San Clemente Towing Company Agrees to $160,000 Vehicle Settlement
A San Clemente towing company agreed to fund a $160,000 settlement after federal prosecutors alleged it disposed of as many as 148 servicemembers’ vehicles.
A San Clemente towing company has agreed to fund a $160,000 federal civil-rights settlement after prosecutors alleged it sold, auctioned or otherwise disposed of as many as 148 vehicles belonging to servicemembers without first obtaining required court orders.
The Justice Department announced the settlement on July 14, 2026. The case involves S & K Towing Inc., which is headquartered in San Clemente and performed towing work under a contract connected to Marine Corps Base Camp Pendleton.
What prosecutors alleged
The federal complaint, filed March 25, 2026, alleged that the conduct occurred from August 28, 2020, through at least April 15, 2025. Federal officials said the company may have sold or otherwise disposed of vehicles belonging to servicemembers protected by the Servicemembers Civil Relief Act, or SCRA.
The allegations involved as many as 148 vehicles. The documents connect many of the vehicles to Camp Pendleton, but do not state that every vehicle was towed from the base.
The SCRA generally protects covered vehicles from being sold, auctioned or disposed of without a court order during a servicemember’s military service and for 90 days afterward. The protection can be important when military obligations affect a servicemember’s ability to respond to a repossession or storage issue.
How the settlement fund will work
The $160,000 is intended to compensate servicemembers whom the United States determines may have been harmed. It has not been distributed to individual vehicle owners. Under the agreement, the company must establish and fund an escrow account before federal officials complete the process of identifying eligible recipients and determining individual payments.
People who believe their vehicles may have been affected should not assume that every one of the 148 vehicles will qualify for compensation or that payments will be made immediately.
Company response and next steps
S & K Towing neither admits nor denies the allegations. The settlement agreement describes the company as being in the process of shutting down operations. The Los Angeles Times reported, based on court records, that the company disputed some allegations and said its Camp Pendleton contract did not reference the federal law.
The settlement also establishes compliance obligations if S & K Towing resumes towing or vehicle-storage operations. The civil claims are to be dismissed after the company completes its obligations under the agreement.
Servicemembers or dependents who believe their rights may have been violated can seek guidance through an Armed Forces Legal Assistance Program office. The case remains relevant in San Clemente and the Camp Pendleton area because it involves a local business, a military-base towing contract and a compensation process that could affect military personnel in the region.
Sources
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