Informant Vol 10 No 2 - 2013 Spring - National White Collar Crime ...

How it affects the community and law enforcementMillions of salvage vehicles are sold each year. Nearlyevery online salvage auction NSVRP has monitored offersseverely damaged cars with inexplicably clean titles andmany are purchased at these auctions and resold with undisclosedprior damage to consumers.Often, the organizations lookingto resell these total losses to unsuspectingconsumers at near retailbook value are not small-time, inexperiencedgroups. Quite often, a reseller’ssite leads to multiple businessesoperating from fictitious addressesand parties with criminal records forautomotive-related crimes. They areoften clearly set up in a way that isdesigned to defraud unsuspectingconsumers and are more than likelyengaged in other activities that cause problems for law enforcement.In many cases, groups taking advantage of abuses inthe sale of used and salvage vehicles remarket badly damaged,clean-title vehicles to unsuspecting consumers whohave no idea of the true extent of the prior damage, thepotential for compromised safety and the likelihood thatadditional extensive repairs will be required in the not-sodistantfuture. Furthermore, by using the Internet and layersof insubstantial businesses, consumers have little in theway of protection from these sorts of practices.How can law enforcement become more active in fightingthis type of crime?DOJ cites salvage pools as “one of the most significantsources used by criminal groups as a source of paperworkand as a way to fund their operations.” While it is apparentthat global direct access to U.S. used and salvage auto auctionsis facilitating domestic and international crime andtrade-based money laundering in addition to domesticconsumer fraud, this activity is not very well understoodand it is very difficult to trace.However, once investigators know what to look for,lower-level leads can uncover enterprise-level crime activityin a surprising number of cases. When you see acloned car, or see a car that has been title washed, considerhow it happened. Quite often, this can lead back to a patternproblem and can serve as an entry point into a largerstructural problem.Recently, the San Juan New Mexico Sheriff ’s Office announcedaction against a business that had been illegallyengaged in the purchase of vehicles for the purpose of convertingthem to scrap. The Sheriff ’s Office reached out andNearly every online salvage auction NSVRPhas monitored offers severely damaged carswith inexplicably clean titles, and many arepurchased at these auctions and resold withundisclosed prior damage to consumersthrough various means.worked separately with DOJ and NSVRP to identify 533vehicles purchased in violation of NMVTIS, amountingto civil fines and penalties of nearly $60,000. One of thebusiness’ owners pleaded guilty to five counts of fraud andsentencing will take place later this year.A first step is to check and re-check all documentation,including the DMV title for genuine source information;state information for dual identities; and support documentssuch as emission labels, shipping labels, and colormatches.Furthermore, be sure to use all of the resources availableto you, including NMVTIS, the National Vehicle ServiceDatabase (NVS), NSVRP, National Insurance CrimeBureau and others.Depending upon the role of your agency, vehicles canrepresent more than just a question of a stolen car. If youare in a position to deal specifically with salvage or usedcars, you may be interested in looking at the NationalWhite Collar Crime Center’s course to help law enforcementofficials identify structural problems in the sale ofused and salvage vehicles that are contributing to defraudingconsumers and enriching criminal organizations.To learn more about the Online Salvage Vehicle AuctionFraud seminar (funded by the Bureau of Justice Assistance)or to register go to www.nw3c.org/training/specialty-training/vehicle-auction-fraud16INFORMANT: SPRING/SUMMER 2013