Copyright held by The John Cooke Fraud Report. Reprint rights are granted with attribution to The John Cooke Fraud Report with a link to this website.
By Leslie Kim
WARSAW POLAND, OCTOBER 2, 1997: We are very, very far from home. It is evident everywhere; and once again, there is the feeling of having been transported to another time, another place.
I remember the dozens of jokes that I heard growing up. Poland and the Polish people were known to me only through humor, and my perceptions had been skewed by this background. Yet, as I stand upon the soil of this foreign land, there is a certain feeling of comfort that I cannot even begin to explain.
We have business in two countries on this trip: Germany and Poland. Initially, we intended to fly into Germany and rent a car for the trip over the border into Poland. The story I am working on is centered on the auto theft problem; cars are being stolen in the US and transported through Germany and Poland to their final destination of Russia. But when we tried to make arrangements to rent a vehicle in Germany and drive into Poland, we were unsuccessful. The German companies do not want their cars to go over the border. Why? The extremely high likelihood of auto theft. On the other hand, although the rental rates were much higher, renting in Poland and driving west was not a problem. However, the daily insurance rates, those that cover the theft of the vehicle, are astronomical. This information served as my first lesson on auto theft in Eastern Europe.
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Our Ford Escort is one of the larger vehicles on the road. Cars in Poland are generally small, old or both, as they are throughout Russia and Eastern Block countries. Many belch black fumes from their exhaust pipes, and the predominant color is rust. Freeways, as we know them in America, are nonexistent in Poland; so the ride to Posnan, a large city to the West of Warsaw, is a harrowing trip on a two-lane road.
The rule of the road seems to be one of size: the larger the vehicle, the crazier the chances taken by the driver. Semi-trucks comprise a high percentage of the traffic, and they pass at will, swinging over to the opposite lane with little warning. We play a forced game of dodge-em until we wise up enough to lean toward the shoulder of the road like most other small vehicles do. Fiats and similar teeny-tiny cars are everywhere. Many are smaller than Volkswagen Bugs, almost like golf-carts with a thin metal covering, and they putt-putt along at a steady 50 klicks (35 mph). The semi-trucks, going twice as fast, nearly blow them off the road. When we see the occasional Jeep Grand Cherokee, Mercedes or BMW, I cannot help but wonder if it was once parked in the driveway of an upscale neighborhood on the outskirts of Boston or New York City.
Posnan, located half-way to the German border, is a town of about one million people. While looking for Grunwaldzka Street and our hotel, we become turned around and I suggest we ask for directions. (In my house we call this the “D-word” and hesitate to say it aloud to anyone of the male gender because admitting one is lost is, I suppose, “unmanly” or something like that…)
Through a tie vote (1-to-1), I am elected to seek the D-word, a seemingly difficult task for a non-Polish-speaking blond person in a town like Posnan. I soon find I am wrong. Many of the under-30 crowd have a working knowledge of English—at least enough to understand we are lost and to point us in the direction of the hotel, whose name I have written on a piece of paper.
In the morning, we drive just a few blocks up Grunwaldzka Street and pull into the driveway of a building with a sign that says “Europejski Rejestr Pojazdow” (ERP). Inside, we meet Katarzyna (Kate) and Malgorzata Matuszak, sisters who operate what can best be described as a not-for-profit business to provide assistance to law enforcement. Also integral to the operation of ERP is Maciej “Mike” Galica; however, he is out of the country during our visit.
Equipped with modern computers, the sisters answer an endless stream of telephone calls, e-mails, letters and faxes relating to vehicles throughout Eastern Europe. They are in the business of identifying, locating and recovering stolen cars. They both enter information and search their data files. When a stolen auto is located, and if the task of recovery is assigned, they begin the lengthy process of retrieval. In the case of a foreign request, this may involve obtaining an original title, translating of documents and even appearing in court. Then there is the task of physically moving the car to a storage lot until the rightful owner can reclaim it.
Behind their office is one of the storage lots. At least a dozen high-priced, late-model cars are parked and waiting for the next step in the eventual return process. A 1996 Mercedes 560 Sedan sits next to a 1996 Cadillac, both covered with enough dust to confirm they had been there for a long time.
Kate, with an extremely good command of English, provides a great deal of information that helps to explain the difficulties encountered throughout the process. In many European countries, the laws are very different from those in America. If a car has already been purchased by a buyer, the courts first consider the “good faith” of the buyer. If the judge is convinced that the buyer bought the car without knowing it was stolen, he is likely to rule that the car will remain with the new buyer, and the original owner (usually a US insurance company) is—as we say in America—“S.O.L.”
However, the decision does not always go against the US insurance companies. If the US insurer, via the International Operations division of the NICB**, produces the original legal title, registration information and theft reports—and the buyer produces only a non-certified copy of a Xerox title—the car is more likely to go back to the American owners. The difficulty occurs when the new “owner” has been provided with excellent forgeries geared to fool the most astute buyer.
(**A word of caution to US companies: There has been a recent increase in private organizations in Poland that attempt to make direct contacts with US insurance companies under the pretense of being affiliated with government and law enforcement in Poland. In many cases, however, they do not have the affiliations they claim to have, and the eventual fees for locating and repatriating cars will be much higher than the fees would be through usual NICB channels and efforts.)
Another law that we have in the US, but not in most European countries, is the one that prohibits the driving of a car with an altered VIN. Here, it is a crime to drive such a vehicle at all — there, it is not. In other words, one cannot be prosecuted in Europe for merely possessing a vehicle that has had its numbers altered. One can only be prosecuted for the actual theft, which is a much more difficult thing to prove.
Another major difficulty contributing to the theft problem is the lack of police training on VIN switching. A police officer may inquire as to the status of a particular automobile (eg. is it stolen?). If, however, the officer is reading the VIN from a forged form, or from an actual VIN plate with altered numbers, the computer will not flag the car as stolen and the driver will proceed on his merry (and criminal) way. Officers in foreign countries are not usually familiar with the concept of looking at anything other than the windshield plate (public) VIN. They do not know how to read the federal label (usually on the door or door jam on the driver’s side) or any of the identifying labels on certain parts of the car. The problem is that it takes specialized training to detect these VIN switches and other related fraudulent acts, and only a very small portion of European law enforcement has been privy to such training. Some classes have been given in a joint cooperative effort between the FBI International Training Unit, the NICB and US Customs—and more are scheduled to follow.
Visual recognition of a bogus title is difficult for US law enforcement because each of the 50 states utilizes its own forms. Although they come in all sizes and colors, here we have a system where law enforcement from Oregon can talk to law enforcement from Mississippi via computer—while a suspect car is stopped at the side of the road—and the car’s status can be ascertained instantly. Such is not the case in Eastern Europe, however, because the individual countries do not enjoy the level of cooperation that our states enjoy. While Germany may share information with Lithuania, it is not an instantaneous process and may, in fact, take months to complete. Calling a specialty service like Europa Rejestr Pojazdow may shorten the process considerably, but only from months to days. Instant response is almost unheard of.
Some European levels of law enforcement may make an inquiry to NICB, and the car may indeed prove to be stolen, but even these rare cases often pose difficulties. Two Posnan police officers shared their frustrations on such instances (with Kate serving as our translator).
Officer Waldemar Kmiecik, the head of the Posnan-Grunwald auto theft detail, advised us of a Polish law that allows a car thief to go immediately free if he tells the officer, “This car was so pretty that I only borrowed it to take it for a ride. It is not my car, however, so here are the keys. I am returning it so that you may give it back to its rightful owner.” Kmiecik says that one must admit both intent to steal and intent to KEEP the car before any prosecution may take place. In other words, almost anyone caught in a stolen car can simply utter the magic words and go instantly free.
When American cars arrive in Germany in shipping containers, they are often moved to their Russian destinations through Poland. Officer Marek Palacz, also with the Posnan-Grunwald police department, explained that the drivers, who are referred to as “pilots,” may be paid as much as $500 (US equivalent) to drive a car from the German/Polish border to the Polish/Russian border. In a country where the average worker earns far less than that in a full month, the money is a big lure.
Because of the “It-was-so-pretty-I-only-borrowed-it” laws, there is little danger to these pilots in being picked up by the police on stolen car charges. The real danger is from other bands of car thieves. It is not unusual for one organized band of car thieves to ambush a pilot from another organized group and steal the stolen car! Palacz says, “And if the pilot is executed at the side of the road and thrown into a ditch, that, too, is not unusual.”
The common denominator, as it is with any crime, is simple greed. There is big, big money in auto theft, and in a country as poor as Poland, one successful run can make a large difference for a struggling family.
Standing inside of the police building, we are immediately cognitive of the stark furnishings and the obvious lack of funds. There are no fancy offices and the decorative motif is “Early Salvation Army” at best. The desks and chairs appear very old and tattered and even standard items like pencils, pens and paper are in short supply. Programs like auto theft do not get large “grants” to help them shine. In fact, the extreme lack of funds puts a damper on what little they can do.
Officers Kmiecik and Palacz explain that if a car is stolen in America and recovered in Europe, the vehicle is put into storage while the courts determine its disposition. If the car is awarded to an American insurance company, that company will cough up the storage charges. If, however, the car is awarded to the person (good faith buyer) the police took it from, the police become liable for the storage charges. Since there are no pools of funds for such an eventuality, the police are very leery of becoming monetarily responsible by seizing a car and placing it into storage.
Roland Dumond, Senior Special Agent of the National Insurance Crime Bureau (International Operations Office), has traveled to Poland many times. One of the problems he notes is the cost of actually repatriating the cars recovered overseas. It costs, he says, about $2,500 to ship a car from Poland back to the US. There is also the cost of the legal proceedings to consider. The cases that are the most worthwhile are those in which a group of cars are involved. This is because the individual cost of vehicle repatriation lessens with the numbers (eg. two cars can be put in a single US-bound shipping container, thereby reducing the cost for each car).
“The cars most likely to be stolen and shipped overseas,” says Dumond, “are the Jeep Grand Cherokees and equivalent. Such vehicles are good for the Russian road conditions, they are luxurious and they are a status symbol.” Other popular automotive targets are Mercedes and BMWs.
What kinds of profits are realized by the thieves? Big ones! In the specific case of a 1996 Grand Cherokee that found a new home with a Russian family, Dumond was told that their cost was $55,000 in American dollars—CASH! “The average value of a stolen car,” he says, “is between $25 and $35 thousand. Once it reaches Russia, that cost immediately goes up 30 to 40 percent. The criminals may have spent a few thousand in shipping and other administrative fees to bring the car into Russia, but the profits are still very high.”
Most of the vehicles making their way to the former Soviet Union are handled by organized criminal rings. These rings are made up of people from various countries, often working together. Most have active members both in the US and overseas.
The answer is not yet on the horizon. The US State Department plays a major role in the eventual solution by taking the initiative to solve this problem through negotiations and educational projects incorporating the cumulative efforts of the FBI, the NICB and US Customs. The willingness of the police to assist, even with the monetary limitations and frustrating lack of supportive laws, is a good sign. And the cooperation and active involvement of people like Katarzyna, Malgorzata (our lovely Polish hostesses) and “Mike” of ERP, are also of immeasurable value.
The result is our own organized ring: one showing a united front against the massive wave of international auto theft. Together, our team is moving forward. Together, we stand a chance.
© Copyright 1999 Alikim Media