Huge DMV Vehicle Fraud Bust in Two County Area; More Than 200 Law Enforcement Personnel Launch Pre-Dawn Sweep

Orange County- Some 90 DMV investigators and more than 120 officers from nearby law enforcement agencies today executed 16 search warrants and 22 arrest warrants in a massive luxury vehicle purchasing scheme. Officials call it the largest auto theft fraud operation in Orange County history, with total losses to victims totaling more than $8.5 million dollars. So far, 17 persons have been arrested in the surprise undercover sweep in Orange and southern Los Angeles counties.

The law enforcement operation took place this morning when DMV investigators-backed by officers and personnel from the Orange County Sheriff's Department, the California Highway Patrol, the Orange County Stolen Car Task Force, and a number of other cooperating agencies from surrounding communities---raided 29 different locations, serving warrants on both private residences and commercial locations.

Today's arrest operation is the result of a probe launched more than two years ago by the Anaheim DMV Investigations office. Based on the results of that probe, the Orange County District Attorney's office filed a 167-count felony complaint which charges the operators of the Duty Free Car Payment used car dealership of Garden Grove with grand theft auto, conspiracy, burglary, forgery of DMV registration documents, and making false financial statements. As a result, million-dollar arrest warrants were secured for six key suspects who orchestrated a complex scheme involving the purchase and sale of 207 high-end, luxury vehicles. There were also 15 other co-conspirators--so-called "straw buyers"-for whom $25,000 arrest warrants were issued.

Here's how investigators say it all worked:

The "straw buyers" (or co-conspirators) were recruited by ads placed in Southern California Vietnamese-language newspapers. They were supplied with fraudulent credit profiles by the six key suspects and arrangements were made by Duty Free Car Payment for these co-conspirators to meet with new car dealerships throughout the Orange County-Los Angeles County area to purchase high-end vehicles like Hummers, Lexus cars and SUVs, BMWs, Cadillac Escalades, Lincoln Navigators and others. DMV investigators say it was common for some of these co-conspirators to purchase vehicles with total values $300,000-$500,000 in just over a two-week period.

Immediately after the purchase, the co-conspirators would hand over the keys to the vehicle (while still at the new car dealership) to a Duty Free Car Payment employee who would drive the vehicle back to the dealership property. Duty Free Car Payment would then make two or three monthly payments to the lending institutions involved. During that period, the vehicles were then sold to third parties using doctored DMV paperwork. Investigators say the co-conspirators collected $1000 per vehicle or were given large no-interest loans.

Investigators point out that many of these third-party buyers should have been suspicious of the overly-discounted prices of the vehicles, or been aware that their credit histories usually would not have allowed them to purchase any high-end luxury car or SUV. Unfortunately, many of these buyers have had to forfeit their newly-purchased vehicles as well as any equity. More than 12 different lending institutions were also victims in this scheme, as well as a number of area new car dealerships.

All of the suspects were transported to the Orange County Jail for booking. At least 22 of the vehicles in question were recovered.

EDITORS PLEASE NOTE: A news conference further detailing the operation will be held at 3 p.m. at the Orange County Fairgrounds, which is located at 88 Fair Drive, in Costa Mesa. Media should go to Gate #7 off of Arlington Drive. (The gate is unmarked, but an officer will be posted at the entrance to direct reporters/photographers.) DMV investigators who spearheaded the case, Orange County District Attorney Tony Rackauckas, Orange County Sheriff Michael Carona and representatives from allied law enforcement agencies will be available for comment.