem on April 3 when the city of Woodbury called inquiring about a refund for an overcharge for a squad car. He said he asked employees to see if other agencies were overcharged and, after they found that many had been, he informed the state.
On April 7, the dealership sent letters to about 230 customers to inform them they may be due for a refund.
Lt. Jacobson and Sheriff Bergquist said they hadn't seen a letter sent to either of their departments.
It's possible that not all the $700,000 will need to be refunded.
Nelson said about three-quarters of the amount are with the upgrades. The state contract is silent on whether a refund is due for standard equipment that's removed and replaced with upgraded equipment, he said, and he's working that out with the state.
The remaining quarter, however, are clear cases of overcharging where agencies paid extra for standard equipment.