Attorneys for the former owners of LoneStar Cleburne Autoplex are awaiting an appeal decision from the Tenth Court of Appeals in Waco before they can move forward with their case that alleges conversion, theft, conspiracy and other charges against former LoneStar employees Robert Wade Russell and Robert Christian Hansen in addition to Alliance Auto Auction of Dallas.
LoneStar has since sold and the dealership is now named SouthWest Chrysler Dodge Jeep Ram. The new owners are not connected to the case.
The case, filed in the 18th District Court, alleges that actions by the three resulted in more than $2 million worth of damage to LoneStar.
“Alliance filed a motion to compel arbitration and wanted to have the matter arbitrated in Birmingham, Alabama,” said Scott Cain, attorney for LoneStar. “[18th District Judge Sydney Hewlett] denied their motion and now they’ve appealed that to Waco.”
Russell previously worked as general manager for LoneStar and Hansen previously worked as its sales manager.
Both, according to LoneStar’s case filing, worked in tandem to embezzle money from LoneStar.
“Russell and Hansen pocketed cash down payments, created fake rebate accounts, created false invoices, forged signatures, inflated or undervalued trade-in vehicles and generally cooked the books,” according to the filing.
Such events occurred for more than a year, according to the filing.
“Russell and Hansen isolated LoneStar’s owners by threatening employees if they communicated with the owners, taking control of cash and operating outside the normal course of business for LoneStar,” according to the filing.
During that same time Russell and Hansen allegedly began sending all used cars for auction through Alliance ceasing LoneStar’s normal practice of sending such cars to multiple dealers and auction companies.
Alliance employed bribes and kickbacks and “lavished” Russell and Hansen with expensive meals and gifts, according to the filing.
Russell became the sole contact with Alliance, according to the filing, a practice outside the “normal and customary” dealings between dealerships and auction houses.
“Russell would hide vehicles at Alliance and would authorize the sale of vehicles at a loss at a rate that was not consistent with normal industry standards,” according to the filing.
Russell and Hansen wrongfully acquired and/or exercised dominion over property rightfully belonging to LoneStar, according to the filing, and both stole cash and vehicles from the dealership.
“They both breached their fiduciary duty owed to LoneStar by diverting cash to themselves that belonged to LoneStar and by causing millions of dollars in damage in attempting to cover up their actions,” according to the filing.
Russell and Hansen both knowingly participated in each other’s breaches of fiduciary duty and Alliance knowingly participated in the couple’s breaches of duty to LoneStar.
“All of the defendants knew or should have known that Russell and Hansen’s conduct constituted various torts and wrongful acts against LoneStar,” according to the filing. “With the intent to assist Russell and Hansen, all of the defendants in their wrongful acts substantially assisted and encouraged Russell and Hansen before and after the acts in engaging in the wrongful acts and in attempting to cover up the acts.
“The aiding and abetting was a substantial factor in causing the damages suffered by LoneStar.
LoneStar alleges that Russell and Hansen are also guilty of unjust enrichment, negligence and breach of contract against the dealership.
Cleburne police at 4:30 p.m. May 28 arrested Russell in the 1600 block of Tennyson Lane on a charge of theft more than $30,000 less than $150,000. Johnson County Precinct 3 Justice of the Peace Judge Pat Jacobs set Russell’s bond at $75,000.
Cleburne police have so far refused to release Russell’s arrest report.