PHOENIX – Detectives with ADOT’s Office of Inspector General have arrested a car dealer employee for allegedly committing numerous thefts against his Phoenix-based car dealership and its customers.

Eduardo Rodriguez was employed at a few used car dealerships in Phoenix. He sold dealership cars to customers and after collecting cash payments, the allegations include that Rodriguez kept payments instead of turning them into his employer. Additionally, Rodriguez would sell the same car to more than one customer and pocket the cash payments. He would also sell customers bogus warranty policies. 

All three dealerships eventually discovered the numerous thefts he had committed and contacted ADOT’s Office of Inspector General. ADOT detectives learned Rodriguez purchased a vehicle from one of the dealers he worked for and financed it. A few days after buying the vehicle with the provided financing, Rodriguez sold the vehicle privately to an unsuspecting victim. Because Rodriguez defaulted on the loan, his former employer was required to buy it back. 

ADOT detectives also discovered the other instances of theft against the dealerships and customers. Rodriguez was arrested and charged with fraud schemes, theft and forgery. 

Generally speaking, when it comes to buying a used vehicle either from a used car dealer or in a private sale, ADOT recommends taking time and asking lots of questions and doing your research. There are no dumb questions in a big purchase like this. If the seller is acting suspiciously, being evasive or uncooperative, walk away. Take the time to find the right purchase.

Tips can be found on ADOT’s website at azdot.gov/CarBuyingTips. 

PHOENIX – Working to protect people around the country from fraud involving used cars, state investigators have broken up a major criminal operation based in the East Valley that illegally produced tens of thousands of titles for vehicles being sold in 42 states.

With seven arrests made on Wednesday, Feb. 19, this is by far the largest operation broken up since Governor Doug Ducey signed legislation in 2018 creating the Arizona Curbstone Enforcement Joint Task Force, which combines the resources of ADOT’s Office of Inspector General, Arizona Department of Revenue and Arizona Independent Automobile Dealers Association. This task force combats vehicle sales made in violation of state laws governing dealer licensing, a practice known as curbstoning.

“Our partnership with the Department of Revenue was invaluable by bringing their investigators in to assist,” said Lt. James Warriner with ADOT’s Office of Inspector General, part of the agency’s Enforcement and Compliance Division. “Together, our agencies are delivering a one-two punch to stop curbstoning and illegal vehicle sales in Arizona.”

The case involves a scheme in which individuals allegedly subscribed to one of several websites identified by investigators to obtain wholesale and retail dealer license credentials from the suspects, rather than the state, for a monthly fee, usually in the hundreds of dollars. These credentials allowed about 1,500 individuals to attend and bid on vehicles at wholesale auctions in their states.

The operation also altered vehicle titles from these subscribers for about $100 per title to make it appear as though the individuals bought the vehicles from one of the suspects’ 31 operations with dealer licenses. More than 31,000 titles were processed this way over the past couple of years, and many of the vehicles involved were never in Arizona.

The operation has generated around $7 million fraudulently over the past couple of years.

ADOT detectives and Department of Revenue investigators, joined by special agents with the Arizona Attorney General’s Office, served search warrants at six locations last week, including homes in Chandler and Gilbert and at a storefront in Mesa, arresting the suspects and searching for further evidence. Each suspect is facing multiple charges, including the felonies of fraudulent schemes and artifices, money laundering and tax evasion.

Curbstoning involves selling vehicles in a way that violates the parameters set by a dealer’s license. That could mean selling more than six vehicles in a consecutive 12-month period for an unlicensed dealer, or selling vehicles away from the designated area of sale for a licensed dealer.

In this case, licensed dealers are accused of illegally consigning their licenses out to other individuals in other states, allowing those individuals to bypass paying taxes, registration fees and laws regarding vehicle dealers.

Curbstoned vehicles typically involve other violations such as title fraud, odometer fraud and covered-up flood damage. Consumers in the market for used vehicles should do their homework before handing over any money.

When dealing with cases of curbstoning, ADOT detectives will share case information with Department of Revenue investigators and even bring them along to check out curbstoning sites.

In addition to fraud by licensed and unlicensed dealers, detectives with ADOT’s Office of Inspector General investigate identity theft, fraud involving vehicle title and registration, and support investigations by state, local and federal law enforcement.

PHOENIX – After hurricanes that caused widespread flooding in Texas and Florida, Arizonans in the market for used cars have even more reason to pay close attention to a vehicle’s condition and history, especially in private sales.

As happened after Hurricane Katrina in 2005, vehicles damaged by floodwater are likely to find their way to Arizona and other states and offered to unsuspecting buyers.

If a vehicle is flood-damaged, the title should say “salvage” or “flood damage.” But scammers can and do fraudulently remove flood history from vehicle titles.

“We want to make sure potential buyers remain vigilant when looking at used vehicles and not sign anything until the vehicle has been checked over bumper to bumper,” said Willie Hall, detective sergeant with ADOT’s Office of Inspector General, which investigates fraud involving titles and vehicle sales. “Flood-damaged vehicles that have been repackaged and dressed up are a common scam after major weather events like what we’ve seen recently.”

Potential buyers should closely inspect vehicles and be prepared to walk away if things don’t smell right – quite literally in some cases.

• Check out all of the vehicle’s nooks and crannies. Look inside under the carpet and floor mats and examine the trunk for dirt, silt and mold. Check under the dashboard and other hard-to-reach places as well. Criminals usually don’t clean all of those places. Finally, take a good whiff in those areas. Water damage leaves a distinctive smell.

• Check the electrical and mechanical components. Water wreaks havoc on electrical systems, so check to see if any of those systems aren’t working quite right. Also check the engine for signs of rust or even random new parts. Get under the vehicle and check the suspension for water damage. Any of those things could be a sign that you’re in danger of buying a flood-damaged vehicle.

It’s always a good idea to have any used vehicle you’re looking at buying checked out by a trusted auto mechanic.

A vehicle identification number can be used to obtain the vehicle history through an online service that may charge a fee. This check can uncover a vehicle’s status as “salvage” or “non-repairable,” as well as maintenance problems, collisions, insurance claims and titles issued in other states.

Generally speaking, when it comes to buying a used vehicle in a private sale, it’s important to take the time and ask lots of questions. There are no dumb questions in a big purchase like this. If the seller is acting suspiciously, being evasive or uncooperative, walk away. Take the time to find the right purchase.

Additional tips can be found on ADOT’s website at azdot.gov/CarBuyingTips.

Seek help if you’ve been scammed. ADOT is here to help victims of fraud involving vehicle titles, registrations and driver licenses. Call our 24-hour fraud hotline at 877.712.2370 or email [email protected].