173 lines
9.3 KiB
Plaintext
173 lines
9.3 KiB
Plaintext
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TOWING COMPANIES: FRIENDS OR FOES?
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By
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Michael C. Gillo
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Investigator
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Broward County State Attorney's Office
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Ft. Lauderdale, Florida
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Law enforcement uses towing companies extensively. Usually,
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these companies are under contract awarded through a bidding
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process. This gives the company exclusive rights to do all
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towing for individual agencies. In metropolitan areas, a company
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could be responsible for towing up to 100 vehicles a day. The
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fee for each tow, plus storage charges, generates large amounts
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of revenue.
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Unfortunately, once a towing company has temporary legal
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possession of a vehicle, many law enforcement agencies believe
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their responsibility ceases, except for the prosecution of the
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offender. When a towing company removes a vehicle at the
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direction of a law enforcement agency, it acts as an instrument
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of that agency. It gains lawful, though temporary, possession of
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the vehicle. However, if left unchecked, an unscrupulous towing
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company might use this temporary possession to gain permanent
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title to the vehicle illegally. Once this happens, the company
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can sell it and realize a bigger profit apart from tow/storage
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fees.
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Even when State statutes regulate and procedurally establish
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guidelines for towing companies when disposing of vehicles, there
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is opportunity for abuse and criminal activity. This became
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evident during an investigation of one towing company in Broward
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County, Florida. Based on an informant's tip, the Florida
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Department of Law Enforcement (FDLE) initiated an investigation
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that subsequently identified schemes enabling this company to
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circumvent the law. This towing company obtained new titles and
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sold the vehicles while hiding behind the very laws that granted
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it the right to recoup service fees.
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BACKGROUND
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The State of Florida enacted legislation enabling towing
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companies to recoup losses when there was little hope of
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recovering from owners the towing and storage fees incurred.
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When passed, the Towing and Recovery Association of America
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(TRAA) hailed the statute as ``...one of the best in the
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Nation.'' The law clearly defines the mandates to which towing
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and storage companies should adhere when disposing of vehicles.
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Strictly regulatory in nature, the law specifically outlines a
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set procedure to follow for the legal disposition of motor
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vehicles that fall under its purview. However, since the
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responsibility for monitoring these statutory procedures does not
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fall within a specific agency, there is no checks-and-balance
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system to ensure compliance to the statute.
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SCHEMES AND PLOYS
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The intricate schemes and ploys detected during this
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investigation served as the basis by which to gain illegal
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financial profits on a large scale. Such schemes revolve around
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obtaining vehicles legally and then disposing of them through
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unscrupulous and illegal methods.
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During its investigation, the Department of Law Enforcement
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identified several ways by which the unscrupulous towing operator
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gains possession of towed vehicles. For example, after being
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towed to the storage compound, the towing operator routinely
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searches the vehicle for a title, bill of sale, or other
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documentation that would allow the company to identify the
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owner/lien holder. If a lien cannot be satisfied or eliminated,
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the towing operator simply sells the vehicle at auction as a
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``parts car.''
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If the identity of the owner cannot be determined or the
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owner cannot be found, the towing company initiates a lien
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process in order to sell the vehicle at public auction for costs
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incurred. Usually, little or no effort is made to find or
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notify the owner. Then, if left unclaimed, the vehicle can be
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retitled as ``unknown'' and later sold privately.
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Under the provisions of the Florida statute, a towing
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operator must sell a vehicle at public auction. The statute also
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stipulates that the selling agent may keep only enough money from
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the sale of the vehicle to pay for the tow/storage charges
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incurred. The remainder of the amount collected is to be
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forwarded to the clerk of the court's registry to be held in
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escrow. However, a towing operator can record a lesser dollar
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amount than the actual sale price of the vehicle. By
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misrepresenting the sale price, the towing company retains more
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of the money collected.
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Further, a towing company also may falsify documentation
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intentionally to the Florida Department of Highway Safety and
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Motor Vehicles (DHSMV) regarding the actual sale price of a
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vehicle. The company falsifies documentation so that it does
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not have to pay the proper sales tax. Or, a bill of sale, which
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is necessary to gain legal possession, can be falsified. One
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method is to contact the last registered owner--but not the
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current owner--to sign a bill of sale. Or more simply, the
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operator forges the signature of the registered owner or lien
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holder. In any case, with a bill of sale, the unscrupulous
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towing company processes a vehicle through the State's motor
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vehicle system without question.
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Another technique is to submit records showing that a
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vehicle offered at auction did not sell. This allows the towing
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company to claim the vehicle for towing and storage fees. The
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vehicle can then be retitled and sold privately. Many times, the
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vehicle does not reach the auction block. Instead, the operator
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sells the vehicle before the auction date.
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A towing company also may purposefully falsify the extent of
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damage incurred by a vehicle or the charges for towing and
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storage to insurance companies and lien holders. This gives the
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appearance that the vehicle has little value. This way, the
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towing company obtains clear title to the vehicle and can sell it
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at its discretion.
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On some vehicles, where a clear title cannot be obtained,
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the vehicle identification number (VIN) of another vehicle of the
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same make and model is used to gain title. Also, towed vehicles
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that do not have a VIN identifier may be given a VIN from a
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wrecked vehicle of the same make and model, thereby laying the
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groundwork to claim the vehicle.
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THE FINDINGS
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The investigation referenced in the beginning of this
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article was conducted jointly by the FDLE, a city police
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department, a local State Attorney's Office, the Florida DHSMV,
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the Department of Revenue, and the Florida Attorney General's
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Office. It revealed that no safeguards are directly in place to
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oversee the disposition of towed vehicles.
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This particular investigation resulted in the arrest of
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owners of a towing company and eight current or former employees
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on approximately 250 felony charges ranging from Racketeer
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Influenced and Corrupt Organizations Statute (RICO) violations,
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dealing in stolen property, grand theft, falsifying title
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applications, and sales tax violations. The Department of
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Revenue levied $789,000 in assessments and fines. The Attorney
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General's Office filed civil RICO actions on several parcels of
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property used by the towing company, and the city police
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department seized nine wreckers valued at approximately $20,000
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each. Seven defendants pled guilty; three went to trial. Of
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these three, one defendant was acquitted, another had the charges
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dismissed during the trial, and the third was convicted of 10
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felonies.
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CONCLUSION
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As a result of the investigation, the FDLE met with members
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of the Towing and Recovery Association of America and the
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Professional Wrecker Operations of Florida to rectify loopholes
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and encourage cooperation between law enforcement and the towing
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industry. Discussions have also been held to propose better
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legislation regarding a checks-and-balance system regulating
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towing operations.
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However, the best safeguard against unscrupulous operators
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is the police agency that enters into a contract with a towing
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company. Police departments should not develop a false sense of
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security with the towing company. Agencies should evaluate the
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type of relationship they have with their towing companies, or a
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review of the towing company's operations may be in order. In
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any regard, departments should consider whether the towing
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company they employ or enter into a contract with is ``a friend
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or foe.''
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