June 2, 1995 in Nation/World

Two Convicted In Honda Bribery Scandal

Washington Post
 

In one of the biggest bribery cases in U.S. corporate history, two former Honda executives were convicted Thursday of taking millions in payoffs to award dealerships and keep dealers supplied with hot-selling Acuras and Hondas.

Dennis R. Josleyn, the former West Coast Honda sales manager, and John W. Billmyer, a former senior vice president, were convicted in Concord, N.H., of taking cash and luxury items from dealers in 30 states in return for sought-after Honda cars and dealerships during the 1980s. At that time, Hondas were the yuppie car of choice and could bring thousands of dollars more than the sticker price, making a single dealership worth millions of dollars.

“This may be the biggest commercial fraud of its kind,” said Assistant U.S. Attorney Michael J. Connolly. “It involved about $50 million to 18 former employees, spanned 14 years and touched almost every state in the country.”

Both Josleyn and Billmyer were convicted of conspiracy following a three-month trial. Josleyn, 48, also was convicted of racketeering and mail fraud for skimming $3 million from Honda training and advertising programs, which he then shared with coconspirators. He faces up to 35 years in prison and fines and penalties of as much as $5 million when he is sentenced on Aug. 28. Billmyer, 65, faces up to five years in prison and $250,000 in fines for accepting bribes.

Lawyers for both men said they planned to appeal the convictions.

Billmyer, Josleyn and other Honda employees accepted bribes and kickbacks such as envelopes filled with cash, luxury automobiles, jewelry, art, home improvements, college tuition payments, swimming pools and interest-free loans, according to trial testimony.

Josleyn claimed Honda knew of and condoned the kickbacks. The company denied it.

Numerous witnesses testified that Honda’s top officials knew about the bribes and kickbacks. Auto market research expert J. David Power testified he informed Honda’s president and executive vice president in March 1983 that some company managers were accepting bribes to assign dealerships and to increase car allocations to certain areas. He said he told the executives at the request of about 40 Honda dealers who were concerned about the practices.

Former Honda executive Cecil Proulx testified he talked to Honda officials about kickbacks and was told by Japanese executives that the kickbacks were allowed because Honda paid its employees less than other automotive firms.

Jeffrey Smith, a spokesman for American Honda, said the convictions “close the book on a painful and difficult period in our history. The jury has found that the individuals … betrayed the trust of their fellow employees, deceived our company and abused our reputation. …”In addition, about 18 civil cases have been filed against American Honda by dealers or prospective dealers.

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