Car Dealer Pays $1 Million to Settle Allegations It Improperly Took Advantage of Unemployment Insurance

  • Massachusetts AG Maura Healey reached a settlement with car dealer Colonial Automotive Group, Inc. (“Colonial”) to resolve allegations that it improperly took advantage of the state’s unemployment benefits in violation of the Massachusetts False Claims Act.
  • According to the AG’s office, Colonial furloughed the majority of its sales employees in its car dealerships during the COVID-19 shutdown, then encouraged its furloughed employees to apply for unemployment benefits and directed these employees to perform various job duties without pay. Colonial also allegedly continued to sell hundreds of cars through the unpaid work of these employees.
  • Under the terms of the assurance of discontinuance, Colonial agreed to pay $1 million in penalties to the state and amend any inaccuracies in its employment and wage reports already filed with the Department of Unemployment Assistance. Colonial will also enact policies and procedures to ensure that furloughed employees do not perform any functions related to their jobs without pay consistent with state employment regulations.