AG wants info from Whittaker's used car company

BECKLEY – West Virginia Attorney General Patrick Morrisey’s office is asking a Raleigh County judge to order a used car company owned by Powerball winner Jack Whittaker to comply with a subpoena.

Morrisey’s office filed a petition in Raleigh Circuit Court against Blackburn Pre-Owned Autos LLC “to appear in court to show cause why it should not be ordered to comply in full with the investigative subpoena issued by the Attorney General on April 4" and "why it should not be enjoined from selling motor vehicles to any person residing in West Virginia until such time as it fully complies with the subpoena.”

The petition says the AG’s office has received more than 40 consumer complaints against Blackburn since 2006.

“Blackburn resolved some of the complaints and for others, no satisfactory resolution was reached,” Assistant AG Doug Davis writes in the petition.

In five of the complaints from 2013, similar financing was used for vehicle purchases.

“Blackburn discloses that 0 percent interest is being charged for the loan,” the petition states. “Blackburn denies that it is hiding the true cost of credit in its selling price for these consumers.

“The Attorney General has probably cause to believe that Blackburn is hiding the true cost of the financing in the selling price of the vehicles.”

The petition says the AG’s office compared a few of the selling prices for vehicles by Blackburn to fair market value prices. One, a 2004 Subaru Forenza, sold for $6,990 while the fair market value was between $2,750 and $4,000. Another was for a 2002 Ford Explorer sold for the same $6,990 while the fair market value was listed at $4,600.

“Blackburn has not responded as to how or why a for-profit business would lend money for free,” the petition states. “It freely admits that its prices are usually higher than NADA or Kelly Blue Book values.”

In one response to the AG’s office for information, Blackburn said the Internal Revenue Service had some of the documents requested.

“Blackburn has refused to give any contact information for the Internal Revenue Service agent that has the documents and refuses to give consent to allow the Attorney General to contact the Internal Service to obtain the requested information,” the petition states.

Morrisey’s office asks the court to enter an order compelling Blackburn to produce all requested documents, an order forcing Blackburn to disclose the IRS contact information, an order enjoining Blackburn from selling cars in West Virginia until it complies or enjoining it from providing financing.

The AG’s office also seeks court costs, attorneys fees and other relief.

The case has been assigned to Circuit Judge Robert A. Burnside Jr. He has set a hearing for Oct. 16, and he ordered Blackburn to not extend credit to costumers.

Shady Spring attorney Amy Osgood is representing Blackburn.

Whittaker and his various companies – including Blackburn – have been the subject of other civil lawsuits.

In July, Paul Vin Properties Inc. filed a lawsuit against Whittaker, Whittaker LLC and Blackburn Pre-Owned Autos claims agents for Whittaker and his companies entered its property and “cut standing timber and removed approximately 4,000 cubic yards of dirt without permission or authorization.”

Earlier this year, an insurance company claimed Whittaker, Whittaker Equipment Inc., Diversified Enterprise Inc. and other individuals owe nearly $400,000 over an indemnity agreement related to various construction projects.

Also earlier this year, Whittaker was sued for allegedly failing to pay a $10,000 reward for a lost ring.

On Christmas 2002, Whittaker won a then-record $314 million Powerball drawing. He elected to take the cash option of $170.5 million cash, which resulted in a $113 million check after taxes.

Legal troubles began soon after that. In 2003, thieves broke into his car at a strip club in Cross Lanes and took a suitcase that held $545,000. In 2004, thieves again broke into his car and took about $200,000. That was later recovered.

He later was sued by Caesars in Atlantic City for bouncing $1.5 million worth of checks. He countersued, claiming he was supposed to have been credited due to a slot machine he developed.

In 2007, Whittaker claimed thieves had taken all of his money from 12 branches of City National Bank. He made that claim after failing to make payments to a woman who had sued him.

Raleigh Circuit Court case number 14-C-821