Lawsuits usually travel in one direction. Automakers get sued, over recalls, warranty disputes, franchise disagreements. The script practically writes itself. This time, somebody handed it back and said: not today. Stellantis Financial Services has filed suit against Sky Auto Mall, an Iowa dealership with locations in Newhall and Center Point, and its owners Igor, Yelena, and Alex Tovstanovsky.
The allegation? A multimillion-dollar inventory financing fraud built on a practice the industry calls “double flooring”. Which sounds almost elegant until you realize what it actually means.
Here’s how floorplan financing works. Dealerships borrow money to stock their lots, then repay those loans when the cars sell. Simple, functional, honest. In theory. Sky Auto Mall allegedly took that system and ran it through a photocopier. According to the complaint reported by KCRG, the dealership secured floorplan loans from Stellantis, then obtained additional loans on the same vehicles through other lenders, including Ford Motor Company.
The vehicles were allegedly shuffled between the two lots to keep the scheme from unraveling too quickly, while some cars were sold without repaying the original loans. Leaving roughly $1.4 million in proceeds unaccounted for.
Then there were the books. Two sets of them, Stellantis claims, one reflecting reality, one designed specifically to hide it from creditors. When the alleged fraud surfaced, dealership executives reportedly admitted to deceiving the financial arm of the automaker.
The total claimed, $12.3 million, not counting interest and fees. In a separate motion, Stellantis is also asking the court to authorize the seizure of vehicles, parts, and equipment tied to the financing contract. Assets that court documents suggest could exceed $20 million in value.
The case lands at a particularly awkward moment for traditional dealerships. Online car-buying platforms have been quietly eating away at the brick-and-mortar model for years, shifting more of the transaction digital and reducing the leverage dealers once held over the process. Fraud scandals don’t exactly help rebuild that trust.
