When federal authorities obtained a guilty plea last year from Khosrow Kohanchi for rolling back the mileage on used cars, it looked like another case proving the serious and growing threat of odometer fraud.
Kohanchi was accused of importing cars to Los Angeles from Baltimore, rolling back the odometers and bilking consumers. He was sentenced to four months' incarceration and ordered to pay restitution of $1.2 million, the largest amount for odometer fraud since it was defined as a federal crime in the mid-1970s.
But Kohanchi's case and the 15 or so others like it brought every year by federal authorities may be something less than a reflection of a widening consumer menace.
A new federal study released last week shows that odometer fraud is probably not nearly as large a problem as the public has been led to believe during the last decade.
The Department of Transportation reported that 450,000 cases of odometer fraud occur in the U.S. each year, costing consumers more than $1 billion by putting a higher value on used vehicles than is warranted by their actual histories.
"Odometer fraud puts the safety and well-being of consumers at risk because it misleads them about the wear and tear on the vehicle they are buying," Transportation Secretary Norman Y. Mineta said.
But that seems to represent something of a rollback in our perception of the crime. In the late 1980s, the federal government warned that 1 million to 3 million cases of odometer fraud were occurring each year, costing consumers $3.3 billion to $4.1 billion.
Various reports by state agencies also have warned of a fairly high threat.
In 1992, Pennsylvania found that 5% of the odometers on leased cars were rolled back before resale to consumers, based on a random sample of 49,229 vehicles. The study estimated that vehicle buyers spent an additional $6,653 on average, based on the false perception of lower mileage.
Illinois authorities sounded an even more dire warning in 1985, estimating that 49.8% of leased vehicles had their odometers rolled back.
Ever since the then-Chrysler Corp. admitted in the 1970s that it had disconnected odometers on new cars while they were used by executives, many consumers and experts have assumed that odometer readings are next to worthless when buying a used vehicle.
Federal officials say the lower figures in the recent report show they are making inroads against odometer fraud through enforcement.
