Former sales agents allege fraud in Vegas manufactured home sales

Grace Leong

Thursday, Nov. 9, 2000 | 11:24 a.m.

Six former sales agents of Champion Enterprises Inc. sued the Auburn Hills, Mich.-based manufactured housing retailer, two former managers and a lending firm, alleging they conspired to defraud the agents of their commissions and illegally used these funds to finance additional home loans.

The defendants include Whitworth Management Inc. doing business as Homes America; two former Las Vegas managers, Eugene and Shirley Walsh; Conseco Finance Vendor Services Corp. and a Conseco employee, Rene Wild. Homes America was acquired by Champion in 1998.

In a Clark County District Court lawsuit, the plaintiffs, who said they were terminated when they questioned Homes America about its business practices, accused the defendants of tax and commission fraud, conversion, negligent hiring, accounting and supervision, unjust enrichment, fraud and racketeering.

The plaintiffs, who claimed the Las Vegas dealership was one of the top performers among Homes America's 39 locations in the western United States, alleged Las Vegas sales agents "earned less commissions for higher sales volumes" than their counterparts at lesser performing dealerships.

The plaintiffs said many manufactured housing parks offer "spiff" checks or compensation to sales agents for introducing clients. They said spiff checks that were allegedly made payable to the agents were instead cashed by their managers.

The suit alleged Homes America failed to supervise the Las Vegas dealership by failing to detect "the unusually large turnover of sales agents under local management" and fraudulent practices including extorting the agents to turn over the spiff monies and forging their signatures.

The suit alleged Homes America then conspired with the lending firm, Conseco, and its employee, Wild, to use the spiff monies to make down payments for potential buyers who weren't able to satisfy minimum loan requirements.

Dick Breidenbach, president of Champion Enterprises' western retail division, denied the allegations.

"Spiffs aren't guaranteed to sales agents," he said. "These could become the property of the person who moves into the park. Spiffs are move-in incentives that could be paid to either consumers, the dealership or the sales agent. The commissions are based on the profit of the transaction. Volume doesn't determine profit."

"We have employee contracts that specify spiff checks in excess of $250 have to be shown to the management," Breidenbach said. "So far, we haven't received complaints from any ex-employees or the state labor board."

The suit also alleged Conseco and Wild were involved in a "complicated scheme of deception with respect to transactions known as Transfer of Equity Properties (TOEs)." These refer to deals in which buyers could pay an initial fee and then take over payments on a repossessed manufactured home.

The agents, who said they were entitled to receive commissions on each TOE sold, alleged Homes America concealed fees earned from completed TOE deals and defrauded the agents of their commissions by telling them these transactions had failed. Homes America also allegedly set an inflated TOE fee for the buyer and then split the monies with Conseco and Wild.

Conseco officials could not be reached for comment on the allegations.