Sage Group of Dealerships Sues Nissan Motor Co. for Alleged Fraud

Nissan Motor Co. and two of its subsidiaries are in legal hot water. Prior to the holidays, a complaint was filed by Byron Moldo, a court-appointed receiver, on behalf of the Sage Group of auto dealerships. Trophy Automotive Group LLC is named in the lawsuit, as well.

Saudi billionaire Khaled al-Juffali, who is a business partner of Water, was named in a breach-of-trust indictment against former Nissan CEO, Carlos Ghosn. Ghosn was, of course, accused of criminal financial misconduct and arrested in Japan in 2018. Both Ghosn and Juffali deny any wrongdoing.

Sage Group, which was founded in 1969, operated four dealerships in Southern California. That is, until the brand sold two of its stores to Trophy Automotive – a company owned by Nasser Water.

According to Sage Group’s legal counsel, Miller Barondess LLP: “Al-Juffali and Watar unfairly benefited in the United States from the fraudulent actions of two other Nissan subsidiaries – Nissan North America and its dealer financing arm, Nissan Motor Acceptance Corp. – which conspired to financially bleed Sage Group’s dealerships and force a fire-sale to Ghosn’s cronies at Trophy Automotive.”  

In essence, the lawsuit alleges that Nissan and two of its subsidiaries cut off Sage Groups’ access to inventory. The automaker then encouraged Sage Group to sell two of its dealerships to Trophy Automotive – without revealing a preexisting relationship between Nissan and Trophy. 

Additionally, the lawsuit claims Nissan wrongfully withheld $3 million from Sage Group. And as a result, the company was forced to sell its two remaining dealerships to another Nissan dealer for $0 in franchise value.

According to Automotive News, a spokesman from Nissan said the Japanese automaker does not comment on pending litigation.