Ernest Garcia II

Ernest García II (born May 1, 1957) is an American billionaire businessman, in the used car sector. He is the owner of DriveTime (originally named UglyDuckling), and a major shareholder of Carvana. In 1990 he pled guilty to a felony bank fraud charge for his role in the Lincoln Savings and Loan Association collapse. As of April 2022, his net worth was estimated at US$7.2 billion.[1]

Ernest García II
Born (1957-05-01) May 1, 1957
NationalityAmerican
EducationUniversity of Arizona
OccupationBusinessman
Known forChairman and owner, DriveTime
SpouseMarried
ChildrenErnest Garcia III

Early life

Ernest García II was born May 1, 1957,[2] the son of Ernest Garcia, who co-owned a liquor store with Frank Colaianni, and was once the mayor of Gallup, New Mexico.[3] He dropped out, but eventually earned a bachelor's degree from the University of Arizona.[3]

Career

In October 1990, García, then a Tucson-based real estate developer pleaded guilty to a felony bank fraud charge for his role as a straw borrower in the collapse of Charles Keating's Lincoln Savings and Loan Association.[4][5] Garcia "fraudulently obtained a $30-million line of credit in a series of transactions that also helped Lincoln hide its ownership in risky desert Arizona land from regulators."[4] Garcia spent three years on probation, and he and his firm filed for bankruptcy.[5]

In 1991, García bought Ugly Duckling, a bankrupt rent-a-car franchise, for under $1 million and merged it with his own fledgling finance company, and turned it into a company selling and financing used cars for sub-prime buyers with poor credit history.[5] Garcia took the company public on the NASDAQ exchange in 1996, trading under the ticker "UGLY".[6] In 1999, Garcia was involved in six lawsuits alleging he had "abused his position to profit" from a real estate deal where he ultimately acquired 17 company properties at a 10% discount.[5] In 2002, Garcia and the former Ugly Duckling CEO, Gregory Sullivan, took the company private and renamed it DriveTime.[7]

As of April 2021, García's net worth is estimated at $15.9 billion.[8]

It was announced in September 2021 that Garcia had sold more than $3.6 billion of Carvana stock since the previous October, which amounted to 16% of his holdings in the company.[9]

Personal life

He is married, and lives in Tempe, Arizona.[1] His son, Ernest Garcia III, is CEO of Carvana.[3]

Garcia owns an apartment in New York's Trump Tower.[3]

References
  1. "Forbes profile: Ernest Garcia II". Forbes. Retrieved 14 July 2021.
  2. "Bloomberg Billionaires Index". Bloomberg.com. Retrieved 2020-12-02.
  3. Vardi, Nathan. "How An Ex-Con Became A Billionaire From Used Cars". Forbes. Retrieved 9 January 2018.
  4. GRANELLI, JAMES S. (31 October 1990). "Lincoln S&L Figure Pleads Guilty to Fraud : Crime: Ernest C. García II admits acting to help the thrift hide its ownership of some risky desert land in Arizona". Los Angeles Times. Retrieved 9 January 2018 – via LA Times.
  5. Vardi, Nathan. "Feathered Nest". Forbes. Retrieved 9 January 2018.
  6. Services, Larry BaumanDow Jones News (1996-06-19). "Small Stocks Fall Sharply, Hurt by Technology Sector". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-04-30.
  7. "DriveTime car chain coming to Denver". Denver Business Journal. January 31, 2007.
  8. "Ernest García, II". Forbes. Retrieved 2021-07-14.
  9. Foldy, Ben (2021-09-17). "WSJ News Exclusive | CEO's Father Gets a $3.6 Billion Stock Windfall at Carvana". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-09-17.
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