WARWICK — Thomas A. Palangio, a former Providence state representative and Bruce W. Rogers, a former East Providence councilman who also served as mayor, were both hauled into District Court in handcuffs Tuesday after state police accused the men of conspiring to collect illegal fees from customers of a used-car dealership in Providence.

The two former officials stood next to a third defendant, Anthony J. Pate, during the trio’s appearance before Magistrate J. Patrick O’Neill. The men are accused of participating in a conspiracy that levied more than $150,000 in illegal fees on 31 customers who bought cars through a program at Douglas Auto Sales on Douglas Avenue in Providence.

The state police say that the illegal fees included a so-called “warranty fee” for a warranty that was already included in the cost of the vehicle and an “insurance cap fee” (gap insurance) that the dealership was not allowed to charge because it did not have a license to sell auto insurance.

Investigators say the dealership also overcharged consumers with a "document preparation fee" covering costs related to the sale and registration of the vehicles, according to authorities.

The state police investigation sprang from Pate’s efforts to hold onto more dealer license plates than the dealership was entitled to, according to an arrest affidavit obtained by The Providence Journal.

In late 2017, the affidavit says, Pate tried to replace a plate that had been lost. He was told that, based on the number of employees on an official list, the dealership could have only six dealer plates, the affidavit says.

This meant he could not replace the lost plate, it says, and it also meant the dealership had to return two plates being used by his wife and his son, who were not listed as employees.

The situation triggered a site inspection of the dealership, which is located on Douglas Avenue near the North Providence line.

An investigator for the state Department of Motor Vehicles, Anne Mancini, asked for bills of sale for the year 2017. The sales number can govern how many dealer plates a business is entitled to under the regulations.

On an application, the dealership at 702 Douglas Ave. had claimed 219 auto sales, reads the affidavit, but on the day of the inspection, the dealership could only show 149 folders holding bills of sale. Later, it says, the investigators learned that the dealership had misrepresented its sales for 2016, the affidavit says.

During Mancini’s review of the sales bills from 2017, she identified the illegal fees, according to the affidavit.

The Motor Vehicle Dealers License and Hearing Board found that the dealership had violated numerous rules and regulations, and on July 11 the panel revoked the dealership’s license, fined the company $518,000 and referred the case to state police.

A subsequent investigation by the state police auto theft and insurance fraud unit found that the three defendants presented false statements and documents to obtain a dealer's license, according to a state police news release.

All three men were charged with conspiracy, filing a false document, filing a false statement to obtain a license or registration, forgery, obstructing a police officer and obtaining money under false pretenses. They were released on personal recognizance after appearing before O’Neill — a former majority whip in the House.

The defendants were swarmed by media as they left the courthouse in heavy rain.

“I didn’t do anything,” said Pate, 73, of 100 Valerie Court, Cranston.

Rogers, who served as mayor of East Providence from 1980 to 1984 and again from 2010 to 2012, had nothing to say. The former mayor and councilman, 64, of 500 Warren Ave., wore a plaid shirt.

East Providence this year is electing a mayor for the first time; previously, members of the City Council elected one of their own to preside over council meetings with the ceremonial title of mayor.

Rogers has had past legal problems; in 2010, he reimbursed Sam's Club for more than $500 in bounced checks dating back to 1994. Rogers disclosed at that time that he had been arrested in 1987 on a charge of possessing cocaine, and he blamed his bounced checks on a past drug addiction.

Palangio, 56, of 125 Midway Rd., Apartment 108, departed from the courthouse in the same car as Rogers.

According to a state police news release, Palangio is listed as owner of the auto dealership property at 702 Douglas Ave., and Rogers was an employee.

Palangio was a state representative representing Providence from 1993 to 2002, and again from 2013 to 2017. In 2016, he was defeated in the Democratic primary by Moira Walsh.

The investigation continues. Anyone who has purchased a car from the dealership through its, "Buy Here, Pay Here" program can contact supervisor Kevin Rabbitt or investigator Anne Mancini at DMV’s dealers’ license and regulations office, (401) 462-5746.