PLANO, TX - David Stephens, a former regent for Midwestern State University, has been sued by Jaguar Land Rover of North America for his role in what Jaguar claims was a $6 million fraud scheme.

Stephens was an MSU regent until 2006. He is also former owner of Falls Lincoln-Mercury in Wichita Falls. He later operated a Jaguar dealership in Plano.

Stephens, once named Business Person of the Year by the Wichita Falls Board of Commerce and Industry, commuted from Plano to Wichita Falls for meetings of the board of regents.

The suit, which was filed in U.S. District Court in Sherman, alleges Stephens, his general manager and other employees had been bilking Jaguar of North America by submitting claims for unnecessary repair work or work that was done improperly - or not at all.

The complaint claimed the defendants attempted to conceal the fraud by fabricating documents.

When a new Jaguar is purchased, it is covered by a limited warranty for four years or 50,000 miles, whichever is shorter. During that time, the cost of all labor and parts necessary for repairs is borne by Jaguar.

Jaguar does not verify that each claimed repair was necessary and completed or that the repair parts were used, since there are so many of them.

The suit alleges Millennium managers generated warranty repairs at a pace that would not overwhelm Jaguar's national index of average costs so they would not trigger an audit and hired an outside consultant to monitor the dealership's warranty statistics against the Jaguar index. To pay for the consultant, the suit claims the dealership took 50 cents an hour out of its technicians’ paychecks.

Technicians were also charged for any rejected warranty claims, the suit alleges.

To boost profits, the dealership directed technicians to get "every dollar" they could out of each Jaguar.

The suit alleges Millennium management also falsified customer satisfaction surveys.

This artificially inflated the dealership's scores to qualify it to win awards, which earned Stephens $70,000 in travel to San Francisco, Napa, Spain and Buenos Aires.

According to the suit, a former technician reported fake warranty claims to Jaguar.

Other former employees corroborated the claims, the suit claims.