Car dealership settles false claims allegations

Boston Statehouse

BOSTON (SHNS) – A car dealership company will pay $1 million to the state as part of a settlement over allegations that it improperly asked its furloughed employees to work without pay while receiving unemployment benefits.

Colonial Automotive Group, which operates 16 dealerships in Massachusetts, allegedly violated the state’s False Claims Act by furloughing most sales employees, encouraging them to seek jobless benefits, then asking them to continue to perform some job functions, Attorney General Maura Healey’s office announced Friday.

Healey’s office alleged that the company sold 366 cars in April and 455 cars in May that were attributed to furloughed employees who were collecting unemployment benefits.

“Colonial Automotive planned and carried out an illegal scheme to cheat our unemployment system and avoid paying its workers in order to maximize its profits during the COVID-19 crisis,” Healey said in a statement. “This is a brazen attempt at exploiting workers and the state’s unemployment system, and we will take action against those who defraud our state agencies and try to steal taxpayer dollars.”

The company will pay a $1 million penalty into the state’s general fund and enact policies to prevent any similar issues in the future, according to Healey’s office.

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