Auto Group With 2 Medford Locations Exploited MA Unemployment: AG

MEDFORD, MA — An automotive group with two outlets in Medford agreed to pay $1 million to settle claims it took state unemployment benefits during the COVID-19 pandemic, Attorney General Maura Healey announced last week.

Colonial Automotive Group has 16 car dealerships throughout the state and all showrooms were ordered closed throughout the state due to the COVID-19 pandemic. The company furloughed employees, encouraged them to apply for unemployment benefits and then requested that those employees continue to work without pay, Healey said.

"Colonial Automotive planned and carried out an illegal scheme to cheat our unemployment system and avoid paying its workers in order to maximize its profits during the COVID-19 crisis,” AG Healey said. "This is a brazen attempt at exploiting workers and the state’s unemployment system, and we will take action against those who defraud our state agencies and try to steal taxpayer dollars."

The group's dealerships include Colonial Nissan of Medford and Colonial Volkswagen of Medford.

The AG's office alleges that in the months following the state-ordered closure of the dealership’s showrooms, the company sold approximately 366 cars in April and approximately 455 cars in May that were attributed to employees who were on furlough and collecting unemployment benefits at the time of the sales.

Colonial's 16 car dealerships include:

• Colonial Cadillac of Woburn
• Colonial Chevrolet of Acton
• Colonial South Chevrolet Dartmouth
• Colonial West Chevrolet Fitchburg
• Colonial Chrysler Jeep Dodge Ram Hudson
• Colonial South Jeep Dodge Ram Dartmouth
• Colonial Ford of Plymouth
• Colonial Ford of Marlborough
• Colonial Honda of Dartmouth
• North End Mazda of Lunenburg
• Colonial Nissan of Medford
• Cityside Subaru of Belmont
• North End Subaru of Lunenburg
• Colonial Volkswagen of Westborough
• Colonial Volkswagen of Medford
• Wellesley Volkswagen

The $1 million payment will go to the state's general fund. Colonial will have to enact policies and procedures to ensure that furloughed employees do not perform any functions related to their job or Colonial's business and, in any instance where furloughed employees do perform these duties, the company will compensate them in accordance with state employment regulations.

Story by Samantha Mercado (Patch Staff)