Consumer Protection Branch

 

 

Investigatory Resources: 
Odometer Fraud and Motor Vehicle Title Fraud


Table of Contents

 
 

Technical Note 1:
If you encounter broken links or errors, please e-mail consumer.litigation@usdoj.gov.
  Be sure to include the word "odometer" in the subject line
of your e-mail.

Technical Note 2: If you are using Internet Explorer as
your web browser, and you would like to download Word Perfect (wpd)
files, you will have to right click on the link and chose "Save
target as" to save the file.

 

 

Note: The United States Attorney's Manual (USAM) contains information
useful to AUSAs and others involved in prosecuting odometer fraud cases.
Some of the information on this web site overlaps with material in the
USAM, but each resource contains material not found in the other. See:
http://www.usdoj.gov/usao/eousa/foia_reading_room/usam/title4/8mciv.htm#4-8.300

 

       

I. Form Letters and Subpoena Schedules

The Consumer Protection Branch, after consultation with NHTSA's
Odometer Fraud Staff, has developed a series of forms and form letters
that can be used in conducting an odometer fraud/altered securities
investigation. These forms should prove helpful in tracking down
the "paper side" of an odometer fraud/altered securities investigation.

 

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1) Auction Letter (6/96)
This is a form letter addressed to an automobile auction. This form
letter inquires whether individuals and/or entities are registered
at the auction and requests that certain information be produced
about those individuals and/or firms. (The letter does not seek
initial production of all invoices relating to cars bought and/or
sold by the individuals or entities. Given the volume of business
conducted by an auction, there frequently can be a lengthy delay
in receiving invoices from the auction. For most cases, the computer
print-out is all that is necessary initially, and documents can
be more quickly obtained from the dealers who bought/sold cars from
the subjects/targets at the auctions.)

 

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2) High Mileage Seller Letter (6/96)
This is a form letter to be sent to the high mileage seller of the
vehicle. This letter should be sent to the dealership(s) appearing
in the chain of title before the car reached the subject/target
of the investigation. It requests voluntary production of original
documentation relating to the vehicle and asks specific questions
concerning the purchaser.

 

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3) High Mileage Lease Company Letter (6/96) 
This is a form letter to be sent to a leasing company, which originally
owned the vehicle. Most leasing companies will voluntarily provide
documents, but will have little information concerning the individuals
who subsequently purchased the vehicle.

 

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4) Low Mileage Purchaser Letter (6/96) 
This is a form letter to be sent to the low mileage purchaser of
the vehicle. This letter should be sent to the dealership(s) appearing
in the chain of title after the car reached the subject/target of
the investigation. It requests voluntary production of original
documentation relating to the vehicle, and asks specific questions
concerning the seller of the car.

 

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5) Title History Letter (6/96) 
This is a form letter to be sent to the state from which you need
to obtain the title history of a vehicle. To trace a car, usually
an NLETS search will need to be conducted to determine where the
car is presently titled. This letter can then be used to order that
title history. Receipt of that title history may result in having
to order another title history if, for example, the title has been
"washed." CPB's experience has been that most states respond more
quickly to requests of no more than 15-20 cars at one time (instead
of asking for 100+ at once).

 

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6) Subpoena Schedule for Dealer (Not
a Subject/target) (6/96) 

This is a form grand jury subpoena schedule designed for use with
a dealer (who is not believed to be a subject/target of the investigation)
who conducted repeated business with the subjects/targets. When
a dealer has had multiple transactions with the subject/target,
it is more likely that this dealership can provide helpful information
about the subjects/targets. Therefore, an interview (see "Interview
Questions" below) should be sought at the time that the subpoena
is served. Use of a grand jury subpoena will ensure that all documents
relating to all transactions involving the subjects/targets are
produced.

 

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7) Alternative Compliance Form for Subpoena Returns (6/96) 

This document is designed to be used with item 6 above. It allows
for the dealership who conducted repeated business with the subjects/targets
to produce the responsive documents directly to the case agent,
rather than appear before the grand jury. Proceeding in this manner
allows for the case agent and the attorney to receive and review
the documents before bringing the witness before the grand jury,
thus allowing for more informed questioning of the dealership (if
necessary).

 

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8) Interview Questions (8/99) 
This document presents a number of suggested areas that should be
covered in an odometer fraud investigation. Obviously, what questions
should be asked of any witness vary on a case-by-case basis. This
document is merely suggestive--whether its topics are applicable
depends upon the circumstances of the case under investigation.

 

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9) Subpoena Schedule for Corporate Subject/target (6/96)

This is a form subpoena schedule designed for use in seeking records
from a subject/target that has been incorporated (i.e., is a corporation).
Corporations do not have a fifth amendment privilege, and thus must
provide all documents requested. What documents should be sought
in any given case will vary on a case-by-case basis. This sample
schedule presents documents which typically prove useful in odometer
fraud investigations.

 

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10) Subpoena Schedule for Individuals (6/96) 
This is a form subpoena schedule designed for use in seeking records
from an individual. Unlike corporations, individuals have a fifth
amendment right not to produce certain records. However, because
individual car dealers are required under law to keep certain documents,
such as odometer statements, the individuals have no fifth amendment
right to refuse production of these documents.

 

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11) Subpoena Schedule for Banks (6/96) 
This is a form subpoena schedule designed for use to a bank. It
seeks production of financial records pertaining to a subject/target.
Under certain circumstances, the government must reimburse the bank
for its search expenses (see item 12 below). As a result, certain
limitations concerning the dollar value of the checks sought, as
well as the dollar value of deposit items, should be imposed.

 

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12) Financial Privacy Notice (For Use with Bank Subpoenas) (6/96) 

This is a form notice that should accompany bank subpoenas. It sets
forth the conditions under which banks can receive reimbursement
and provides the statutory reimbursement rates.

 

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13) Victim Impact Notice & Statement (8/99)
The is a notice to be sent to consumer victims, in order to gather
information about victim losses before a defendant is sentenced.

 

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14) Victim Notification Letter (6/96)
The form is sent with the notice, and is an Individual Victim Impact
Statement to be completed by the consumer to describe losses.

 

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15) Victim Form Letter (6/96)
This is a form letter to be sent to the current owner of the vehicle
at the conclusion of a case. It informs the owner that the car's
odometer has been rolled back and advises the owner of his or her
rights.

 

       
       

II. Background Materials: Other Resources,
the Law, and Sentencing and Determining Loss

The Consumer Protection Branch has compiled background materials
that may assist you during the course of an odometer fraud investigation. Consumers and others may also be interested in the web page of the Office of Odometer Fraud Investigations of the National Highway Traffic Safety Administration of the United States Department of Transportation. It describes that office’s function, provides information for victims of odometer tampering, and describes cooperative agreements that are available to assist state agency enforcement efforts in this area. The National Odometer and Title Fraud Enforcement Association also has a web page with information on odometer tampering and training conferences that may be of interest to law enforcement personnel.

 

       

A) State DMV List (1/6/06) 
See attached State DMV List with related state agencies

 

       

B) Major Automotive Leasing Companies List (8/99)
A listing of the contact persons and addresses for the major automotive
leasing companies--these companies often were the original owners
of high mileage vehicles that subsequently are clocked. Please e-mail
consumer.litigation@usdoj.gov
for the most recent listing we have of leasing companies. 
Be sure to include the word "odometer" in the subject line of your
e-mail.

 

       

C) National Auto Auction Association Membership Directory

Information on where to obtain a compilation of the names, addresses,
and current management of all automobile auctions that are members
of the National Auto Auction Association; a list of AuctionNet contributing
auctions by region. If you use Carfax in your investigations, this
will assist you in determining the auctions in a given region. Please
contact NADA directly for its latest directory. NADA can be reached
at: http://www.nada.org.

 

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D) Sample Subpoena Request for Handwriting, Photograph, and
Fingerprint Analysis, and another document schedule for a target
(2004)

 

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E) "Required Records"
At the first link is a subpoena that can be sent to a target
that requires the target to produce "required records."  Motor
vehicle dealers are required by both federal and state law to maintain
certain records.  Thus, state law regulating the dealer should
be consulted to determine what records state law requires a dealer
to maintain.  These records can be included in a subpoena of
this nature.

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At the second link is a document that consists of two letters.
 Letters as these can be sent by a prosecutor to attorneys
for a recipient of a "required records" subpoena.  The letters
explain why the subpoena must be answered, and that the recipient
cannot simply refuse to produce documents under the Fifth Amendment.
 This is because of the "required records" exception to the
Fifth Amendment privilege, as explained in the letters. 

 

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F) Relevant Federal Statutes (2009)
Links to relevant federal statutes are available here.

 

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G) Sample Search Warrant and Affidavit (2004)
Sample search warrant and affidavit used in odometer and securities fraud investigation.

 

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H) Sample Indictments (2008)
Four indictments in which the defendants were charged with one or
more of the following crimes: conspiracy under 18 U.S.C. §
371, securities fraud under 18 U.S.C. § 513, mail fraud under
18 U.S.C. § 1341, the interstate transportation of falsely
made, forged, altered, or counterfeited securities under 18 U.S.C.
§ 2314, odometer rollbacks/false mileage statements under 49
U.S.C. §§ 32703(2), 32705(a)(2) and 32709(b), money laundering
under 18 U.S.C. § 1957, and asset forfeiture under 18 U.S.C.
§ 982.

More recently, several cases have involved defendants who replaced odometers rather than rolling back the original odometer in the vehicle. A fifth indictment (the “Mellon” indictment) charges instances of such violations not only as odometer tampering, but also as violating provisions of the law that require specific procedures to be followed when replacing an odometer. See Mellon Count 16, charging conspiracy to commit violations of 49 U.S.C. § 32704 (in violation of 49 U.S.C. §§ 32703(4) and 32709(b)) and Counts 17 - 20 charging substantive violations of 49 U.S.C. §§ 32704(a) and 32709(b). Section 32704 requires that when an odometer is replaced, the new odometer must either (1) reflect the previous mileage, or (2) be reset to read zero and a written notice attached to the left door frame of the vehicle specifying the mileage before the odometer was replaced and the date of the replacement.

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I) Three Supreme Court Opinions on Securities Fraud and Mail
Fraud (2004)

Several Supreme Court rulings are important to the securities and
mail fraud charges commonly used in odometer tampering cases. 
Those cases are summarized, and links to the opinions in "Findlaw"
are included.  The cases are:  McElroy v. United States,
455 U.S. 642 (1982), Schmuck v. United States, 489 U.S. 705
(1989), and Moskal v. United States, 498 U.S. 103 (1990).

 

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J) Sentencing Cases 
Numerous district courts have made loss findings at sentencing hearings
in odometer fraud cases of $4,000 loss per car, or more.  Several
of these cases have led to opinions by Federal Courts of Appeals
which affirm or refer to these findings.  At the link is a
description of some of these cases.

 

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K) Relevant U.S. Sentencing Guidelines (2004) 
Links to the United States Sentencing Guidelines which are typically
applicable in a large-scale odometer fraud prosecution are provided
at this tab.

 

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L) Letter to Probation for Odometer Tampering Case (2007) 

After conviction, it is necessary to inform the United States Probation
Office about the nature of the offenses and the application of the
Sentencing Guidelines to odometer fraud cases.  Most probation
offices are not familiar with odometer tampering cases, so a letter
to the probation office will help that office in writing the Presentence
Investigation Report that guides the sentencing process.  This
letter explains in considerable detail what we have been arguing
in cases throughout the country:  namely, that the consumer
harm caused by odometer fraud should be measured at about $4000/car
where consumers paid approximately $10,000 for the vehicles. 

To obtain any of the items mentioned in these letters that you do
not have, please e-mail consumer.litigation@usdoj.gov
Be sure to include the word "odometer" in the subject line of your
e-mail.

 

       
       

M) Sample Declarations for Use in Sentencing (2008)
Two sample investigator declarations of the type necessary to
accompany the letter to probation that is at item "L" above.

 

pdf wpd doc

The first is a Declaration of NHTSA Odometer Fraud Staff former Special
Agent Robert Eppes for use in a case being sentenced under Sentencing
Guideline 2B1.1, which applies to offenses completed or continued after November
1, 2001.  The declaration is a "form" with fill-in-the-blank
spaces for information regarding a particular case.  Retail
price information is discussed in paragraph 6.  Loss of 50%
of value resulting from a rollback is discussed in paragraph 8.
 Average miles rolled off of the odometers involved in the
case is discussed in footnote 2, paragraph 10.  Paragraph 12
deals with the total number of vehicles involved in the scheme.

       
pdf    

The second sample declaration is an (unsigned) Declaration of Supervising
Investigator Bradley Swartz, of New York DMV.  This declaration
is relatively complex and contains more information than is required
in most cases.  Mr. Swartz reports on interviews with 30 New
York City area dealerships which lead to the conclusion that consumers
lose half of what they paid for a vehicle if they sell it as a rollback
(paragraph 6). Information on average purchase price is in paragraphs
7 and 14. Average rollback information is in paragraph 9, note 3.
 Paragraphs 12 - 15 deal with the total number of vehicles
involved in the scheme.

CPB should be contacted if you need declarations from the publishers
of the Kelley Blue Book or NADA Used Car Guide explaining that their
valuations of used cars are based on vehicles bearing true mileage,
as opposed to vehicles that are known rollbacks.  To obtain
these items, please e-mail consumer.litigation@usdoj.gov
.  Be sure to include the word "odometer" in the subject line
of your e-mail.

 

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N) Motion to Authorize Disclosure to Consumer Victims of documents
Obtained During the Grand Jury's Investigation (6/96) 


A sample motion to file, if necessary, seeking a court order authorizing
the disclosure to the consumer victims of certain documents obtained
during the grand jury's investigation.  Normally such motions
are not filed, as victim notification takes place during the investigation
or sentencing process without any disclosure of grand jury material.

 

 

O) NHTSA Office of Odometer Fraud Investigations Staff; NHTSA Odometer Enforcement Case
Information Data Form (2004)

The U.S. Department of Transportation, National Highway Traffic
Safety Administration (NHTSA), Office of Odometer Fraud Investigations , conducts investigations
and provides assistance in odometer tampering matters. A listing
of the members of NHTSA's Office of Odometer Fraud Investigations staff is available from
the above website. NHTSA's Office of Odometer Fraud Investigations staff is available to provide
technical assistance concerning ongoing investigations. Please email
CPB at Consumer.Litigation@usdoj.gov and be sure to put the word "ODOMETER" in the title of the email if you need to contact NHTSA's
Office of Odometer Fraud Investigations staff, and do not know whom to call.  Timely
transmission to NHTSA's Office of Odometer Fraud Investigations staff of information about
case investigations will assist in the tracking of ongoing investigations
nationwide.

 

 

P) National Odometer and Title Fraud Enforcement Association
(NOTFEA) Officers and Directors (2004) 

The National Odometer and Title Fraud Enforcement Association (NOTFEA)
is a national association of law enforcement agents who seek to
eliminate fraud in the automobile industry, thereby protecting consumers.
Among other things, NOTFEA has an annual conference in which agents
receive intensive training relating to investigative techniques,
intelligence data, and legal theories used nationwide to detect,
investigate, prosecute, and deter odometer, title, and salvage fraud.
 NOTFEA maintains a web site with useful information about
the organization at http://www.notfea.org
.

 

 

Q) DOJ Consumer Protection Branch Attorneys (2004) 

If you are a federal, state, or local investigator who needs further
information about odometer tampering prosecutions and do not know
whom to call, please e-mail consumer.litigation@usdoj.gov.
  Be sure to include the word "odometer" in the subject line
of your e-mail.

 

Odometer Fraud/Altered Securities Investigations

Within the Department of Justice, the Consumer Protection Branch (CPB)
is responsible for prosecuting the federal odometer laws, 49 U.S.C. §§
32701-32711. Pursuant to 28 C.F.R. § 0.45(j), the Attorney General
designated CPB as having primary jurisdiction over all odometer fraud cases,
and this Office has obtained hundreds of odometer fraud convictions throughout
the country. CPB attorneys are available to lend advice and assistance in
investigating and prosecuting odometer fraud cases.

To assist in the nationwide coordination and investigation of odometer
fraud/altered securities investigations, the Department of Transportation's
National Highway Traffic Safety Administration (NHTSA) has established
an Odometer Fraud Staff. In addition to conducting their own investigations,
NHTSA's Odometer Fraud Staff serves as a nationwide clearinghouse of information
relating to odometer fraud investigations. The Odometer Fraud Staff also
can provide investigatory assistance to agents who are conducting odometer
fraud investigations.

Computer Software

Agents conducting odometer fraud investigations should also obtain VIN Assist
from the National Insurance Crime Bureau. This software can be used to verify
that the VIN appearing on a document is correct. VIN Assist can also be
used to help identify the correct VIN when only a partial VIN is available.
The software is available only to law enforcement agents, and can be obtained
free of charge by writing the National Insurance Crime Bureau, Information
Services Division, 10330 South Roberts Road, Palos Hills, IL 60465; (708)
430-5697.

Additional Briefs

The Consumer Protection Branch also has on file legal briefs that address
issues that often arise in odometer tampering investigations. These include
briefs on issues addressing why the fifth amendment does not shield individuals
from having to comply with grand jury subpoenas for records (such as odometer
statements) required by law to be maintained; why the fifth amendment does
not shield corporations regardless of size from having to comply with grand
jury subpoenas for corporate records; why alterations of title documents
and reassignment of title documents constitute securities violations under
18 U.S.C. §§ 513 and 2314; and how the mail fraud statute, 18
U.S.C. § 1341, can be used against an odometer tamperer even when the
only use of mail is the mailing of a certificate of title to the ultimate
purchaser of the car. CPB also has on file model jury instructions which
can be useful during the prosecution of these cases. Please e-mail consumer.litigation@usdoj.gov to
obtain copies of these materials. Be sure to include the word "odometer"
in the subject line of your e-mail.

Procedures

During the investigative stages, consultation with NHTSA's Odometer Fraud
Staff and/or an CPB attorney may be advisable. The Odometer Fraud Staff
will ensure that multiple investigations concerning individuals or dealerships
are not simultaneously being conducted by different law enforcement agencies
in various parts of the country. CPB attorneys are available to support
a prosecution effort and/or aid in obtaining the assistance of a local United
States Attorney's Office to do the same.

Once a federal case has actually been indicted, CPB would like to receive
copies of the indictment itself, as well as all briefs and court orders
that relate to the substantive law in this area.  We will make them
available to other AUSAs or local prosecutors who may face similar issues.

Finally, upon obtaining convictions or guilty pleas, CPB attorneys or
the above materials should be consulted concerning the government's position
at sentencing. CPB is attempting to ensure that the government's position
concerning valuation of the fraud caused by odometer tampering is treated
uniformly. In part, this has involved convincing district courts that
a valuation of fraud determined simply by comparing the difference between
purchase price paid by the defendant and the sale price he or she received
is inappropriate and grossly understates the value of the fraud. This
is true for several reasons--not the least of which is the fact that the
cars with altered odometers must be "branded" as such, and thus have marginal
resale value.