This GOP Senate Hopeful’s Self-Made Story Has a Darker Side

Photo Illustration by Kelly Caminero / The Daily Beast / Reuters
Photo Illustration by Kelly Caminero / The Daily Beast / Reuters

As a leading Republican candidate for the highly competitive U.S. Senate race in Ohio, Bernie Moreno has leaned on his personal story as an immigrant from Colombia who built a national auto dealership empire.

But there’s been something missing from that story: Moreno’s falling-out with his longtime friend and business associate, Gabriel Despres, a man he once credited as central to his success.

According to previously unreported legal filings, Despres sued Moreno in 2015, alleging “unlawful and unscrupulous conduct in reneging on written and oral promises” Moreno made about the money Despres would make and the role he would have in their dealership group.

The core allegation from Despres was that Moreno scuttled an agreement entitling him to 10 percent of the net proceeds from the sale of any of his dealerships in exchange for Despres giving up a large share of his annual salary for Moreno to use as capital to expand the business.

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Despite the group’s success—and Moreno publicly saying Despres was the “yin to my yang”—Despres claimed he was pushed out by Moreno before the sale of any dealerships, not because of his performance but because his old friend did not want to pay him.

While Despres could not put an exact number on the amount of money he believes he lost as a result, his attorneys estimated it was in the millions.

“This case is about what turned out to be Moreno’s greed and duplicity towards the person who was most there for him from the beginning and who was instrumental to his own success,” Despres’ attorneys wrote in their initial complaint.

Over two years of legal proceedings, Judge Patricia A. Gaughan of the U.S. Court for the Northern District of Ohio indicated her skepticism of the expansive relief to which Despres argued he was entitled. She also sided with Moreno’s lawyers in dismissing claims that he had engaged in fraudulent activity or unjustly enriched himself, in addition to finding Moreno’s promise to Despres “too vague” to be enforced.

But by May 2017, the two parties settled the dispute out of court, averting a jury trial on the matter and any verdict on Moreno’s guilt or innocence.

“After the Judge dismissed the bulk of Gabe’s claims, Bernie decided to settle to avoid the further expense of trial,” said Moreno campaign spokesman Conor McGuinness, in response to questions from The Daily Beast. “The terms of the settlement are confidential, but Bernie was very pleased with the settlement.”

“I realize that lawyers like to sensationalize the claims they make because they think it will help their client, but the Despres case was really nothing more than a business dispute, which, like most business disputes, was eventually settled,” McGuiness continued.

In a statement of his own, Moreno said he hired Despres to work for him in Ohio—they moved together there from Massachusetts to start the business—“because he was a talented salesman.”

“Unfortunately, he went through some personal difficulties,” Moreno said. “Although I have not spoken to him since the lawsuit has been settled, my understanding is that he has resolved those difficulties. Everybody goes through hard times, I’m very sympathetic to that fact, and I wish him all the best.”

Despres did not respond to several emailed requests for comment. According to the legal filings, Despres endured a divorce during his work with Moreno and racked up considerable financial debt, for which Moreno loaned him money.

But Despres is not the only associate or employee to have taken legal action against Moreno.

Between 2015 and 2017, three lawsuits were filed against Moreno by employees at his Cleveland-area dealerships which alleged race, gender, and age discrimination, the Associated Press reported last month. A female employee with children, for instance, alleged that Moreno told her to “put your kids in fucking daycare” after she asked about flexibility in her work schedule. According to the AP, all three lawsuits were settled out of court.

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In 2017, Moreno was sued by two former employees at his Massachusetts dealership who claimed that he failed to pay them overtime wages, under a state law that mandates employers must compensate their workers for extra hours worked even if their pay structures are commission-based.

In 2020, while the case was ongoing, Moreno destroyed overtime pay records, earning a sanction from the Massachusetts judge who instructed jurors to assume the evidence was damaging to Moreno. Ultimately, he lost the case and was ordered to pay over $416,000 to the former employees. In the months before launching his 2024 Senate bid, Moreno settled more than a dozen similar lawsuits out of court, according to Business Insider.

In response to these reports, Moreno and his campaign have defended his integrity in business dealings, while often noting that several former employees who sued him are now supporting his campaign for Senate.

While the federal court may have found issue with Despres’ legal arguments, the fundamental content of the case and key pieces of evidence provided by the plaintiff complicate the feel-good story about Moreno’s rise that has featured so prominently in his biography.

Having never held elected or political office, Moreno’s brand as a “highly respected businessman”—as his chief supporter Donald Trump called him—is a core part of his appeal to Ohio voters.

Having won Trump’s endorsement and that of many Republicans, Moreno is perhaps the favorite to win the March 19 primary election, though he faces two well-known GOP rivals in Secretary of State Frank LaRose and state Sen. Matt Dolan. The winner will take on incumbent Sen. Sherrod Brown (D) in November, a contest that both parties are treating as essential to winning the Senate majority.

What sets Despres’ story apart from others who alleged unlawful or unfair behavior on Moreno’s part, however, is how personal the saga seemed to be.

Their relationship dated back to 1996, according to Despres’ complaint, when both men were working at a Mercedes-Benz dealership in Lynnfield, Massachusetts. In 2005, Moreno left Massachusetts for the Cleveland area, where he had just acquired a Mercedes-Benz dealership. He asked Despres to join him and help him build a formidable auto dealership group from the ground up.

To lure Despres away from Massachusetts, where he had just purchased a home with his wife and young children, Moreno offered to pay him a $52,000 annual salary and an annual incentive of 10 percent of the dealership’s net profit before taxes and after Moreno’s own annual salary of $300,000.

“You will be a key part of the beginning of what I know will be a very successful and significant organization,” Moreno wrote to his friend in a copy of the salary memo included in the lawsuit. “You will be challenged more than you have ever been challenged before. However, the rewards will be unlike what you have known or thought possible.”

After just a few months in operation, Mercedes-Benz of North Olmsted was already the top-performing Mercedes dealership in Ohio, earning a net profit of $500,000.

At the beginning of 2006, when Despres asked for his incentive payment—which would total around $50,000—Moreno made him another offer. If he deferred those incentive payments and allowed Moreno to invest the money in the business, Despres would be entitled to 10 percent of the profits from “any and all” dealerships upon their sale.

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According to Despres’ legal complaint, Moreno consistently said his plan was to ultimately sell their empire for a huge profit. In persuading Despres to defer his incentive payments, he allegedly said, “trust me, we can put the money into a new dealership, and we will both make even more money when we sell.”

Despres agreed to the deal, and in the following years, the group continued to expand, acquiring new dealerships and increasing their profits. In continuing to forgo the 10 percent incentive payment for each dealership’s profits, Despres claimed in the lawsuit that he “believes the amount” he would have been entitled to under that arrangement is “in the millions of dollars.”

On multiple occasions, Despres said Moreno reaffirmed the benefits he would ultimately win for deferring those payments. During a trip together to Moreno’s beach home in Key Largo, Florida, he allegedly dubbed it as the “10-15-50” plan: Despres would get 10 percent of the profits from the sale of the dealerships, in roughly 15 years, which would lead to a profit of at least $50 million.

Things grew complicated when Despres, going through a divorce in 2008, faced financial distress and turned to Moreno for money, which Moreno agreed to loan him—but only if Despres agreed to forgo his salary until the loan was repaid.

As the business rebounded and continued to expand, in 2011, Moreno wrote a speech celebrating Despres on his 40th birthday at a party attended by a number of the auto group’s employees. In those remarks, read by someone else because he could not attend, he cast Despres’ involvement as key to the company’s success and called out several key employees who would not have joined if not for Despres.

“Gabe’s role in understanding the vision we were trying to create was like lighter fluid on a fire,” Moreno’s speech read, according to Despres’ complaint. “He was the ying to my yang.”

While he was publicly praising Despres, Moreno “was planning to turn on Mr. Despres in an effort to avoid his commitment to him,” the lawsuit alleged. He began expressing disappointment with Despres’ performance at his dealership and, without asking him, transferred him to what was considered the most challenging dealership in the company, where Moreno allegedly took steps to make his job harder. Despres claimed it was a “set-up.”

In 2012, as their relationship deteriorated, according to the lawsuit, Moreno sent Despres an email offering him two choices. One was to accept a worse pay structure with “a warm embrace, get your head out of your ass, straighten out your financial affairs once and for all, and we move forward.”

The other was to leave the company, accept $250,000 from the sale of an Acura dealership, have his $100,000 debt to Moreno forgiven, and “part as friends.”

Later, during a deposition for the lawsuit, Moreno would admit that he was being a “schmuck” when he offered Despres $350,000 as a “way out” of his relationship to him, according to an order from the judge.

But Despres didn’t want to walk away from his vested interest in the company—which was far more valuable than $350,000—so he accepted the deal and remained on the team. Soon, however, he said he was unable to make his mortgage payments, and turned to Moreno again for a loan as he faced foreclosure.

Moreno agreed, but only if Despres signed what is called a cognovit promissory note, a binding agreement that would allow Moreno to collect on any debts swiftly and without Despres having any legal recourse to contest. He also took control of his friend’s finances and put him on a budget of $500 per week.

In emails provided as evidence in the trial, Despres was solicitous and apologetic as he sought Moreno’s help in alleviating his financial difficulties, acknowledging that he had been a poor manager of his books. In his responses, Moreno was blunt but not mean, admonishing Despres with some exasperation but calling him a “good guy.”

“As the court records show, Bernie went to great lengths to try to help Gabe, including loaning him several hundred thousand dollars,” said McGuinness, Moreno’s spokesman. “Unfortunately, issues outside of work ultimately outweighed his ability to do his job.”

In the end, Moreno gave Despres the choice to resign from the business or be fired. According to Despres, Moreno told him before he resigned that if he did anything to “piss off” his old boss, then he would come to collect on the cognovit notes.

It was not until 2016 that Moreno began selling off his collection of 15 car dealerships—which reported annual profits of over $1 billion—in order to focus on his new blockchain technology business. By 2022, he had sold them all, padding a net worth that likely totals in the hundreds of millions of dollars.

In March of 2015, after moving back to Massachusetts, Despres decided to sue Moreno.

The key allegations for Despres were that Moreno breached his contract with him and that he violated an obligation of promissory estoppel—the legal idea that a party is entitled to compensation if they can prove that someone made a significant promise to them, acted on reliance of that promise, and materially suffered for doing so.

In a November 2016 deposition, Despres’ ex-wife corroborated several of his claims about Moreno’s repeated affirmation of the 10-15-50 promises he made, according to legal filings.

But according to several opinion memos Gaughan issued, the judge was not convinced that Despres’ legal arguments and the evidence provided supported his aggressive claims for relief, which seemed to center on the idea he would be entitled to the annual incentives he gave up in exchange for a cut of any dealership sales.

In particular, Gaughan found that Moreno’s promise of 10 percent of the profits from the sale of any dealership was “too vague and indefinite to be enforceable” and did not constitute a binding agreement.

According to the legal docket for the case, a settlement conference was held in March 2017 between the plaintiff and defendant teams, during which they agreed on terms to avoid a trial. Days later, Gaughan dismissed the case “with prejudice,” meaning Despres could not refile the same claims in court again.

Given the secrecy around their settlement, it’s impossible to know exactly why the parties agreed or what the terms were. Like many defendants with financial resources and ambitions for power, Moreno may have decided that it was worth the money to put the matter to rest, even if he was confident in his case, so as to avoid a messy trial and potentially harmful or unflattering information that it might have unearthed.

Whatever the legal merits of the specific case, or what Despres could have done differently, his lawsuit made clear that if he regretted anything, it was trusting Moreno to treat him fairly.

“As Mr. Despres much later realized but did not recognize at the time,” his suit read, “Moreno was the kind of friend and business partner who willingly made promises of great rewards during the good times, but who disappeared when times were not so good.”

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