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Wednesday, 22 June 2016 20:45

Oregon DMV Rules Make State Ripe for Fraud, Auto Theft

OR DMV Rules Makes State Ripe for Fraud, Auto Theft

In March, Crystal Toner found her 2011 Subaru had been stolen, and the car title was fraudulently placed in someone else's name. TRIBUNE PHOTO: JAIME VALDEZ


Crystal Toner was aghast to find an empty carport outside her Southwest Portland condominium in March, her supposedly theft-proof Subaru missing.

When she reported her car stolen, she received an even bigger surprise. Nearly two weeks earlier, her vehicle title had been transferred to someone else without her knowledge — fraudulently, according to police.

Toner had unwittingly stumbled upon a section of Oregon law regulating vehicle ownership documents that, while unknown to many people, law enforcement officials have been concerned about for years. It’s easy for anyone to persuade the Oregon Department of Motor Vehicles to sign off on transferring a car title, with little or no proof of ownership necessary. Oregon works on the honor system, with applicants certifying an ownership claim without having to provide the verified documentation necessary in other types of property foreclosures.

Armed with an ill-gotten title forked over by Oregon DMV, it’s often possible to get a car dealer to issue you a key to a car that in reality you don’t own, law enforcement officials say.

A more common scenario is that the DMV is persuaded to issue a title based on bogus information, one that’s then used to make a stolen car look legitimate while selling it at an auction. The same trick also is used to “wash” a title so it no longer warns potential purchasers that the car has been totaled or reconstructed.

Members of Portland’s thriving auto-theft underworld and illegal tow truck industry are well aware of the soft spot in Oregon DMV consumer protections, and it is “common practice” for people to use bogus DMV-approved documents in an effort to trick the police, says Kevin Demer, a Multnomah County Deputy District Attorney who has handled high-profile cases involving auto theft and illegal tow trucks. While declining to comment on Toner’s case, Demer says if Oregon would adopt safeguards as other states have done, consumers would be better protected.

Frank Scafidi, a former FBI agent who now works for the insurer-funded National Insurance Crime Bureau, says most state DMVs do more to verify ownership when transferring titles.

“I’m going to give up the NICB and move out to Oregon and start buying and selling cars,” he quips. “That sounds like the Wild West out there.”

Toner, for her part, says she wants to share her story to warn consumers, noting that even after the theft was reported and her car located on a local used car lot--having been sold for $10,800 using the bogus title--it still could have been towed at any time, since the DMV wouldn’t give her the title back without a court order.

It’s “amazing to me that this is allowed to exist,” Toner says of Oregon’s laws. “It is unjust beyond belief.”

Larry Purdy, chief of investigations at Oregon DMV, says the agency is well aware that the title process is open to fraud, especially through the “possessory lien” or mechanic’s lien process. DMV essentially operates on the honor system, allowing anyone to claim title to a car as long as they certify they are owed money for services related to it — such as a tow truck company or an auto body shop. The person filing the claim must certify — sign a document stating — that they informed the owner via registered mail, then waited 30 days, allowing the owner to put in a claim before the vehicle is sold at an auction.

“We understand that it’s a flawed process. There’s no doubt about that,” Purdy says, conceding that people commonly lie on the lien form when they certify to have met DMV requirements.

To fix things, he says the Oregon Legislature would need to pass a new law balancing the interests of legitimate businesses seeking to recover their losses, while not adding burdensome requirements that lead to higher taxes.

“It’s unfortunate that it’s not a difficult process to wade through,” Purdy says of the lien process used by scammers. “It takes a lot more work to do it right than it does to submit the fraudulent forms and walk out with a good title.”

While people engaging in fraud to claim a car title are subject to class-A misdemeanors, cops and prosecutors rarely have the time to wade through the paper trail necessary to prove the low-level crime. But in Purdy’s experience, the applicants who certify to meeting the DMV requirements rarely do in reality.

Toner got her Subaru back, but for weeks has been worried that it would be towed by the auto dealer who bought it.

She breathed easier last week when Demer filed charges against the man alleged to have engaged in title fraud to obtain and sell her car, Omar Abu-Neel. Abu-Neel could not be reached for comment, but on Monday he pleaded not guilty in Multnomah County Circuit Court.

Abu-Neel, 51, is not a stranger to law enforcement, having been arrested for prostitution. He was also investigated for odometer fraud in 2013, though prosecutors declined to press charges.

According to Detective Ken Yohe of the Multnomah County Sheriff’s Office, who investigated Abu-Neel for changing an odometer to lead to a lower mileage, the man appears to make a living by buying cars at auctions and reselling them.

Toner’s former partner of five years had given her the car more than 18 months ago, letting her change the title to her name. The two broke up a year ago. Her ex-partner, who could not be reached for comment, worked in auto sales and knows Abu Neel, according to Toner.

Investigating how the Subaru changed hands, Portland Police Detective Mitch Hergert found evidence that the DMV accepted and processed a forged lien notice allegedly used by Abu-Neel to sell the car. The notice claimed the lien was based on debts from repairs made by a Portland auto dealership. The DMV also accepted an odometer form.

Contacted by Hergert, the owner of the auto dealership—-who had not been asked by the DMV to verify the lien—-said “his company doesn’t know anything about this car, never had possession of the car and never did work on the car. ... The company name and the owner’s signature was forged on the form that were provided to DMV,” according to an affidavit filed by Demer.

On March 1, the title allegedly secured by Abu-Neel was placed in the name of someone else who also was not required to provide the DMV with proof of an ownership interest.

“Neither the certificate or the (odometer) form required notarization of any signatures, or the submittal of companion paperwork such as proof of compliance” with legal requirements, Demer wrote in the affidavit.

We would like to thank Portland Tribune for reprint permission.

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