9 Indicted in Title Fraud Scheme in Arizona

9 people were indicted by a grand jury in Arizona. According to AZcentral.com, ” An Arizona grand jury has indicted nine people accused of running an illegal operation that produced tens of thousands of titles for vehicles being sold in 42 states. 

State prosecutors say Scott Bandy, James Johnson, Mary Fialko, James Edward Fialko, Lon Chaneyfield, Ivan Valenzuela, Oscar Valenzuela, Tamela Bandy and Ashley Cwick have been charged with conspiracy, fraudulent schemes and artifices, money laundering, control of an illegal enterprise and fraudulent schemes and practices.”

They also said ”

Prosecutors say the nine people indicted are accused of conspiring since 2015 to fraudulently obtain Arizona car dealership licenses and of consigning those dealership licenses to paying subscribers via an online membership service.

Over 1,500 subscribers purchased thousands of vehicles in 42 states and the indicted defendants are accused of fraudulently titling more than 30,000 vehicles during the course of this scheme. 

Prosecutors say the amount of illegal proceeds associated with the scheme is alleged to be at least $6.8 million.”

Read the whole article here. AZcentral.com

Texas Car Dealer Convicted in Title Washing Scheme

A press release from the FBI says, “United States Attorney John E. Murphy announced that in San Antonio this afternoon, a federal jury convicted 49-year-old car dealer Jerry Edward Weaver, of Rowlett, Texas, for his role in a vehicle title washing scheme.”

According to the FBI, ““Title washing” is the fraudulent process through which a vehicle’s title is corruptly altered to conceal information that should normally be contained on the title, such as a previous salvaged title or a financial lienholder. A vehicle that has a “certificate of destruction,” “non-repairable” history, or “parts only” history can only be utilized for parts or scrap metal and can never receive a clean title.”

Also stated in the press release, “Evidence presented during trial revealed that between June 2009 and October 2010, Weaver; co-defendant Babauk Omeed Harizavi, of San Antonio; and others were involved in a scheme to defraud, by requesting and filing fraudulent paperwork with the Texas Department of Motor Vehicles, to seek clean Texas vehicle titles using the mechanic’s lien process. Upon receipt of the clean Texas vehicle titles, the defendants sold those vehicles to unsuspecting consumers or third parties without disclosing the past “certificate of destruction,” “salvage title,” or “parts only” title histories of those vehicles. Weaver, Harizavi, and their co-defendants are collectively responsible for 613 fraudulently obtained Texas vehicle titles issued by the Texas Department of Motor Vehicles based on fraudulently filed mechanic’s liens.”

Read the full press release here, https://archives.fbi.gov/archives/sanantonio/press-releases/2011/jury-convicts-rowlett-car-dealer-in-title-washing-scheme

Several arrested in multi-state $6.8 million auto dealer scam in Arizona

A report from Channel 12 NBC news in Arizona says,

“31 auto dealerships, $6.8 million in illegal proceeds and 42 states. Those are the numbers broken down in the court documents about an expansive auto licensing scheme based in the East Valley.

Authorities opened the investigation after a complaint was filed from a California auto dealer association in March 2019. 

The alleged ringleaders of the scam are identified as Scott Bandy, 28, of Chandler and James Johnson, 40, of Gilbert, according to court documents.   

Investigators claim they created a program where unlicensed auto dealers were assigned or rented licenses. The program subscribers were offered unlimited access to dealer-only car auctions, Arizona dealer plates without proper documentation and the subscribers bypassed the approval process to obtain a license to sell cars, court documents say.

They also said, “Investigators reported identifying 31 auto dealerships involved in the program. And cars were purchased across 42 states.

“The operation also altered vehicle titles from these subscribers for about $100 per title to make it appear as though the individuals bought the vehicles from one of the suspects’ 31 operations with dealer licenses. More than 31,000 titles were processed this way over the past couple of years, and many of the vehicles involved were never in Arizona,” an ADOT statement said.”

Stolen Georgia titles used for stolen vehicles

A box of blank title certificates was embezzled from the Georgia DMV and used to conceal the ownership of stolen cars. The vehicles and titles were transported to Ohio where new titles were obtained from that state. The prior legal ownership was washed away by the issuance of the new vehicle titles.

The group of 17 title scammers was charged in Ohio with tampering with government documents and other offenses.

The ring of thieves made money by either selling the cars or by insuring the vehicles and staging accidents. Vehicle’s were sold in several different states.

Fake lien releases send 10 people to jail

A new batch of car title scammers was apprehended in Southern California after fraudulently filing lien releases on vehicles. After getting “clean titles” on the cars the gang sold them to unsuspecting buyers likely through classified ads such as Craigslist.

The innocent buyers later discovered their vehicles had liens on them are were out the money that they paid for purchase.

“In many instances, innocent individuals were contacted by banks and finance companies when they failed to make payments on loans that had been fraudulently opened in their name,” the Attorney General’s Office said in a news release. It’s a scam known as “title washing” often used to conceal true lienholders of vehicles, according to Carfax.

 

Fake vehicle title scam

This guy in Michigan filed for fake titles to clear valid liens, now going to jail for 10 years.

“Solomon Israel, 60, devised and ran a business that fraudulently re-titled vehicles. His scheme involved obtaining Michigan titles that appeared to give him free and clear ownership to vehicles but actually had third party, finance company security interests. Israel then used the fake titles to get new ones from other states, fraudulently cancelling the third-party interests. He then resold many of the vehicles with the fake titles, causing hundreds of thousands of dollars in losses to the financing companies.”

“Lost title” is often a salvage

Many of the inquires we receive to recover a lost title are a scenario when a buyer purchased a vehicle and was never provided the title from the seller. The seller often claims to have misplaced it, and will provide it later. Very frequently, the seller actually does have the title certificate, but prefers not to display it to the buyer at the time of sale because it contains the salvage brand which would kill the deal.

In this example story from Memphis, a couple purchases a sedan for $5500 cash without a title document only to discover it to be salvage branded vehicle. Dishonest sellers buy up cars at insurance salvage auctions for pennies on the dollar and sell them on Craigslist and Facebook with “no title” claiming to have lost the paperwork. Some even use official dealer names. When the buyer calls the seller to get the title the calls are unanswered or phone shut off.

A bill of sale is not a title

Motor vehicle ownership is evidenced by a title certificate. This is a document created by titlenh.jpegthe government agency such as a DMV or secretary of state proving the ownership name and VIN# for the asset. It is an official legal document of ownership.

 

 

A bill of sale is only a receipt of money and statement of an event. It does not guarantee ownership and is insufficient for a transfer of title by the DMV. It may be a necessary billofsalerecord in order to apply for a title, but by itself a bill of sale for a vehicle only is only an agreement created between two private parties to exchange money for a vehicle on a specific date.

 

 

The only way to ensure a valid ownership for a vehicle purchase is to receive a properly signed and verified legal title document.

Why is the DMV so hard to deal with?

Many times title assistance is requested because the client has tried to work with their local Motor Vehicle Department and it has become complicated. It is not just you, most people have difficulty with DMV processes. The people at the DMV are good people, but are working with a system that is not the most ideal. The budgets that the agencies have to deal with are dwindling every year like most municipal balance sheets. Tax revenues are shrinking, and costs are going up, so government agencies have to do the best that they can with what they need to work with.

dmv1The result is challenging experiences for consumers using these agencies. Sometimes the agency is using technologies and systems beyond their intended lifespan. Sometimes it is because of high turnover and lack of training for representatives. Sometimes it is when the volume of transactions grows beyond the workforce and even the size of the building.

In a recent study of the California DMV, auditors found several challenges to great customer service.

• Assembler, the primary programming language used in DMV field office computer applications, was created around the 1950s and is less commonly used today. With a significant portion of the agency’s IT workers approaching retirement age, DMV faces a potential shortfall of workers with skills to program its computers.

• DMV’s classification system for its offices, which considers the size of the offices and the volume of transactions to allocate resources, was last approved in 1990.

The next available appointment in the three sampled offices was nearly three months away.

DMV employees mean well and try hard with the resources they have to work with. The growth of volume and budget constraints make it difficult to keep up with the demands for vehicle transactions.

 

Fake VIN search websites

Scammers are running fake vehicle history report websites to take payments from people who are selling their vehicles. The fake websites are often on domain names ending with .VIN vs .COM, and are only for the purpose of taking money from unwitting vehicle sellers.

The Federal Trade Commission has discovered multiple such websites, according to their published bulletin. According to the agency:

“Your best bet: play it safe. Go to ftc.gov/usedcars for information on vehicle history reports, recall notices, and how to learn whether a car has been declared salvage. For example, the National Motor Vehicle Title Information System (NMVTIS) operates vehiclehistory.gov, which lists NMVTIS-approved providers of vehicle history reports. Not all vehicle history reports are available through the NMVTIS website. Reports from other providers sometimes have additional information, like accident and repair history.