Temporary influx of paper license plates persists in Texas

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KPRC 2 Investigating the epidemic of paper license plates in our states. Last month, we explained how the Texas Department of Motor Vehicle’s lax registration system gives criminals a key to the temporary license plate portal, allowing them to print and sell millions of labels.

This is an issue the DMV has been experiencing since 2017. So why is the agency taking so long to resolve the issue?

Texas plaque problem spreads across the country

Murders, Driving, Thefts and Hit and Run: When we discussed how many crimes are committed using fraudulent Texas temporary tags so that criminals can easily flee the scene, we were only talking about incidents at Houston. However, police as far away as New York say it is also inundated.

“They’re all over New York City,” NYPD Auto Crime Unit Detective Daniel Gallagher told investigative reporter Amy Davis, referring to the temporary paper license plates from Texas. “I know other states close to us or New Jersey, probably Connecticut, have the same issues. They are all over the northeast.

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Texas paper tags are purchased online, printed, and affixed to vehicles suspected of crimes across the country.

FBI Special Agent Brannon Coker in the Houston office said his colleagues in other states are all asking for the same.

“Usually the first question when they contact me is, ‘What’s going on in Texas? Why are these temporary Texas beacons all over our cities and states? ‘ “

How’s it going

Only authorized Texas car dealerships have access to the DMV Temporary Label System. When dealerships sell a vehicle, they can print a paper plate for the customer that is only valid for 45 days until they can get a permanent license plate. Getting a dealer license is as easy as paying $ 900 and filling out an online application. Police say the problem is people are applying for reseller licenses using fake and stolen identities. The DMV checks the background of the person the applicant claims to be, never confirming that they are indeed who they claim to be. The companies that obtain the licenses and access the portal of the temporary plates are fake.

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“They are basically just fictitious dealers,” Coker explained. “They don’t exist in reality. They only exist to sell the tags.

They sell millions of paper labels for around $ 100 each. Coker’s investigation led to the indictments of three people who he said opened fictitious car dealerships and sold some 580,000 paper plates through Facebook ads. The Texas Department of Motor Vehicles issued the dealer licenses that allowed the fraud.

Issue reported to DMV in 2017

While cardboard plate fraud increased exponentially during the COVID-19 pandemic, it started as early as 2017. It was at this point that KPRC 2 Investigates exposed the problem with lax systems at the DMV. We sent an undercover photographer to buy a temporary tag at a house in Houston. We then took the plate we bought to Jeremiah Kuntz, then director of the titles and vehicle registration division of the DMV.

“We found out that it was issued through our system,” Kuntz told investigative reporter Joel Eisenbaum. Kuntz said that a dealer authorized by the DMV issued plates through someone else with whom he shared access to the portal. When Eisenbaum asked Kuntz how the DMV verifies that the people issuing the plates are who they claim to be, Kuntz replied, “We have no way of validating this. “

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Kuntz is no longer employed by the DMV, but DMV Executive Director Whitney Brewster has been in her post since 2012. She repeatedly turned down our requests for interviews in 2021, saying she did not want to interfere with them. ongoing investigations. At the same time, law enforcement officers in charge of these investigations were discussing with KPRC 2 Investigates the problem which they believe makes their work more dangerous.

What the DMV is doing about the problem

The Department of Motor Vehicles has argued that it lacks the power to demand a more rigorous application process that could help weed out some of the bad actors peddling paper plates. During the 87th Session of the Texas Legislature, lawmakers introduced HB 3927, designed to give the DMV more power to change the dispensing system.

After several amendments and protests from the Texas Auto Dealers Association, the bill was watered down but still gave the agency more authority to resolve the issue. HB 3927 also allows the DMV to almost immediately revoke the licenses of dealers caught in the fraudulent sale of cardboard plates. In the past, the revocation process could take up to a year. The bill was enacted on June 15 and finally came into force on September 1, 2021. The only rule change that the DMV has proposed to date is to use an algorithm to limit the number of paper labels it has to offer. a dealer can issue. New resellers would be limited to around 900 paper plates each year. The DMV is currently accepting public comment on this proposed change until December 13. Once the public comment period is over, the DMV will reconvene to vote on the adoption of the new rule at its public meeting in February.

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If passed, investigators say this new rule limiting temporary beacons will do little to solve the problem. The DMV will always issue reseller licenses to bogus companies that will just take out more licenses in order to sell more temporary labels. These same investigators, at the local and federal levels, asked the DMV to take the fingerprints of applicants to car dealerships.

“Fingerprints are the best way to 100% identify a person’s identity,” Coker said. “And so, if there is any question as to who is applying for these licenses, fingerprints would be a good way to sort it out.”

Confront the executive director of the DMV for answers

When DMV’s executive director refused our repeated requests to talk about the issue, KPRC 2 investigative reporter Amy Davis confronted her at a public meeting of the DMV board of directors. She agreed to speak on camera after the meeting.

“Four years to solve a problem and we still don’t have a solution?” Davis asked.

“We absolutely have a solution and it’s thanks to HB 3927. We’re going through the rulemaking process and we’re going to implement it ASAP.”

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While Brewster said she viewed limiting the number of temporary labels to each dealer as the first of many steps needed to resolve the issue, she said she didn’t believe her agency had the power to demand of candidates that they submit their fingerprints. Many government agencies that issue professional licenses require fingerprints during the application process. The Texas Government Code (Chapter 411.122) seems to say that the DMV has authority.

Brewster said the fingerprint requirement may require legislative approval. The next legislative session will be in 2023. Brewster said the DMV authorizes more than 20,000 car dealerships.

“We also need to be mindful of those who are good, honest, legal companies trying to operate in Texas,” Brewster said.

“How would good actors be hurt if you asked them for fingerprints?” Davis asked.

“Well, it would be a requirement for them to pay for the fingerprints and then have their fingerprints taken to their staff before they could even get a license. “

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Fake dealers move at lightning speed. Bureaucracy at a snail’s pace.

Fraudulent resellers work fast. In just four months, Kasneils Auto LLC, which claimed to sell vehicles from a small batch on Lockwood, sold 236,642 paper tags. This represents 2,171 tags each day. When the DMV finally revoked Kasniels’ license in early November, another dealer already licensed by the state stepped up its issuance of temporary labels. MK Auto produced 33,593 temporary labels from November 8 to 22.

“It’s not in the hundreds of thousands and we are turning a blind eye to that,” Brewster said. “As soon as we detect them, we immediately begin the process of removing their access.”

“It’s fucked up,” Coker said. “We’re just going to shoot them down as they come and go after who we can and hope the laws are changed to make that more difficult.”

State senator calls for action

After our KPRC 2 investigation in early November, State Senator Paul Bettencourt said he started noticing all the paper plates on vehicles on the road.

“Frankly, Amy, after seeing your report, I called the president to make sure the DMV was taking it seriously,” Bettencourt said.

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He said the entire cardboard plate system should be overhauled.

“Why are we handing out a piece of paper that someone can run on a Xerox machine in the 21st century and make a change to it? Asked Bettencourt.

And after? What you can do

If you would like to make a public comment with the DMV on this issue and its proposed rule to limit the number of temporary plates dealers can issue, you can submit written comments by 5:00 p.m. CST on December 13, 2021. Submit by writes comments or hearing requests by e-mail to [email protected] or by mail to the Legal Counsel’s Office, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, TX 78731. To read the proposed rules, go to the “Texas Register”, type “Texas Department of Motor Vehicles” in the space provided for “agency name”, then click “search.”

On December 16, a DMV committee will meet to discuss the comments received from the public. The entire board will vote to adopt the new rule at its next board meeting in February in Austin.

Copyright 2021 by KPRC Click2Houston – All rights reserved.

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