FAIRFIELD, Calif. (KGO) -- We first told you last Friday about a Bay Area chain of auto dealers that suddenly closed its doors, and now we are learning more about why it happened.
When Momentum Auto Group suddenly closed eight of its dealerships, customers and employees were left scratching their heads. Now, recently unsealed court records reveal that the dealership had some serious financial trouble, and is the subject of an Department of Motor Vehicles investigation.
The Momentum Auto Group consists of nine dealerships. As of Monday night, it appears eight of them closed without warning in Fairfield and Vallejo.
RELATED: Eighth auto dealership closed in Fairfield and Vallejo
DMV spokesman Artemio Armenta gave 7 On Your Side a statement saying in part, "The DMV Investigations Division currently has an open and ongoing investigation on the Momentum Auto Group."
As of Tuesday, Momentum Chevrolet in San Jose says it is still open, but customers at those other dealerships are now wondering what happened?
"I'm very angry. I'm very angry how I was treated," customer Denise Claibourn said.
A recently unsealed federal case may now shed some light on the financial trouble the dealership group was in.
According to a Securities and Exchange Commission complaint, Momentum has roughly $40 million worth of loans from a South Florida company called 1st Global Capital.
1st Global Capital "promised investors a high return, low-risk investment in which 1st Global would use investor money to make short-term cash advances...to businesses that could not obtain more traditional financing such as bank loans."
In the complaint, The SEC accuses 1st Global Capital of fraud, in a scheme, "...that victimized thousands of investors nationwide, many of whom used their retirement savings to invest."
According to the deposition of a 1st Global employee, Momentum started taking loans from 1st Global in October 2017, taking "...a series of advances..." The employee said, "...that raised red flags..." with investors lending money.
1st Global did not answer our calls.
Momentum isn't accused of any wrong doing and declined our repeated requests for comment.
The dealerships president is Rahim Hassanally who was profiled by Autonews in its 40 under 40 article in 2013.
In 2017 the California Consumer Motor Vehicle Recovery Corporation lists Hassanally as a board member.
RELATED: 7 auto dealerships close without explanation in Fairfield, Vallejo
The legislature created the CMVRC which pays consumers who suffer losses when a dealership closes.
The website debanked is reporting that 1st Global and Momentum Auto Group had entered into an exclusive agreement to sell the dealerships in July-- but cited court records show that one of the Momentum's creditors was granted a temporary restraining order, prohibiting the sale of the dealerships on November 14 - two days before the dealerships suddenly shut down.
The DMV told us consumers can file Report of Complaint using this link INV 172A,with the DMV's Investigations Vallejo District Office if they have purchased a vehicle recently and not received their registration, or if they have any other concerns regarding a recent purchase of a vehicle.
Several automakers have offered to assist customers with their questions and concerns about the closures.
Infiniti Fiat Chrysler
INFINITI of Fairfield closed as of November 16. This was an independent retailer and the decision was made by Momentum Auto Group without consultation. We regret any inconvenience this causes customers normally served by this retailer and INFINITI will be working to provide referrals to other INFINITI retailers for sales, service and parts needs. We would ask our loyal customers in the area to contact our Consumer Affairs team at 800-662-6200 for questions and additional information.
"Fiat Chrysler Automobiles is working with customers following the unexpected closures of the Momentum Chrysler, Dodge, Jeep and Ram dealerships in Fairfield and Vallejo. While FCA was not involved in the decision to close the dealerships, the company is taking necessary steps to facilitate the return of vehicles awaiting service to their rightful owners. FCA encourages customers with questions to call the toll free number at 800-992-1997. FCA maintains a strong network of more than 2,600 dealers in the U.S. and has no intention of leaving the Fairfield and Vallejo markets."
Customers can contact the Hyundai Customer Care Center at (800) 633-5151 or email@example.com with any questions and to make arrangements to be accommodated by another Hyundai dealer in the area.
1 (888) 648-7820
1 (800) 647-7261
1 (800) 822-8987
1 (800) 333-4542
Take a look at more stories and videos by Michael Finney and the 7 On Your Side team here.
SEC lawsuit reveals Momentum Auto Group's financial problems