Keech Dealership Closed, Accused Of Falsifying Records

December 08, 1991|By Erik Nelson | Erik Nelson,Staff writer

When employees of Rea Keech Buick in Ellicott City arrived for work Wednesday, they were greeted by sheriff's deputies and bad news.

The deputies arrived at 7 a.m. to close Rea Keech after Mellon Bank filed court papers charging the dealership with falsifying records to avoid paying on $2.75 million in debt.

Officers stayed two days, taking inventory and collecting records.

"It's the biggest judgment seizure we've ever done," said Sheriff Michael A. Chiuchiolo.

The deputies impounded more than 140 vehicles and ordered banks to freeze the dealership's accounts pending a court decision on a $3.5 million lawsuit brought by Pittsburgh-based Mellon Bank Nov. 25. About 50 Keech employees are out of work.

Mellon financed Keech's auto sales, allowing General Motors to withdraw money from a $3 million line of credit whenever it shipped cars to the dealership. Keech was to repay the money as it sold the cars.

Inits suit, Mellon accuses Keech of selling about 70 cars, bought with$1.2 million in advances from the bank, without forwarding the proceeds of those sales to the bank. The bank also charges that owner Rea H. Keech Jr. or his daughter Leslie, manager of the dealership, showed a bank loan officer false contracts of sale or promissory notes for31 cars that were actually sold to other auto dealers for cash.

"Keech has now either concealed or destroyed those false documents," says the affidavit of Thomas P. Hanley, a Mellon commercial loan officer."

Contacted at his Arbutus home, Rea Keech Jr. refused to comment on the case other than to say he hoped he could regain possession of his business. "It's in my attorney's hands," he said. "I don't know what I can do."

Action against Rea Keech began Tuesday when deputies delivered court orders freezing the dealership's bank accounts. On Wednesday, the deputies and Mellon Bank officers arrived. A supervisor and three deputies were assisted by about seven Mellon Bank employees in securing and cataloging automobiles, parts, furniture, records and other business property, Chiuchiolo said.

"Sad thing is you've got all those employees you've got to send home," he added. "Theykept coming in" as deputies changed the locks and moved vehicles on display behind a chain-link fence in back of the business, he said.

They were all told of the court order prohibiting any Keech employee from entering the property or conducting any business on behalf of the company.

"It's a rough thing, particularly at this time of year, when you have to do something like that. You really feel bad for those employees," Chiuchiolo said.

Once the property is cataloged, it will be turned over to the court, which must decide what to do with it. J. T. Tuskan, spokesman for Mellon, said it was too early to say what the bank would ask the court to do with Keech's assets.

"Weare reviewing our options and continue our negotiations (with Keech)," he said. "But we intend to continue with our lawsuit."

Tuskan said the bank has helped people recover their cars from Keech's service department.

Since the dealership closed, the county's Office of Consumer Affairs has received several telephone calls from Keech custom ers. They had cars in for service, parts on order, put deposits oncars but had not taken delivery or had titling problems, said Lynn Gregg, the office's acting administrator. Anyone with similar problemsshould call the office at 313-7220, Gregg said.

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