Orange County residents spend more money on cars and auto-related products than on anything else except their homes.
So, it is easy to see why local automotive scams and crimes keep 13 local Department of Motor Vehicles special investigators on the run.
Tucked away in DMV offices in Fullerton and Santa Ana, the investigators probe a plethora of crimes ranging from rolled-back odometers to stolen parts and false advertising by county car dealers.
Investigators wear badges, carry guns and arrest people when necessary. Their territory includes five auto malls and 1,245 new- and used-car dealerships. Investigators also keep tabs on hundreds of auto repair shops, dismantling yards, recreational vehicle and boat dealers.
"For all the fraud that's out there, we could use double the investigators in Orange County," said Rande King, a special investigator in the Santa Ana office.
Uncover Other Crimes
In their quest, DMV investigators often uncover other nefarious activities, including drugs smuggled inside cars purchased wholesale in Mexico. And three Northern California inspectors recently stumbled into a major methamphetamine lab while they were inspecting an auto-dismantling business.
Many investigators join the DMV from the California Highway Patrol or other law enforcement agencies. All are required to have the stamina needed to solve complex paper fraud cases and work closely with other agencies, including the FBI and the Secret Service.
"We are a run silent, run deep operation," said Al Caruso, southern area administrator, commenting on why so few people even know the DMV investigators exist.
Car dealers who run into trouble with the DMV usually live up to their reputation as being fast-talking and flashy.
"We tell the victims right up front that generally, when funds are embezzled, the dealer usually has a habit he's spent it on--gambling, drugs or women," said Caruso.
Most DMV cases against dealers are built on customer complaints. Recently, a woman who canceled an extended warranty on her new recreational vehicle was having trouble getting her money back. In the course of an inquiry, DMV investigator Claire Page found out that the dealer earned a $1,700 profit on the $2,158 warranty package he sold to the woman. Page's investigation also revealed that the dealer paid $294 for a service contract but charged his customer $1,695.
Discounts Not Requested
In another pending case, Page said she reviewed a Ford dealer's weekend ads promoting a $2,000 discount for a particular model. She later checked the dealer's sales records to see if the advertised discounts were offered to buyers. The records revealed that about 35 buyers had not received the discount because they hadn't asked for it.
"By law, the dealers have to offer the discount to everyone, not just to the people who ask for it," Page said. She declined to name the dealership because it is still negotiating a substantial monetary settlement with the DMV, Page said.
Page also checks on special sales packages, including one dealer's $599 "Coastal Protection" plan. For that price, customers' cars received a special wax job, fabric guard and an undercoating. Another dealer featured floor mats, stripes, door edge guards and wheel-lip moldings for $999.
"These packages are deceptive because people are confused by them," Page said, adding that the deceptive advertising cases take a lot of time to put together, but she "keeps plugging away."
Even after a DMV investigator painstakingly makes a case against a dealer for deceptive sales practices, false advertising, or rolling back odometers, the next challenge is finding a district attorney willing to prosecute.
"Fraud cases are very hard to prove, and D.A.s don't like them," said James Barnes, a Santa Ana DMV investigator. "But, if you have enough time, there are few cases that are unsolvable."
In Orange County, investigators are now focusing their efforts on a burgeoning crop of fly-by-night subleasing firms.
The subleasing companies profit by matching people who can no longer afford their cars with poor credit risks who are willing to take over the payments. The new buyer or lessor sends his monthly check to the subleasing company, which is supposed to pass it through to the original lender. The problem is the that sub-lessors may stop making the payments and the original owner or leaseholder is stuck.
Meanwhile, the bank or finance company has no idea that the original buyer is out of the picture because the car title remains in his or her name.
Customers Left Behind
Page said several Orange County subleasing companies have disappeared, leaving dozens of unhappy customers in their wake. Because the companies operate in a gray area of the law, it has been difficult to prosecute them.
"It's too hard now to prove grand theft, so there is new legislation pending," Page said.