In odometer fraud prosecutions, it is almost always possible to charge mail or wire fraud (18 U.S.C. §§ 1341, 1343). This is because rollback schemes typically involve various types of mailings or wire communications that further the illegal activity. For example, titles may not be present at an auction on the day that a car is purchased, and the auctions frequently mail them to the purchasers. In addition, it is common for dealers to use bank drafts when buying cars. In such a situation, a bank will hold the title until the dealer reimburses the institution for the money advanced; upon receipt of those funds, the bank will mail the title to the dealer. Finally, virtually every state mails new titles to the ultimate purchasers of vehicles. The Supreme Court has held that such mailings satisfy the mail fraud statute's requirement that mailings be in furtherance of the scheme. See Schmuck v. United States, 489 U.S. 705 (1989).
Several cases have held that the foreseeability requirement for mail fraud was satisfied by mailings of this nature. United States v. Shryock, 537 F.2d 207, 209 (5th Cir. 1976) (defendant in mail fraud prosecution stemming from odometer rollback claimed that he did not mail anything and that "he did not know that" state DMV would mail anything -- defense unavailing because defendant had been in the business for years and could reasonably foresee that mails would be used at some point in title transfer process), cert. denied, 429 U.S. 1100 (1977); United States v. Locklear, 829 F.2d 1314, 1318 (4th Cir. 1987) (evidence that defendant was veteran of used car business and well-acquainted with paperwork generated by automobile sales made it reasonably foreseeable to him that DMV would mail titles to downstream purchaser of vehicle with rolled odometer, so defendant caused mailing as required for mail fraud conviction); United States v. Galloway, 664 F.2d 161, 163-65 and n.6 (7th Cir. 1981) (reasonably foreseeable to used car wholesaler in odometer rollback scheme that mail would be used to obtain new titles after he sold cars with altered odometers, so title-related mailings satisfied mail fraud element), cert. denied, 456 U.S. 1006 (1982). The Supreme Court cited all three of these cases with approval in Schmuck, 489 U.S. at 712 (holding that mailing by defendant's customer of title application to DMV in odometer fraud scheme satisfied the mailing requirement). See also United States v. Waldrop, 786 F. Supp. 1194, 1202 (M.D. Pa. 1991) (jury could find title mailings were foreseeable to defendants who were experienced in selling used cars), aff'd 983 F.2d 1054 (3d Cir. 1992), cert. denied, 113 S. Ct. 2440 (1993).[FN1]
FN1. Defendants sometimes rely upon United States v. Smith, 934 F.2d 270, 273 (11th Cir. 1991), where the mailing was not foreseeable because the company's practice of mailing copies of its accounting drafts was "not common knowledge." But in reaching this conclusion, the court considered a host of factors quite different from those in odometer-fraud cases. Smith relied on testimony from the insurance agent who did not tell the defendant that any kind of information would be sent through the mails, the fact that the defendant was not familiar with the operating procedures of insurance companies, trial testimony showing that the defendant could not read, and the fact that the government never contended that the defendant had any part in coordinating the scheme. Id. at 272-73. Unlike the defendant in Smith, the defendants in odometer fraud cases are generally quite familiar with the used car industry and the paperwork associated with transferring vehicles.
Those involved in odometer tampering also frequently alter titles or fraudulently procure replacement titles in order to conceal the fact that a vehicle has previously been sold at high mileage. Possessing, uttering, or making a forged, altered, falsely made or counterfeited title violates 18 U.S.C. § 513. Transporting such a title in interstate commerce violates 18 U.S.C. § 2314. Motor vehicle titles are "securities" within the meaning of these statutes. See 18 U.S.C. §§ 513(c)(3), 2311. A title is "falsely made" even if it is genuine, but contains false information or has been fraudulently procured. See Moskal v. United States, 498 U.S. 103, 111 S. Ct. 461 (1990).
[updated July 2003] [cited in USAM 4-8.310]