Crooks print real DMV temp tags to cover up crimes. Where’s the oversight?

Investigative Summary:

A KXAN investigation found criminals have the ability to access the Texas Department of Motor Vehicles’ dealership database with relative ease. The result is a $200 million criminal enterprise where real temporary tags, with fake information, are printed and sold to all 50 states, giving violent criminals the ability to hide from law enforcement in plain sight. Our investigation explores how effective TxDMV’s oversight measures are and what it can do in the future.

AUSTIN (KXAN) — Sgt. Jose Escribano glances down at his laptop, then back at the road. He’s scanning Austin’s streets looking for what some in law enforcement call “ghost cars.”

It doesn’t take long to find one: a white 2004 Chevrolet pickup truck with illegal temporary tags.

“He could not get that vehicle registered. He could not get that vehicle inspected,” Escribano said, after pulling the driver over and unscrewing the paper license plate the man said he bought for $100. “He said, ‘I had no other choice.’”

Escribano is with the Travis County Constable’s Office Precinct 3 and one of the leaders in the state when it comes to finding, and fighting, Texas’ fraudulent temporary tags. In recent years, he estimates this has ballooned into a $200 million black market criminal enterprise.

“It makes it extremely difficult for law enforcement,” he said. “You become anonymous.”

image of a NYPD police bulletin with information about a counterfeit tag found, featuring an image of Santa with a fake tag

Internal NYPD police bulletin, obtained by KXAN, warning about fraudulent Texas tags. Even Santa Claus is jokingly depicted with one. (New York Police Department Photo)

A ‘flawed’ system

Police say illegal temporary tags make their jobs more dangerous and puts the public at risk. For four years, KXAN has investigated fake temporary license plates used by criminals to cover up crimes.

In 2018, the Texas Department of Motor Vehicles said new security measures, including watermarks, would make them harder to copy and fix the paper plate problem. It didn’t. Illegal tags have allowed violent criminals to hide in plain sight, Escribano said, arguing this has now grown into a national safety threat.

A KXAN investigation found the TxDMV is approving car dealership licenses for individuals using stolen IDs and photoshopped photos of car lots that exist only on paper, according to Escribano and a review of internal law enforcement records.

It costs $880 to get a car dealership license in Texas.

But these phony dealers aren’t selling cars, Escribano and the FBI say. Rather, they’re able to access the state’s webDEALER system. That allows them to generate real temporary tags that, when scanned by law enforcement, can contain fake names, addresses and Vehicle Identification Numbers.

The tags are created in the TxDMV’s electronic tag online portal. Licensed car dealers are given access to the password-protected portal where tags are created when cars are sold. The dealer manually enters the vehicle and buyer information to create the buyer’s tag. That information is automatically shared with the Texas Law Enforcement Telecommunication System, in real time, which can then be accessed by law enforcement across the country.

That is a problem when the information the tag contains is all wrong.

“The application process is completely flawed,” said Escribano, who has been calling for more oversight for years. “Completely flawed.”

Internal records shared with KXAN show one name entered into the TxDMV website as: “BBB B, JDJDJDJ, JDHDLL, BBDNN, TX, 78666.” We also found a VIN approved by the state even though it’s a website — “https://webdealer.txdm” — real VINs do not contain special characters.

The tag Escribano confiscated is from Kasniels Auto Sale LLC in Houston. The Space City has become a hub for fraudulent tag production, Escribano said.

In May, the Justice Department indicted three Houston residents for using a fake car dealership to sell 600,000 paper tags across the country without selling any cars. The DOJ says illegal tags “pose a danger to the public and law enforcement” because buyers use them to avoid registering their car, getting it inspected, liability insurance and to “hide their entities” from police.

The state shut down Kasniels on Nov. 8, according to Escribano. However, in just four months of doing business, from July 22 to Nov. 8, the small blue house behind a black iron gate became the second busiest car dealership in the entire state of Texas, TxDMV records show. It produced a trove of 236,630 temporary tags.

A phone number associated with Kasniels Auto Sales went unanswered. KXAN left a message with a generic voicemail box.

Law enforcement surveillance photos of the house taken in September, compared to its August TxDMV application, show Kasniels either photoshopped a fake Kasniels Auto sign or quickly removed a real one as it cranked out temporary tags. Escribano calls them a “shell company.”

Kasniels Auto Sales LLC in Houston as seen in its application photo compared to law enforcement surveillance.

“The system is broke,” Escribano said. “It’s a safety issue for law enforcement. It’s a safety issue for the general public. Somebody hits you. Somebody commits a crime. Somebody hurts one of your loved ones. Who are we going to go after?”

Playing ‘Whac-A-Mole’

“A hundred dollars?” an undercover officer asks in Spanish.

“Yes,” replies the seller, Cesar Sifuentes-Aguirre, who drove to the Walmart on North Interstate 35 in Austin in February 2020 to make a sale, according to body camera and undercover video.

An undercover officer and seller eventually settle on $95 for a real temporary tag produced fraudulently. As soon as the cash is exchanged, a nearby officer says into his radio: “Alright, done deal. Done deal.” Within seconds, lights are flashing, the suspect’s car is blocked in and guns are drawn, according to multiple body-camera videos obtained exclusively by KXAN.

“Please, your hands, please,” Escribano is heard saying in Spanish as he handcuffs the suspect.

It’s an aggressive approach and a first look at how seriously law enforcement takes this type of threat. Sifuentes-Aguirre had “over 40” fraudulent tags in his truck, according to court records. Authorities later found 459 fraudulent tags that he sold in his phone, netting him at least $43,605, Escribano said.

Sifuentes-Aguirre pleaded guilty to unauthorized reproduction and distribution of temporary tags and was deported, Escribano said, because he was in the US illegally. That charge is considered a state jail felony punishable by 180 days up to two years in prison and a fine of $10,000.

Producing fraudulent tags has become a booming $200 million black market business, Escribano says, and is often about more than just money.

From human trafficking and drug smuggling at the border to robbery, rape and murder, bogus tags are often tied to violent crimes. That includes two deadly drive-by shootings in Austin last year, according to sources. Police believe one of the suspects they said is involved, Manuel Huerta, is connected to nearly a dozen other shootings. He remains behind bars on nearly $1 million bond.

Paper tags were used on the getaway car when off-duty New Orleans police officer Everett Briscoe was shot and killed in Houston this summer. They were also used when Nassau Bay Sgt. Kaila Sullivan was killed in a hit-and-run during a traffic stop in 2019.

The suspects in both cases were caught and are awaiting trial.

“Give us a fighting chance and don’t let me sit here with one hand tied behind my back,” Escribano told TxDMV board members in October. “We’ve been doing this for three years now and, still, here we are.”

Escribano told board members directly they are not doing enough to stop this. He wants dealer applicants to be fingerprinted and car lots verified in person.

On Sept. 1, House Bill 3927 went into effect. The new law gives the TxDMV authority to quickly cut off access to its webDEALER database for individuals suspected of fraud. The move received praise by the New York Police Department, where Texas tags are being sold by the thousands, officials say.

“The goal of this initiative is to stop the purchase of fake and fraudulently obtained permits,” outgoing NYPD Chief Rodney Harrison said at a news conference about the tag problem back in June.

But Escribano isn’t convinced. He predicts criminals will keep applying for new licenses.

“Now,” he said, “we’re playing a so-to-speak Whac-A-Mole.”

Working on system defect, hoping to use new authority

The Texas Department of Motor Vehicles initially declined KXAN’s requests for an interview. At a recent board meeting, executive director Whitney Brewster agreed to speak with reporters and defended her agency.

“This is absolutely an emergency,” said Brewster, telling reporters she takes this issue “very seriously.”

Brewster says her investigators look for fraud weekly. She was asked why fake VINs are allowed into the state’s database, making it difficult for law enforcement to tell if a car is stolen or salvaged. It’s an issue KXAN has investigated for four years.

Brewster blamed a “defect.”

“We have a system defect that when you’re uploading the information versus manually entering that, it does not stop special characters,” she said. “That defect is being worked on now.”

Escribano says he alerted the TxDMV to this “defect” back in 2019 when shell company dealerships began popping up. Internal records shared with KXAN show falsified VINs were entered into the state’s system going back at least two years.

KXAN analyzed recent TxDMV data showing the number of tags produced by dealerships in Texas. Out of the top 20, half were fraudulent, according to a comparison of known illegitimate sellers obtained through a law enforcement source.

“Where is the oversight?” asked KXAN investigator Matt Grant. “How is this allowed to continue to happen?”

“HB3927 — prior to that we did not have the authority to be able to shut off bad actors quickly,” Brewster said. “We now have that authority.”

“What are you doing to verify that these dealers are actually legitimate?” asked Grant, who handed Brewster photos of several fraudulent dealerships. “We found, as have law enforcement, there are plenty of dealerships that are fraudulently operating and lying to you to get a license.”

“If there are businesses that law enforcement is detecting as being problematic, we would really appreciate them letting us know about those,” Brewster said.

“Would you physically inspect these locations as they’re submitting their applications?” Grant asked.

“We currently don’t. There is currently not a requirement for a mandatory site inspection,” she replied.

“Why not?” Grant asked.

“It currently does not exist,” Brewster said. “We are a complaint-based agency.”

Brewster said fingerprinting is “certainly an option.” Just not an immediate one.

“We have the authority to receive fingerprints from the Department of Public Safety,” she said. “However, we do not currently have the authority to request fingerprints from licensees … That would be something that would potentially be recommended to the legislature for change.”

A legislative change wouldn’t be able to come until 2023, when lawmakers reconvene.

The next day, Escribano and his task force purchased a fraudulent tag from an online seller in Grant’s name to show how easily it can be done. It was registered with a fake VIN, listing Grant’s home address as the Dallas Cowboy’s Stadium in Arlington. Another one, purchased from Kasniels, listed Grant’s home address as KXAN.

Both were purchased and emailed to undercover investigators within minutes, Escribano said.

Actual temporary tags are good for 60 days before you get your permanent license plate. That must be obtained in person, which is the only way you can know it’s legitimate.

After KXAN and others started asking questions, a TxDMV advisory committee met in Austin on Dec. 16 and voted unanimously to recommend stricter background checks for non-franchised car dealerships in order to cut down on fraud. The group is recommending the board fingerprint new dealer applicants at their expense and conduct on-site inspections to verify they are authentic — a move that would require additional resources.

The committee is also recommended the board limit the number of paper plates small car dealerships can print to 900 in a calendar year.

Escribano said unless dealers are fully vetted on the front-end, the plate problem will continue to spin out of control.

“We’re sworn to protect the people out here,” he said. “We can’t protect you like this.”

The Chair of the Texas House Transportation Committee Rep. Terry Canales (D-Edinburg) tells KXAN he is working closely with the TxDMV to “ensure the timely implementation” of HB 3927. He said he is also working with the governor to the state does “everything it can to fight the proliferation of illegal paper plates.”

“I am encouraging the TxDMV Board to not only adopt the proposed rules this winter but to adopt additional ironclad rules that ensure that these criminal enterprises are caught on the front end,” said Canales, “when they they unscrupulously apply for their dealer license.”

Canales has made a request to House Speaker Dade Phelan to issue an interim charge to the House Committee on Transportation to investigate this issue “in greater detail.”

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Austin-Travis County

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