May 20, 2022

Botu Linum

The Car & Automotive Devotees

Lawmakers grill TxDMV over paper license plate fraud, a ‘black eye’ for state

4 min read

AUSTIN (KXAN) — The new head of the Texas Department of Motor Vehicles took a bruising during an interim hearing at the Capitol on Tuesday which criticized the agency’s handling of the paper license plate problem and called it a “black eye for the state of Texas.”

“As painful as it may have been to see our agency in the media and receiving those black eyes,” said TxDMV Acting Executive Director Daniel Avitia, “I will say that being in the media was part of the solution; it was the awareness they provided.”

During the interim hearing, House Transportation Chair Terry Canales demanded to know why the agency was slow to respond to out-of-control temporary tag abuse. He asked why there was “inaction,” why it took the media to uncover the problem and why the TxDMV was slow to respond.

‘Thank God the media covered it’

In the wake of a series of ongoing KXAN investigations into phony car dealers infiltrating the TxDMV’s system to fraudulently mass-produce temporary license plates, state lawmakers are again tackling the crisis. The issue has ballooned into a $200 million nationwide black market that, according to the Travis County Constable’s office, is “the number one safety issue” facing law enforcement today.

“Thank God the media covered it,” said Canales. “Because it’s rampant.”

Canales wants to know why the agency didn’t immediately implement HB 3927 after it passed last year. The 2021 law gave the TxDMV the tools to instantly cut off car dealers suspected of fraud. Avitia noted the tag issue was a priority for his predecessors — including former executive director Whitney Brewster who resigned in February — “amongst many other priorities.”

Since January, more than 30 car dealers suspected of fraud have been cut off from the TxDMV web dealer system, he said.

“Your response is eloquent but it doesn’t answer my question: Why did it take so long?” Canales asked, again, frustrated. “I’m not here to shoot the messenger. But, at some point, somebody’s got to answer to this committee and the legislature as to why it would take so long, and why the media has to be the ones to uncover it, so that the agency we gave directive to can actually do something?”

“Chairman Canales,” Avitia responded, “it’s a very valid question.”

While Avitia says his agency has made strides recently to crack down on fraud, he acknowledges needs to be done. That includes a vote in June to fingerprint car dealers when they apply for and renew their licenses. He says that would eliminate more than 90 percent of the problem.

The House Transportation Committee at the start of Tuesday’s interim hearing (KXAN Photo/Matt Grant)

‘Systemic failure’

“This is a systemic failure,” said Sgt. Jose Escribano with the Travis County Constable’s Office and one of the leading experts in the state on tag fraud.

Escribano said he’s waited four years for this hearing and the chance to tell lawmakers “the whole scope.” He told the committee that more law enforcement training, task forces, and resources — including fingerprinting and VIN verification — are needed to fight back.

“We are here, make no mistake,” Escribano told lawmakers, “because of the news media.”

“[Because] you guys [KXAN] went ahead and started on this and didn’t let up, which is a good thing, we’re here now” at the Capitol, Escribano said after the hearing ended. “If it wasn’t for that [your reports], I’m telling you right now, we wouldn’t be here.”

In March, House Speaker Dade Phelan’s office told KXAN that this issue “is going to be a priority for Texas House members to take up.”

In recent months, the TxDMV has enacted new measures that law enforcement said helped bring the mass-producing of paper tags to a “screeching halt.” However, authorities say more needs to be done.

TxDMV spokesperson Adam Shaivitz previously told KXAN his agency “looks forward to working with the legislature” on the interim charges.

“We are excited to share the progress already made on temporary tag process improvements,” said Shaivitz back in March, “and to have a robust discussion about additional actions the state can take to further prevent criminals from abusing the system.”

At the hearing, Avitia told the committee his agency has reached out to all 50 states for advice. The agency is considering a “redesign” of the tag system that could include new security features like QR codes, varying colors and stickers. Also on the table, is scrapping the paper material altogether.

Escribano calls that the “nuclear option.”

“Other states have plates and they haven’t had the problems that we have. We are very lax,” he said. “Tying those [loose ends] up or blow the system up. That’s your option.”

https://www.kxan.com/investigations/texas-lawmakers-tackle-paper-license-plate-fraud/