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It is a problem that has reached global proportions. A 1996 Lexus is not safe; a 1973 Pinto is not safe. And while there are many deterrents built into the vehicles and the systems, there are no guarantees. Most distressing is the escalating number of stolen vehicles that are leaving US soil and heading for foreign destinations. The methods of theft are many, but the results are the same. The yearly economic loss to our nation is mind-boggling.
The National Insurance Crime Bureau has established a special office in Dallas. Headed by Joe Pierron, Director of International Operations, the office staff communicates with various foreign countries on any given day. Their mission? To recover stolen member insurance company vehicles from foreign countries and to assist the United States government in developing procedures with foreign governments that will facilitate a halt to the trafficking of stolen automobiles.
JCFR: In what areas of the world do you concentrate your efforts?
Pierron: Generally, we go where the cars go and that currently involves many different countries in all parts of the world. Most of our efforts, however, are concentrated for the time being in Mexico and in Central America.
JCFR: Does the NICB rely on formal accords or are the international relationships just based on handshakes?
Pierron: Both. The United States government is attempting to establish formal agreements with many nations, but to date, the only one that has finalized is the agreement with the Mexican government.
JCFR: What is involved in reaching such an agreement?
Pierron: The process is very complicated and can easily take as much as four to five years from start to finish. There are many aspects that must be dealt with and it depends on a lot of things. It is easier if there are no legal obstacles. We must first establish a mutual respect and working relationship and then get to work on the problems at hand.
JCFR: What is your goal today, right now?
Pierron: First, we are working very aggressively with United States law enforcement, the shipping lines and the other players involved in international transportation to identify and capture these vehicles before they leave the US, whether by seaport or land border.
JCFR: That encompasses a pretty large area, doesn’t it?
Pierron: Yes, for example in the case of our land border, the logistics involved in stopping the flow of vehicles over two open borders of that many total miles are extremely complex. It is not going to happen. Interdiction efforts are not going to be sufficient in and of themselves to address the industry’s exposure. Therein lies the challenge. Our operation is responsible for developing liaison relationships with US and foreign law enforcement, insurance and other entities in an effort to identify trafficking routes and locate and recover the vehicles. No longer will the bad guys be able to get these cars over the first border and consider themselves home free.
JCFR: Are we to understand that in some cases Mexico or Canada is just the first stop?
Pierron: In many cases, yes. Depending on the ultimate destination of the stolen vehicle, some groups would rather container the car and ship it from a foreign port. Our goal is to assure that the chase will not stop at our physical borders with Canada and Mexico. Whether the car is destined for the Middle East, South Africa, Australia, the Pacific rim or eastern Europe, the crooks will not be able to relax just because they made it over the first border. The likelihood of an interdiction, discovery, seizure and recovery is going to increase.
JCFR: How are you attempting to achieve this goal?
Pierron: We’re pushing very hard to establish processes that will locate stolen vehicles in foreign countries and we’re working very hard to develop sophisticated data base enhancements that will enable us to identify trends during their actual lifetime. For instance, if a large number of American luxury cars are being containered in Vancouver and shipped to Vladivostok, we want to become aware of it sooner, not later.
JCFR: In that case you’d have to be operating cooperatively with the Canadian government?
Pierron: We’re working very closely with the US Justice and State Departments to bring about treaty initiatives that will help determine where the cars are going and to provide training to the law enforcement authorities in that region to enable them to better respond. This doesn’t stop with Canada or Mexico, then, but extends to countries around the world.
JCFR: Do the foreign governments appreciate the help?
Pierron: In most cases, yes, because these places also have their own big problems. If auto theft is hot with relation to importing stolen cars, it’s also hot within the country. Our training and assistance ultimately leads to the recovery of more of our cars and more of their cars.
JCFR: And when you locate a stolen US car that is already on foreign soil, then what?
Pierron: This is where the treaty agreements are important. The treaties define the actual system that leads to the return of the automobile. In many instances, our laws and the other country’s laws are not in sync. In the US, for instance, a person who unknowingly purchases a stolen car will lose that car when its location is discovered. In some other countries, however, he may be entitled by law to keep the car if he was not involved in the theft.
JCFR: How about a real case example?
Pierron: When in El Salvador several years ago participating in meetings with law enforcement officials, a judge approached us and asked if we would be willing to forego a coffee break to look at a file he brought with him. The file was thick and it dealt with a couple of vehicles that the judge had ordered seized and still had in custody. The judge was being sued for breach of due process because he had not identified the vehicles as stolen and had thus allegedly deprived a Salvadorian national, a former military officer, of his property.
Basically, what had happened was the officer had sold several of these vehicles to Salvadorian citizens. The authorities determined that the cars were stolen and seized them. The official then reimbursed each of the buyers and eliminated, under Salvadorian law, any criminal action against him—no victim with a financial loss remained. When the judge didn’t then release the cars, the man sued.
JCFR: How were you able to help?
Pierron: We went with the judge and looked at two of the vehicles. One was a Nissan 4-wheel drive Patrol that they don’t even sell in the US, but the other one was a fire-engine red Jeep Cherokee. We conducted an examination of the vehicles and ran the vehicle identification numbers through our database. The Jeep was determined to have been stolen new from the Los Angeles area and one of our members companies had paid a total loss five years earlier. We also found a three-year-old inquiry on the same vehicle from a Guatemalan company. The Guatemalan company apparently also had a theft claim on the same car because after an innocent purchaser bought the stolen Jeep, some other thief stole the car again. The claim was denied on the basis of a lack of insurable interest. The first thief does not own the car so he cannot convey legal title.
The new insured reportedly filed suit and prevailed under Guatemalan law. The insurance company was ordered to pay the claim because the claimant was a good faith purchaser. And that was the same car the judge showed us in that lot in El Salvador.
JCFR: So who got the car?
Pierron: We recovered the vehicle and returned it to our member company in the United States.
JCFR: Was the Guatemalan company a member of NICB?
Pierron: No, we don’t have any foreign member companies. They were just trying to find out anything they could on the claim. They were familiar with NICB and called us for assistance.
JCFR: Then you cooperate with non-member foreign companies?
Pierron: We will, depending on who they are and the nature of their request. Sometimes they ask us for information that we cannot give them.
JCFR: Do you see NICB accepting foreign members in the near future?
Pierron: Not at this time. I see us continuing to cooperate in certain parameters, but at this point in time, with our current bylaws, membership is strictly limited to US companies.
JCFR: What about NICB’s efforts to establish working relationships with the Eastern European countries?
Pierron: We’re really only six months to a year into our initial efforts. It’s very early in the overall process, but we know there is definitely an ongoing problem in that area of the world. We just returned 20 cars out of Poland and one out of Latvia.
JCFR: Who approaches, let’s say, the enforcement people in Poland about cooperating with the US to deter international car theft?
Pierron: The impetus may come from the NICB, or our government or the foreign government. But the formal process begins with our state department negotiating with the equivalent foreign government agency. NICB’s international operations division contributes investigative and training support to the effort.
JCFR: Is there a natural progression in all countries as to how auto theft is born and then grows?
Pierron: Not necessarily. Circumstances driving the demand in a given country tend to dictate the development of the problem. In the United States, thefts have evolved from joy-riding, to vehicles stolen for use in other climes, to commercial thefts where the whole vehicle or its parts are reintroduced into commerce, to todays expanding international markets.
JCFR: Has this affected the statistics?
Pierron: Yes, alarmingly so. Twenty years ago the recovery rate for stolen automobiles was 84 percent. Today that number is down to 62 percent and even that figure can be misleading because if a completely stripped shell of a car is recovered, it is considered a recovery. The statistics do not include any break-downs on the condition or value of the vehicle that has been found.
JCFR: Isn’t auto theft itself on a rapid increase?
Pierron: During the past 24 years, there has been a 67 percent increase in the number of stolen vehicles and the recovery rate decreased by 26 percent. Some of this is attributable to the proliferation of chop shops.
JCFR: Are the theft rates along the border significantly higher?
Pierron: According to a recent NICB study, 20 of the 30 metropolitan areas with the highest theft rates in the nation have direct ties to international export areas such as ports or nearby borders.
JCFR: What happens to the stolen cars that are not recovered?
Pierron: Four things. One, they are chopped to satisfy a growing parts demand. Two, they are re-tagged with different serial numbers. Three, they are buried or submerged to effect an insurance fraud and four, they are exported. As new foreign markets emerge, we are seeing an increase in export activity.
JCFR: Do the patterns of theft vary by the destination?
Pierron: Yes. The per car dollar value is much greater in Europe than it is, say, in Mexico or Central America. Most of the vehicles that are containered and shipped, for instance to Europe and Far East ports, are of high value. It would be rare to find an ‘82 Ford being shipped to Poland, but common to have the same Ford driven over the border into Mexico.
JCFR: Do you have stats on how many US cars were stolen and driven into Mexico last year?
Pierron: We only know how many stolen US cars we were able to locate in Mexico last year. There were 3,352 found and 1,889 returned.
JCFR: What happened to the other 1,463?
Pierron: A large number of the remainder may still come out. Some are being held for evidence and pending legal proceedings and will be released upon final adjudication, some are abandoned because their condition and salvage value do not justify a return and a smaller number may have been forfeited under terms of the US-Mexican Convention (treaty).
JCFR: What’s the hottest car?
Pierron: It depends on what region you are talking about. In Mexico, the hot car will often be one comparable to models manufactured in that country. For destinations in Central America, we see more 4X4s, such as Monteros, 4-Runners and Land Cruisers, because they can best negotiate the terrain. In Europe it’s the Lincoln Town Cars, BMWs, Mercedes and Lexus. The Lexus and BMW are popular in Central and South America, as well as in Japan. A car is chosen for one of several reasons: luxury, terrain or parts.
JCFR: What’s coming up in 1996?
Pierron: We have several new enhancements to the NICB database capable of tracking patterns of international activity. We’ll see intensified outbound interdiction efforts, an increase in agents in Mexico, Central America and Europe, and most importantly, an increase in the number of stolen member company vehicles located and successfully returned from foreign countries.
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