Investigators – NBC 5 Dallas-Fort Worth
Investigators believe a car dealership denounced by NBC 5 Investigates on Monday, suspected of illegally selling paper license labels and then shutting down by the state on Tuesday, is already operating under a new license.
Law enforcement officials told NBC 5 Investigates on Wednesday that the case exposed major loopholes in a new state law that is supposed to help prevent fraudulent auto dealerships from raking in millions of dollars. illegal profits.
In our Monday report, we showed how quickly NBC5 Investigates spotted a dozen paper labels in two Dallas neighborhoods printed by Houston car dealership Kasniels Auto.
We knew Kasniels’ labels were suspect because of what we learned from a special police unit investigating paper label fraud.
âIt’s wide open. It’s all wide open right now, it’s wide open, âsaid Assistant Constable Sgt. Jose Escribano, from the Travis County Constable’s Office, Ward 3.
Travis County agents told NBC 5 Investigates they reached out to someone willing to sell them a Kasniels tag online.
An undercover agent gave the seller the name of senior investigative reporter Scott Friedman, a fake VIN, and a home address that was actually the home of the Dallas Cowboys – AT&T Stadium in Arlington.
The detective did not make the purchase, but the fake tag was entered into the state system by someone using Kasniels’ dealer license.
The DMV records we obtained show that Kasniels printed over 73,000 paper labels this year.
Investigators said there was no way the company, which claimed to operate from a small parking lot in Houston, had actually sold 73,000 cars.
They think the company sells labels for profit.
A day after our report aired, the Texas DMV told us it had revoked Kasniels’ reseller license.
But then Wednesday, just a day later, another twist.
âThey closed this one. They activate one of their others. And here we go again, âsaid Escribano.
Travis County investigators told NBC 5 Investigates that they purchased a paper tag on Wednesday morning from a dealership called Southwest Autos LLC and said their investigation revealed that the person selling Southwest tags had also sold Kasniels labels.
Evidence, they said, is that the state must identify people applying for in-person reseller licenses and fingerprints to prevent fraudsters from operating under multiple business names.
âThe party would be over for them, because now I have the person on the other end of the phone. I have a natural person who I can go and have a conversation with, âEscribano said.
Under a new state law that came into effect in September, the DMV board is currently writing new rules to combat paper label fraud. But even under the proposed new rules, the agency would still have to wait 10 days to shut down a dealer suspected of fraud.
It’s too long, investigators fear, for bad actors to continue selling labels and getting a new license under another name.
âWe would like to close them now. Just like right away, unplug the plug, right? This second, âEscribano said.
The Texas DMV told NBC 5 Investigates on Wednesday that it was actively investigating Southwest Autos LLC.
In a statement, they said that “the department does not have the authority under state law to take fingerprints from applicants. However, the department continues to explore additional steps.”
We contacted a phone number Southwest Autos provided to the DMV. The person who replied to our message told us that they had no connection with Southwest Autos.
Messages sent to Kasniels were not resent.
The DMV told NBC 5 Investigates that it is taking action to see if dealership owners are connected to other dealerships. But as we reported earlier, the DMV also allows auto dealers to add authorized users to their accounts – people who can print labels in the state system but are not vetted.
Investigators we spoke to said this needs to change and anyone who can gain access to the system should be vetted carefully by state officials.