By 2006-2007, the dealership had grown from its mom-and-pop roots to selling 1,400 motorcycles a year and generating $32 million in revenue.
Riverside had been a boom market as more and more workers were priced out of coastal communities. But the recession hit the area particularly hard; Riverside is next to San Bernardino, which earlier this summer declared bankruptcy.
Dabney’s opinion of Veik’s management began to change at this point, court documents assert. He began to meet with Veik frequently, but he and other family members with ownership interest were dissatisfied with Veik’s performance.
Late in 2010, Dabney split the GM role into two positions; one he filled himself, the other was bestowed on then-senior operations manager Glen Espinoza. Veik moved to become GM of the smaller Salinas store, in which he and Dabney each had a 25 percent interest.
Meanwhile, the dealership continued to earn Bar & Shield awards. In the January 2012 Dealer Retail Excellence Report, Fordyce ranked 86th of 678 dealerships nationwide in new vehicle unit retail sales and 68th of 681 in new vehicle net sales.
EXPORTING BIKES? The allegations against Riverside were the result of an April 2011 audit that Harley-Davidson conducted after comparing sales records to National Insurance Crime Bureau records.
“In 2008 Harley-Davidson became concerned about the level of exporting activity resulting from the decline in the value of the dollar with respect to other currencies. Because of the proximity of West Coast dealers to ports, the company alerted them to be watchful for transactions that might be prohibited export sales under the NRSP,” the judge wrote.
The audit was undertaken after district manager Jim Sorenson received a tip while visiting another dealer.
“Sorenson discovered the possible exports when an exporter was at an authorized San Diego dealership and informed him that Skip Fordyce had sold exporters motorcycles,” according to Riverside H-D’s pleadings. Sorenson confronted Veik but never mentioned that franchise termination was a potential penalty for violating the NRSP, the documents state.
The audit revealed that during 2009 and 2010, the dealership sold 17 bikes to An Toan Trung, all of which were sent to Vietnam. Another eight were sold to Vu Hoang Le, and half of those were sent to Vietnam. Four were sold to Michel Kordas and shipped to Tahiti, and four more to Svenning Juhl, who sent them to Denmark.
Veik testified in the termination case that he knew the sales violated the NRSP, saying, “I was aware of it. I sanctioned them and I took steps to hide them.” At one point, he even made employees sign statements saying they understood and abided by the NRSP. He also acted as a gatekeeper between Dabney and lower-level employees, he said.
Until the audit, Dabney was unaware of the possible NRSP violations, his attorneys argued. Only after the audit did he learn that Veith was putting fake names into the F&I log and delivering bikes when he knew Dabney would not be at the store. He later blamed another former employee.
“Veik obtained random names and addresses from various dealership employees, including information from those in the business office who had no knowledge of the sales process. Veik would then have those names transferred to the SWR forms to conceal the fact that motorcycles were sold to individuals who intended to export the vehicles, or he would change the customers’ name in internal sales logs to conceal the transactions,” according to Riverside H-D’s proposed findings of fact. “Veik created illusory internal policies to shift blame to lower level dealership employees if violations were ever discovered.”
The last disputed sale was recorded in August 2010, after Veik had moved to the Salinas store, although the sale had actually taken place months earlier.
“Veik was working at the [Salinas] dealership by the time Harley-Davidson delivered the termination notice and audit results. In a narrative prepared for Jay to send to the company, Veik claimed that the sales had been made by a former Riverside sales manager, Darin Goodrich, who had been terminated several months before. He did this because, at the time, he was negotiating a deal to purchase a 51 percent interest in the [Salinas] dealership, and he wanted to maintain his good standing with Harley-Davidson, which would have to approve the change of ownership. He now admits that the narrative was totally false,” the judge wrote. (story continues)