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