Car Owners Handing Keys to Thieves

ByABC News

June 26, 2003 -- — Conventional auto thieves might break into a stranger's car, hotwire the ignition and take off, but now many have advantages to streamline the process — car keys and directions from the car's owner.

Robert Bryant, of the National Insurance Crime Bureau, says "owner give-ups" — where people arrange to have their vehicles stolen for insurance purposes — are a multi-billion dollar fraud that's passed on to every driver in higher insurance premiums.

Behind the fraud, Bryant believes, is the popularity of car leasing. Attractive terms make it easy for people to drive expensive vehicles. But with the downturn in the economy, many can't make their payments.

"They need to unload the car because they can't afford it," Bryant said. "And they dispose of the vehicle and then collect the insurance money."

Vincent Ancona, a lawyer in New York City who has represented more than a dozen people convicted of give-up fraud, said most of his clients saw nothing wrong with ripping off their insurance company for tens of thousands of dollars.

"I've had stockbrokers, I've had commodity brokers, I had a chiropractor once," he said. "I've had one individual who was taking an exam for the police department.

"They look at it as sort of that innocent crime — same way you and I would look at walking across the street jaywalking," he added. "People find themselves paying a lot of money to insurance companies every year. And those premiums year after year seem to go up instead of going down. … And to them, I think it's their version of getting payback.

Regional Variations

In different parts of the country, there are different ways to make cars disappear.

In New York City, cars are taken to illegal chop shops, where the parts are stripped off and sold.

In Miami, owners pay middlemen to dump their vehicles in one of the area's many lakes or canals. Police say in the last few years they've dredged up thousands of cars believed to be give-ups.

And in Orlando, the method of choice for get ridding of cars is arson. Alan Kaye, an investigator for the Florida fire marshal's office, estimates that more than 300 cars torched in the Orlando area last year were give-ups.

Hidden Cameras

Over the years, arson investigators in the Orlando area convicted dozens of car owners of give-up fraud. But they were never able to catch the middlemen who set the fires until they got a solid lead on a suspect and decided to target him in an undercover sting operation.

The operation, in which ABCNEWS' Primetime was allowed to install hidden cameras inside a Ford Explorer used as a "bait vehicle" — turned out to be a case study of how the scam works.

It began when Kaye arrested a car owner — a now-fired ex-maintenance supervisor at a major airline — and convinced him to identify the person he paid to destroy his car.

The arrested car owner set up a meeting with his middleman, saying his sister wanted to get rid of her car. The "sister" was actually an undercover policewoman wearing a hidden camera.

The "sister," the former airline maintenance supervisor and the middleman all met at a shopping mall parking lot. On a surveillance tape, the middleman got down to business, telling the undercover officer exactly where to leave her Explorer — a location "under the trees … around no cars … where it's all dark."

‘I’ll Take Care of Everything’

According to Kaye, the middleman was part of a loose-knit group of street crooks who charged owners a fee of $200 to burn their cars. Apparently, it was a good night.

"I'll take care of everything tonight," the middleman said on the tape. "I got three more cars, you know, tonight."

The middleman told the undercover officer not to file a theft report too quickly — suggesting she wait until mid-afternoon the next day.

"He wanted to make sure that he didn't get caught driving in it if she reported it stolen right away," Kaye said.

At 6:30 p.m. that evening, the Explorer was driven to the drop-off point.

At 8:30 p.m., the camera showed the middleman getting into the Explorer, and searching for, finding and counting $200 cash behind the visor.

With a getaway car driving nearby, he drove out of town, apparently unaware he was being followed by law enforcement.

Outside of town, he doused the front seat with gasoline and flicked in a lighter. The middleman appeared puzzled when the car did not ignite, and decided to abandon it, heading back to town in the other car with his partner.

Soon police swarmed in and arrested them, and the middleman eventually pleaded guilty to attempted arson, a third-degree felony.

R.J. Corporation

In New York City, theft reports were filed for 30,000 cars last year, and of those, "we estimate 25 percent of all the reported stolen cars in the city are give-ups," New York Police Department Lt. Tom Cullen said.

Those recently charged with give-up fraud include a stockbroker, a doctor's assistant, a schoolteacher and a New York City firefighter.

With so many cases, New York City police also set up a sting. Undercover officers rented a vacant lot in the Bronx and set up a trailer there. Through informants, they put out word on the street that they could make cars disappear — no questions asked.

It looked, smelled and sounded like a chop shop. The police even gave it a name — R.J. Corporation — a coy reference to the initials of Robert Johnson, the Bronx district attorney.

Once word spread, the R.J. Corporation did a brisk business. One car after another was brought into the phony chop shop, or to other undercover police shops like it. The owners would file theft reports stating their cars were stolen a few days later. But, of course, the police already had the cars in their possession.

"We have your car, we have your keys, we have the video and we have your statement indicating that you lied," Cullen said. "It's pretty strong evidence. … We still have a 100 percent conviction rate."

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