Their lawsuit alleges that defendants Auto Fare Inc., Southeastern Auto Corp. and Zudhi A. Saadeh violated federal law by intentionally targeting black customers for unfair and predatory sale terms.
Prosecutors also said Saadeh has used racial slurs to refer to blacks and made statements saying blacks have fewer credit options, making them more likely to accept the predatory contracts.
The complaint also alleges that the defendants failed to provide customers with a reasonable notice of repossession, repossessed vehicles from customers who were not in default and failed to give customers refunds they were due.
Officials also say the dealerships improperly seized customers' personal property in repossessed vehicles and used global positioning system devices to locate and repossess vehicles without telling customers that the devices had been installed.
An attorney for Saddeh said Monday her client denies the allegations.
"It is outrageous that the Department of Justice seems to suggest that just because Mr. Saadeh's businesses are located in an African American community that they should be subject to a higher scrutiny than a business in a non-African American community,'' attorney Kathleen K. Lucchesi said in a statement. "As a minority business owner himself, Mr. Saadeh is very aware of the harm discrimination can cause. We believe this to be a case of overstepping by the DOJ and Mr. Saadeh intends to vigorously fight these meritless claims.''