This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

Federal prosecutors reached a proposed $80,000 settlement Wednesday with a city of Orange-based auto lender accused of illegally repossessing the cars of two U.S. Army soldiers just after they reported for active duty, authorities said.

The court-enforceable consent order requires California Auto Finance, as well as a related company called Generation Inc., to pay $30,000 in compensation to a U.S. Army Specialist, as well as a $50,000 fine to the government, U.S. Attorney’s Office spokesman Thom Mrozek said in a written statement. The settlement must still be approved by a federal judge before taking effect.

Military members are protected by the Servicemembers Civil Relief Act, which requires court review of civil actions such as vehicle repossession for those who took out loans and made payments prior to entering military service, officials said.

The U.S. Justice Department sued the subprime auto lender in March of 2018, alleging it had repossessed the car of U.S. Army Pte. Andrea Starks, according to Mrozek. She notified the company in April of 2016 that she would be entering the military the following month.

“Despite this advanced notice, California auto Finance repossessed Private Starks’ vehicle without a court order on May 9, 2016, her first day of military training duty at Fort Leonard Wood, Missouri,” Mrozek said.

Investigators also learned of a second similar instance involving U.S. Army Spc. Omar Martinez, officials said.

He also informed the company he would be entering the military and would have limited means of communication while in basic training, prosecutors said.

“Nonetheless, California Auto Finance repossessed Specialist Martinez’s vehicle during his first month of military service,” Mrozek said. “The repossession severely damaged Specialist Martinez’s credit.”

Martinez deployed to Afghanistan in March through November of  2018, officials said.

In addition to paying Martinez $30,000, which would be the largest amount ever recovered by the DOJ for a single service member in an auto repossession case, the settlement calls for California Auto Care to pay a $50,000 civil penalty, help Martinez repair his credit and take steps to make sure the company does not impound the vehicle’s of military members without court orders in the future, authorities said.

Those who volunteer to serve in the armed forces “make an enormous sacrifice for us all,” U.S Attorney Nick Hanna said.

“We have a legal and moral duty to safeguard the rights of our men and women in uniform,” he said. “California Auto Finance failed to uphold this duty through its repossession practices. Today’s consent order demonstrates that we will tolerate no abuses of our servicemembers’ rights in our district.”

The DOJ plans to continue to “vigorously” go after companies that take advantage of military members, Assistant Attorney General Eric Dreiband of the DOJ’s Civil Rights Division said.

“Servicemembers who are going through basic training or another kind military service should not have to worry that their cars will be repossessed with no court supervision during the time of service to our country,” he said.

Servicemembers or their dependents who believe their rights under the SCRA have been violated are urged to contact the nearest Armed Forces Legal Assistance Program Office. A list of offices is available online at