An eastern Iowa auto dealership has laid off 76 workers within days after a lawsuit was filed alleging the company engaged in loan fraud.

Sky Chevrolet LLC, located in Newall, laid off 30 workers, and Sky Auto Mall LLC in Center Point, 46 workers, according to notices posted on Iowa’s Worker Adjustment and Retraining Notification, or WARN, website.

Earlier this month, Texas-based Stellantis Financial Services filed a lawsuit in Linn County District Court alleging the dealership and its owners – Alex Tovstanovsky of Buffalo Grove, Ill., and Igor and Yelena Tovstanovsky of Naperville, Ill. – engaged in fraud against Stellantis and Sky’s other creditors by taking out loans from multiple lenders for the same vehicle.

The lawsuit described the fraud as “serious and intentional.”

In November 2023, Stellantis loaned the owners of the Sky dealerships money in which to buy inventory for its new and used vehicle lot in Center Point, according to the lawsuit. The dealership owners were required to repay the loan from proceeds of vehicle sales. The dealership owners have “failed and refused” to repay the debt, the lawsuit alleges.

Instead, dealership owners sold vehicles without repaying the debt with Stellantis and have financed vehicle purchases with more than one lender, the lawsuit states. The lawsuit also alleges that the dealership owners maintained “multiple” sets of accounting records, including “one that reflected the reality of the fraud that that Sky was perpetrating, and one that reflected a distorted reality in which [Stellantis] was” the only company financing purchases.

The dealership has kept over $1.4 million in sales proceeds Stellantis believes it is entitled to, the lawsuit said. In total, the dealership’s owners owe Stellantis more than $12.3 million.

A hearing is scheduled for March 20 in Linn County District Court.

A copy of the lawsuit can be found here.