textfiles/law/mvtleb.law

September 1990                                                    
  
                                                                 
              MOTOR VEHICLE THEFT INVESTIGATIONS:                     
                 EMERGING INTERNATIONAL TRENDS   
                    
                              By

                      Mary Ellen Beekman
           Special Agent, FBI, New York Field Office
                              and
                       Michael R. Daly
          Detective, New York City Police Department

                                                                  
     Early one morning in the Bronx, New York, a team of FBI 
Agents and detectives from the New York City Police Department 
(NYPD) watched as car thieves drove a 1987 Mercedes Benz into a 
40-foot freight container.  A National Crime Information Center 
(NCIC) check determined the car had been stolen the previous day, 
only a few blocks from where it was being loaded.                 

     Also, within the hour, a stolen Nissan Pathfinder was loaded 
into the same container.  Almost immediately, members of the car 
theft ring drove the container to a port in New Jersey where it 
was to be loaded onto a vessel bound for a foreign port.  Before 
the ship set sail, however, U.S. Customs officers intercepted the 
illegal cargo and the vehicles were returned to their owners.    

     Unfortunately, most car thieves have more success 
transporting their cargo out of this country.  And there are more 
vehicles being stolen than ever before.  According to Uniform 
Crime Report (UCR) records compiled by the FBI, there were 
1,432,916 vehicles stolen in the United States during 1988.  This 
was an increase of 11.2 percent over 1987 figures, and 
preliminary records for 1989 indicate that rates are still 
increasing. (1)                                                   

     The emerging international character of the vehicle theft
trade contributes to this increase, especially in areas with
access to large port facilities.  Selling stolen vehicles
overseas, where eager buyers will often pay double the original
purchase price for a quality automobile, is rapidly changing the
domestic auto theft trade.  Increasingly, vehicles stolen in the
United States are being shipped out of the country where
potential profits are far greater.  As international trade
increases and shipping terminals around the country are
expanded, auto theft rings will have greater access to foreign
ports.

CAR THEFT TACTICS                                                 

     The above examples demonstrate the relative ease with which
sophisticated thieves operate in the stolen vehicle trade.  Both
the Nissan Pathfinder and the Mercedes Benz already had been
equipped with ignition keys and both were in driving condition.

     Information obtained from sources within the car theft ring
indicated that Nissan Pathfinders and Toyota Forerunners were
the vehicles of choice among this particular group, simply
because they were easy to steal.  Thieves need only to pop a
door lock to obtain the ignition key code number. With this
number and a portable key maker, they make a duplicate key and
drive away with the vehicle within a relatively short period of
time, reportedly 7 minutes or less.

     To steal a Mercedes Benz requires more risk and cunning on 
the thieves' part, because the value of the Mercedes decreases 
considerably if damaged.  Therefore, it is necessary to steal the 
key along with the vehicle.  This is done either by taking the 
car at gunpoint while the driver is stopped for a red light, or 
by deliberately bumping into the rear of the car.  When the 
driver gets out to examine the damage, someone jumps in and flees 
with the vehicle, a tactic usually referred to as ``bump and 
run.''  A somewhat less risky tactic is to steal the Mercedes 
from a parking garage, either by stealing the keys or paying the 
attendant for them.                                         

SHIPPING STOLEN VEHICLES                                          

     Once a vehicle has been stolen, the process of transporting 
it out of the country becomes complicated.  For the most part, it 
requires the help of individuals with knowledge of the shipping 
business, usually known in the trade as freight forwarders. 
Freight forwarders get paid to make all the arrangements and 
prepare the necessary shipping documents.  Since these 
individuals rarely see the items being shipped, they can be 
easily fooled into shipping illegal cargo.                        

     Consequently, the documents prepared by freight forwarders
reflect incorrect information regarding the nature of the cargo.
An early technique of car thieves was simply to provide
incorrect vehicle identification numbers (VIN) to freight
forwarders who, in turn, would list these on shipping documents.
This was effective until Customs agents became familiar with the
technique and began to seize increasing numbers of stolen
vehicles at the docks.  As a result, car thieves began to tell
freight forwarders to list household goods or other items on the
paperwork in order to further conceal the illegal shipments.

EMERGING TRENDS                                                   

     Where stolen cars were once painted, transported across 
State lines, and delivered to either unsuspecting or 
unscrupulous used car dealerships, shipping stolen vehicles out 
of the country for sale is quickly emerging as the method of 
choice among car theft rings.  The United States is becoming a 
supplier of stolen vehicles to third-world countries.             

     In one Caribbean country, a survey conducted by various law 
enforcement agencies determined that approximately one out of 
every five vehicles on the docks awaiting Customs clearance 
showed clear signs that it had been stolen and shipped from the 
United States.  For vehicles worth over $15,000, the rate 
increased to nearly four out of five.                             

     In a statement given by an individual convicted of 
interstate shipment of stolen vehicles, the thief claimed that 
almost every vehicle in his native country had been stolen and 
shipped from the United States.  This individual also stated that 
these vehicles have visible signs of theft damage.  Furthermore, 
he claimed that people in his country order specific types of 
vehicles to be stolen.  Buyers are on waiting lists and will pay 
top dollar, often twice the original purchase price, for a 
quality vehicle.  Finally, this individual reported that these 
rings are highly developed and would be very difficult to stop.   

DETERMINING THE REASONS                                           

     It is not difficult to understand why shipping stolen 
vehicles overseas has become a preferred method of car theft 
rings.  Automobiles have long been a scarce and coveted item in 
many countries.  Wealthy citizens are willing to pay large sums 
for quality vehicles.                                             

     In one taped conversation, an individual bragged that he 
could easily make $100,000 a month from shipping stolen vehicles. 
He described his outlays for expenses as follows:                 

     *  $800 to $1,000 for each stolen vehicle, depending on the
        year and the type of vehicle,

     *  $2,300 for the container and ocean freight (each container 
        holds two vehicles),                                              

     *  $300 trucking expenses, and                                  

     *  $60 for the freight forwarder.                               

     A stolen vehicle will often net double its value overseas.
Therefore, a vehicle valued at $20,000 commands $40,000 in the
international market.  Shipping two containers (4 vehicles) a
month would net well over $100,000 (tax free).

     Another reason for the relatively unchecked growth of the
auto theft trade is that it appears to be a ``victimless''
crime.  There are few big losers.  Most vehicle owners are
reimbursed by their insurance companies, and although the
insurance industry covers its losses by raising premiums, the
cost is spread out so that it effects everyone only slightly.

     Moreover, the thief rarely goes to jail, and in many local
jurisdictions, the crime goes virtually unpunished.  One
individual in New York City had been arrested five times for
auto theft-related crimes, and on one occasion, had actually
been apprehended while driving a stolen car.  Yet, he has not
spent any time in jail.  He has paid fines totaling no more than
$500, far less than he makes for one stolen vehicle.  There
are presumably many similar stories in the auto theft trade.
The low apprehension, prosecution, and conviction rate of auto
thieves make this crime a booming industry, with high profits
and low risks.

     Geography can be an important factor in determining the
frequency of auto theft.  The proximity to a port where shipping
lines provide access to foreign countries contributes to high
automobile theft rates.  In New York City alone, the rate of
auto theft increased 25 percent in 1988.  It is not only New
York, Boston, and Philadelphia that report high theft rates but
also Houston, Texas; Tampa, Florida; Newark, New Jersey; and
other cities with large international shipping terminals.  In
fact, according to UCR statistics, 6 of the top 10 cities in
vehicle theft are in New Jersey (Irvington, East Orange, Camden,
Elizabeth, Trenton, and Newark), presumably because New Jersey
has one of the largest ports in the country. (2)

EMERGING COOPERATION:  OPERATION TIERRA MAR                       

     In a joint investigation, code-named ``Operation Tierra
Mar,'' the FBI, New York City Police Department, U.S. Customs
Service, and the U.S. Attorney's Office penetrated several car
theft rings with international ties.  Customs agents scanned
ship manifests, and from past experience, determined which
containers had the highest probability of containing stolen
vehicles.  Only these containers were inspected.  If stolen
vehicles were found, they were offloaded and the container was
shipped empty.  In some of these empty containers, Custom agents
would place a photograph of the vehicle so the individual
waiting to receive the shipment would not be completely
disappointed.

     More importantly, shipping the empty containers gave the FBI 
enough time to video tape additional loadings before the thieves
became aware that their operation was discovered and changed
their location.  Capturing the loading of stolen vehicles on
video was the single most important factor in convicting the
people engaged in the scheme.

     As a result of the investigation, 11 individuals were 
convicted and 125 stolen vehicles were recovered.  However, even
this operation, one of the largest of its kind, did not put a
dent in the illegal vehicle export trade.  While investigators
were completing their cases against these individuals, they knew
that illegal exporters would be devising new methods of shipping
stolen vehicles.

NEW REGULATIONS, NEW TACTICS                                      

     In May 1989, the U.S. Customs Service instituted new
regulations regarding the exportation of vehicles from the
United States.  As a result of the new rules, an exporter
attempting to ship a vehicle must provide an original or
notarized copy of the certificate of title, or other
documentation proving ownership, to the receiving clerk at the
point of shipping at least 3 days prior to export.

     About a month after these new regulations took effect, 
illegal exporters devised a way to beat the new system. 
According to informed sources, legally purchased vehicles with 
legal certificates of title are being shipped out of the country 
in compliance with U.S. Customs regulations.  When these vehicles 
arrive at a foreign port, the VIN plates are removed and sent 
back to the United States.  These VIN plates are then placed on 
similar stolen vehicles.  This process is dubbed ``born again,'' 
since these vehicles can now be shipped out of the country under 
the cover of a legal certificate of title.                 

CONCLUSION                                                        

     While auto theft has long been a problem for law
enforcement, the emerging international character of auto theft
rings increases the threat of this crime, especially in areas
near overseas shipping terminals.  As international trade
increases, new ports are constructed and existing ports
expanded, more cities obtain access to international shipping
lines.  Unfortunately, this also enhances the opportunities open
to auto theft rings for exporting their illegal cargo out of
this country.

     As Operation Tierra Mar demonstrates, cooperation between
Federal, State, and local agencies that have jurisdiction over
the different phases of the illegal vehicle trade is the best
way to combat this growing problem.  Interagency cooperation
will be increasingly important as law enforcement faces this
emerging trend in the auto theft trade.


FOOTNOTES                                                         

     (1)  Uniform Crime Reporting Program, Federal Bureau of 
Investigation, Crime in the United States  1989 (Washington, 
D.C.:  U.S. Government Printing Office).                          

     (2)  Ibid.