Fake license tags fly from Texas DMV system. Is it finally going to be fixed?

A loophole in state law that allowed millions of temporary bogus auto tags to proliferate on the nation’s streets is set to be closed by the Texas Department of Motor Vehicles next week, a move which police say could have – and should have – been done years ago. .

The proposed rules, published last month, could be approved by a DMV Committee on December 16, following a public comment period that ends Dec. 13. If approved, the new rules are expected to come into effect early next year.

Changes to the state’s online registration system would allow the DMV to shut down suspected scam businesses faster and limit the number of tags a single business can generate in a month.

“The ministry’s only recourse to stop resellers who fraudulently obtained temporary labels was license revocation, an administrative process that can take months or years, while still leaving the reseller or converter access to the database. temporary labels to continue fraudulent activity. », Whitney Brewster, Executive Director of Texas DMV said in a press release.

It’s welcome progress, but it took too long and failed to correct many issues, the Travis County Police Constable’s Office Staff Sgt said. Jose Escribano said in an email.

“What they don’t mention is that TxDMV’s board can by law make simple changes and could have done so in 2018 when made aware of the problem,” Escribano said. , which oversees the Travis County Clean Air Task Force, charged with enforcing vehicle emissions laws, including vehicle registration fraud.

The task force and a handful of other local agencies, including officers from Montgomery and Harris County, have hunted down fake badge users nationwide along with other police officers, trying to find fraudulent records created thanks to a loophole Texas created when it streamlined registrations and made it easier for vehicle sellers to generate their own tags online. With limited surveillance, individuals posing as car dealerships entered the system and printed tens of thousands of labels each month, causing police to play mole on the web by trying to shut down bogus dealerships.

In addition to providing basic personal information and photos, DMV and local tax authorities generally do not verify whether a business is legitimate. Despite police objections, applicants’ fingerprints are not taken and DMV databases are not readily accessible to law enforcement.

Police in Travis and Montgomery counties have requested search warrants for DMV offices – rare cases of warrants for a state facility – in order to obtain information relating to bogus car sales companies .

The loophole, identified four years ago, has resulted in the creation of at least 2.1 million, and possibly up to 6 million, temporary fake Texas labels. Based on online ads for the fraudulent labels and where the paper plates were discovered, the scam has spread across the country, South America and West Africa. Anyone with a printer, Escribano said, could create the labels.

In some cases, bogus dealers operating from abandoned homes and storefronts issued tens of thousands of labels in a single month, an impossible sum that has eclipsed the number of new labels issued by large, successful auto dealers. .

False tags, on the other hand, pose a multitude of problems. Acquiring them avoids paying state and local taxes, which ultimately costs drivers more and maintains pollution-spewing cars that cannot meet emission standards on the streets. False labels also make it more difficult to collect tolls and other costs.

“It’s just theft, and we’re all paying for it,” said Morris Lewis, 68, of Katy, who said he regularly sees temporary tags when driving in the Houston area.

More worryingly, police said, false tags are often used in thefts and other violent crimes, making it harder for police to track suspects.

Travis County Precinct 3 Constable Sgt. Jose Escribano gives a course to law enforcement officers in the region on fake paper permit labels at the Woodlands Emergency Training Center on Friday, September 24, 2021 in Conroe.

Michael Wyke / Contributor

In December 2018, Escribano told DMV officials that the system was compromised and bogus companies were adding illegitimate records to the system. These labels, unless the agent carefully studies the information, would appear valid in the system used to verify false labels, but would include erroneous information about the vehicle and its owner.

In May, three people indicted in federal court in Houston over fake tagging scheme stretching from Houston to New York, charged with 15 counts relating to conspiracy and wire fraud. Other investigations are underway, according to the authorities.

However, when it came to shutting down the database, DMV officials said there was little they could do until they got more power from the Texas legislature, so even as more and more false labels are on the streets and indictments are on the rise.

“Recognizing the limited power of TxDMV to proactively and expeditiously combat the misuse of the temporary label system by resellers who commit fraud, the TxDMV Board of Directors recommended changes to the law for consideration by lawmaker, “Brewster said in a statement posted on the agency’s website. .

These recommendations led to HB 3927, adopted in May and signed by Governor Greg Abbott in June. Texas DMV officials said the changes would improve their ability to control labels and remove bogus companies while limiting the number of labels that can be issued.

New businesses, depending on whether it is a franchisee or an independent merchant, will have 600 or 300 beacons respectively that they can issue annually. Once a dealership has split half of their allowance among the vehicles sold, they can apply to the DMV for more approval.

Police, however, said it took too long to put in place the changes, as the DMV and state car dealership associations progressed gradually, debating the potential changes and their effects on the 5,000 car dealerships. new and 20,000 used car dealers in the state.

Escribano said the changes also avoid some of the simpler solutions.

“To truly prevent fraud from the outset, the TxDMV needs to correct the dealership application process which allows for widespread fraud, in-person verification of dealership location, in-person application process, dealerships fingerprints digital and the interconnectivity of all systems, ”he said in an email.

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