Federal prosecutors Tuesday announced a $160,000 settlement of their lawsuit against San Clemente-based S&K Towing Inc. regarding the auctioning off of towed cars owned by military service members.
The U.S. Justice Department sued the company in March alleging that S&K Towing illegally sold or disposed of about 148 vehicles owned by service members, particularly ones stationed at Camp Pendleton.
The company’s contract with Camp Pendleton required a court order before selling or disposing of a vehicle by a service member, officials said.
“For far too long, tow companies have sold or disposed of servicemembers’ vehicles in violation of federal law,” Assistant Attorney General Harmeet Dhillon said. “This settlement sends a strong message that all towing companies must recognize servicemembers’ rights and take the necessary steps to comply with the (Servicemembers Civil Relief Act).”
According to the settlement agreement, S&K Towing neither admits nor denies the government’s allegations, but is providing $160,000 to compensate affected servicemembers.
The company is also in the process of shutting down its operations, but agreed to fully comply with the Servicemembers Civil Relief Act if it restarts a towing or vehicle storage business.