SPECIAL REPORT

CAR THEFT FOR EXPORT

Wealthy foreigners gladly pay huge prices for late-model cars stolen in Canada

RAE CORELLI August 17 1998
SPECIAL REPORT

CAR THEFT FOR EXPORT

Wealthy foreigners gladly pay huge prices for late-model cars stolen in Canada

RAE CORELLI August 17 1998

CAR THEFT FOR EXPORT

SPECIAL REPORT

Wealthy foreigners gladly pay huge prices for late-model cars stolen in Canada

RAE CORELLI

At 8 a.m. last May 23, real estate agent Sylvie Cohen walked out of her home in an upscale neighborhood of Thornhill, Ont., north of Toronto, to go for a morning workout. But she never got there because during the night thieves had stolen her brand new Nissan Pathfinder 4x4 right out of the driveway. Nine days later, Peel regional police raided a warehouse in nearby Brampton. They arrested the owner, an Antigua-born freight forwarder, at gunpoint and charged him with the possession of nearly two dozen stolen vehicles, including Cohen’s Pathfinder, all headed for Africa. Police found two of the cars at the warehouse. Canada Customs discovered the rest in shipping containers at a Brampton rail yard and at dockside in Montreal. Cohen has her sport utility vehicle back, but she is still incensed. “Everybody I’ve talked to has a friend or relative who has had a car stolen,” she says. “It’s a racket that makes me sick.”

Cohen is among the hundreds of thousands of Canadians and Americans whose cars, vans and sport utility vehicles are stolen each year, many of them by well-organized gangs who ship the vehicles to wealthy and waiting buyers around the globe. Five years ago, North America’s auto theft-for-export racket barely existed. But the collapse of the Soviet Union, lower international trade barriers and the glamorous lifestyles portrayed worldwide by Western commercial television have all combined to whet the appetites of millions in distant lands for luxury vehicles previously beyond their reach. The criminals who moved to meet that demand—some suspected of having links to narcotics and weapons dealers—are now rolling up annual profits estimated at $15 billion to $30 billion. In the process, they have left police, customs agents and insurance companies on both sides of the border enormously frustrated. ‘What can we do to stop it?” asks George Webb, manager of strategic export control and counterterrorism for Canada Customs in Ottawa. “I have no idea, and I don’t think anyone else has either.”

The theft of motor vehicles for profit is crime on a global scale. Statistics Canada says auto theft in this country alone is increasing by about 10 per cent a year. In 1996, thieves made off with 178,580 vehicles and more than 43,000 have never been recovered. “The proportion of stolen cars that are never recovered,” says StatsCan, “is a good indicator of the number of vehicles stolen each year by organized theft rings.” Webb says a recent study by Canada Customs suggests that upwards of 9,000 of the non-recovered vehicles were spirited abroad. But he adds that he would not be surprised if the total were closer to 20,000. Asked about that figure, Mark Solomon, assistant director of the customs intelligence service at Montreal, says: “I’d say you were in the ball park.”

Meanwhile, the North American Export Committee, a two-nation coalition of police, customs and insurance investigators with headquarters in suburban Chicago, estimates that of the 1.3 million vehicles stolen in the United States in 1996,200,000 were exported. “I won’t say that’s a conservative figure, but it’s a decent low-end one,” says U.S. Customs senior special agent Daniel Supnick, attached to the American Embassy in Ottawa. Costing more than $7 billion a year, auto theft now leads all other property crime in the United States (and, in Canada, is the only crime against property that keeps rising every year). And while car theft overall has declined marginally in the United States because of tougher laws, authorities believe the export variety is thriving. “It’s more widespread every year,” says Supnick. “Is it worldwide? Absolutely.” It is costly in Canada, as well; two years ago, total claims against auto insurance companies alone hit $600 million, up a hefty $100 million from 1995. (Insurers recouped most of those losses by hiking premiums.)

One a.m. in an airport parking lot. A shadowy figure in a dark jacket and jeans crouches beside the door of a luxury sedan. He jams a screwdriver down between the window and the door frame, locates and pushes a lever. A click and the door is unlocked. Once inside, he pries off the plastic ring around the ignition, which enables him to bypass the ignition lock and start the car with the screwdriver. He is quickly gone. Elapsed time, depending on the make and model: 15 to 45 seconds. The most popular targets of theft-for-export: Jeep Grand Cherokee, Nissan Pathfinder, Toyota 4Runner; high-end models by Mercedes-Benz, BMW, Lexus and Infiniti; and well-equipped versions of vans made by several manufacturers.

The havoc created in the lives of people preyed on by car snatchers cannot be measured by statistics. Cohen says that when she realized her 4x4 had been stolen, “I went ballistic, I was just beside myself. I felt emotionally raped.” She had left her laptop computer and dozens of files in the Pathfinder the night before, so “I had no business to run,” she says. “Who had given me cheques and who hadn’t, I didn’t know. I wasn’t able to work for two weeks. Do you know what that means to a real estate agent? You lose contact with clients. Clients aren’t loyal if you’re not showing them houses; you don’t call, they go somewhere else.” To the police officer who went to her home to fill out a report, “I said how can you sit there so calmly, and he said it was his third stolen car in an hour.” (When police found Cohen’s vehicle, the laptop was gone but the files were there.)

Cohen has plenty of company. On May 20, commercial photographer Dan Dionne, 41, and his 37-year-old wife, Maren, left their home in Sudbury, Ont., for a three-day holiday in Las Vegas, Nev. Business pressure and the recent death of a close family friend had led Maren to say: ‘We’ve got to get away for a few days before I blow up.” They drove their 4x4—like Cohen’s, a Pathfinder—to Toronto where they checked into a hotel near Pearson airport to await their morning flight. Later that evening, Dionne walked to the hotel parking lot to leave his cell phone in the car, but it had disappeared. “Police said it was probably gone an hour after we checked in,” says Dionne. They went to Las Vegas anyway and when they returned, rented a car for the drive home. On June 4, customs officers found the Pathfinder in a container that had already been loaded aboard a freighter in Montreal. The intended destination: West Africa.

What vexes the law enforcement community is the ease with which vehicles can be hijacked and smuggled out of the country. Auto-theft rings often recruit teenagers to steal cars from airport, hotel and shopping mall parking lots, car dealerships, public streets and, as Cohen learned, private homes. The youngsters are paid in drugs or cash—around $2,000 for each vehicle. Once a gang has assembled a shipment, they contact a freight forwarder, claim they have overseas cargo, and ask him to deliver and drop a 20or 40-foot container—to a warehouse, a farmer’s field, a back alley or a backyard. Thieves can get as many as four vehicles in a 40-footer by hoisting the front ends and stacking them like dominoes. They fill the rest of the space with old clothes, rags, insulating material or other junk, and padlock the doors.

The gang completes a manifest describing the contents as household goods or personal property addressed to a supposed family member in Bolivia or Vietnam or Kazakhstan. “They just throw fictitious names and numbers on a piece of paper,” says Halifax customs agent Michel Cormier. Then the criminals call the freight forwarder to pick up the container.

The forwarder, who is not interested in the contents because he is not responsible for them, delivers the container to a shipping line in Montreal or Los Angeles—and away it goes. The cars inside will be sold in Southeast Asia, Africa, the Middle East, South America or Eastern Europe for two to three times their original market value. “In 1996, a Lexus that went here for around $78,000 would go for $250,000 (U.S.) in Moscow,” says Toronto police Staff Sgt. Chuck Konkel, an auto-theft specialist.

However, international vehicle traffickers do more than simply steal cars. They often give them new identities so that if police stop a new overseas owner his vehicle will not show up as stolen. This is done by applying a copied or counterfeit vehicle identification number (VIN), the 17-digit code imprinted on a plastic or metal strip and visible through the windshield. Some gangs cruise parking lots, making lists of VINs, which are applied to stolen cars of the same make and model. Others will pay salvage yards thousands of dollars for wrecks just to get legitimate VINs for use on stolen vehicles that match. The scheme is not foolproof; police in Latvia recently seized a 1998 Chrysler bearing the same VIN as one in a Toronto driveway.

For a car-theft ring, there is one last hurdle before a big payday—the harborside agents of Canada and U.S. Customs who have the authority to forcibly open and search overseas-bound containers. But the smuggler runs little risk. Between 20 million and 25 million containers enter and leave North America’s major Eastand West-Coast seaports every year. Customs officers are lucky if they get time just to target freight forwarders and exporters or importers with suspicious records. ‘Vehicles we do inspect may not yet have shown up on the computer as stolen,” says Kim Scoville, chief of Canada Customs marine operations at the port of Vancouver. ‘Then after they’re gone, we find out they were.”

And because of the ever-present worry about narcotics, explosives and illicit weapons, containers coming into the country are given priority over the ones leaving it. Even so, Canada Customs inspects only about three per cent of inbound containers and fewer than one per cent of those on the way out. From September, 1996, to December, 1997, customs returned only 235 stolen cars to their owners; 151 were intercepted before they left the country and 84 were seized by the police or customs agents of foreign countries and sent back. “You can only search a small proportion of anything entering or leaving a major trading nation,” says Michel Cleroux of Revenue Canada, which runs the customs service. “If you tried to search everything, the economy would collapse.”

WHERE THE STOLEN CARS COME FROM

Thefts by province/territory, per 100,000 registered motor vehicles

1996

Per cent change in theft rate from 1995 to 1996

Per cent change in rate from 1991 to 1996

Newfoundland 184 20 -27.3 Prince Edward Island 224 -11.2 -35.3 Nova Scotia 428 30.5 13.4 New Brunswick 349 5.9 -6.5 Quebec 1,258 10.8 -4.5 Ontario 919 1.7 48.9 Manitoba 1,518 9 190.4 Saskatchewan 928 24.9 80.5 Alberta 740 13.9 -17.8 British Columbia 1,527 18.8 36% Yukon Territory 578 -14.4 4.1 Northwest Territories 1,552 -8.5 -26.5

A SHOPPING LIST

The top 10 vehicle makes and models most often stolen by car thieves in Canada in 1995-1996 (the most recent year for which figures are available):

Honda Prelude Jeep YJ Suzuki Sidekick 2-dr., 4WD Acura Integra 2-dr. Jeep Grand Cherokee 4WD Acura Integra 4-dr. Jeep Cherokee 4WD Honda Civic 2-dr. Nissan Pathfinder 4WD Toyota 4Runner 4WD

In a farmer’s field outside Warsaw, in weeds higher than the hubcaps, sit scores of cars and sport utility vehicles, most of them Toyota 4x4s. They have been there for two years and are part of the more than 11,000 vehicles seized by Polish police in an ongoing war against auto-theft gangs. Seventy per cent of the 11,000 are from Canada. Ex-Mountie Ron Giblin, associate vicepresident of the industry-supported Insurance Crime Prevention Bureau in Toronto, says negotiations are under way to have the Canadian vehicles repatriated.

Caught between car thieves in Germany and stolen-car buyers in the former Soviet Union, Polish authorities have cracked down— and paid a price. On June 25, the former chief of Poland’s federal police, Marek Papala, was shot to death in front of his Warsaw home, only days before he was due to join European Union racket-busters in Brussels. ‘We know that some very vicious people are involved in the theft of cars,” says the U.S. Customs’ Supnick.

Three weeks earlier, Bulgarian police arrested a dozen members of an auto-theft ring in Sofia and impounded an equal number of cars, all stolen from car dealers and parking lots in Quebec. At last report, police were still searching for the ringleader, a 41-year-old Bulgarian-born Canadian citizen. Kiril Radev, head of a Bulgarian police organized crime squad, said the vehicles included a Mercedes 600SEL, a Cadillac Fleetwood and a Nissan Infiniti, worth an average of $60,000 (U.S.). All had been shipped from Halifax to the Greek port of Piraeus in containers filled with insulation and were to have been re-exported to former Soviet republics. (Supnick says he has it on good authority that there are more Mercedes-Benz automobiles in Ukraine per capita than any country, including Germany—but not a single dealership.)

The reappearance of shanghaied vehicles does not always lead to arrests. Five white Jeep Grand Cherokees were whisked away from a Toronto dealership last year, loaded into containers and driven to Halifax. Customs had been tipped, knew the name of the crooked exporter and the shipper but not the container numbers, and the freighter left. Customs notified their counterparts at the European destination who had no better luck. Agents eventually traced the Grand Cherokees to a small African nation— where the vehicles were being driven by customs officers.

The rings enforcement. cost falls of fighting on all levels Every stolen of law major car city in the country has assigned from four to a dozen men to auto theft and the hunt for the people behind it. Det. John Anderson of the Edmonton police service auto-theft unit says each of the unit’s six members is investigating from 10 to 20 cases at any given time. “The manufacturer comes out with a new anti-theft device and it takes the bad guys maybe a month to figure out the technology,” Anderson says. Outside Toronto, Det. Jeff Davis of Peel region’s commercial auto crime bureau, which gets about 4,000 stolen car reports annually, has seven men and says if “I had three times as many I could keep them all busy.” Giblin’s insurance crime bureau handles from 7,500 to 10,000 inquiries a year about suspect vehicles from police in all regions of the world and employs about 90 full-time investigators, most former police officers.

Now and then, for beleaguered lawmen, there are victories. One of the most spectacular occurred on Valentine’s Day last year when RCMP and Charlemagne municipal police raided a house on Vaudry Island, east of Montreal. Inside they found an embossing machine for counterfeiting VINs, a device for making car keys, $1.6 million in phoney U.S. and Canadian currency and a press for printing more, five submachine-guns, three silencers and seven vehicles believed to have been headed for Russia. Police arrested two men and a third, the suspected ringleader, was caught in Los Angeles with 300 kg of cocaine and is now serving 25 years to life in a California prison for trafficking.

A common complaint of customs officers and police is Ottawa’s failure to back them up with tougher laws. The maximum penalty for stealing a car or possessing a stolen one is 10 years, which courts rarely impose. ‘We’ve got to have governments sit up and pay attention, but nobody’s listening,” says former Ontario Provincial Police detective staff sergeant Dennis Pearce who retired on May 31 after heading the province’s provincial auto-theft team. “You get caught with a container full of drugs and they’ll never see you again for 15 lifetimes,” echoes Giblin. “You get caught with a con-

tainer full of vehicles and you get a slap on the wrist.” He adds: don’t think we’ll ever eradicate the problem.”

DETERRING THE THIEVES

is no such thing as a car that cannot be stolen (unless it is locked in a garage). But for motorists prepared to spend the money, there are devices that at least present a challenge to the skills of a professional car thief. Among them:

• A metal bar that locks onto the steering wheel so that it cannot be turned. Works well against amateurs; the pros have been known to cut the wheel in half, remove the bar, hotwire the car and drive away. Cost: $35 and up.

• A mechanical system that is activated the moment a car is locked, immobilizing it. Ron Giblin of Canada’s Insurance Crime Prevention Bureau says the system was devised by the bureau and the insurance industry. He says the device cannot be easily bypassed. Cost: not yet available.

• A variety of disabling apparatuses called “kill” or “drop-dead” switches. Some shut down the electrical system while others

cut off the fuel supply after a car has moved a few feet. “If the guy hasn’t brought a tow truck, it works well,” says Det. Jeff Davis of the Peel regional police. Cost: $20 and up.

• Car alarms, activated by motion sensors that set off sirens, honkers, flashing headlights, horn-blowing and other ear-splitting noises.

Cost: from $200 to more than $1,000.

• A whole galaxy of radio and electronic transmitters that do not prevent a vehicle from being stolen but can record its position afterward with varying degrees of accuracy. The ones that employ satellite tracking can pinpoint a car’s location to within 30 m. Cost: $600 to more than $2,000.

• The priciest technology to spot a stolen vehicle on the move is STAR (for Stolen Auto Recovery System), installed at the port of Miami. Trucks carrying containers passthrough an X-ray field between two metal standards, one on either side of the road. If there are cars inside, they show up clearly on a monitor. The problem, says U.S. Customs senior special agent Daniel Supnick, “is that as soon as the crooks know it’s there, they get the word out and everybody moves to where the machine ain’t.”

Cost per unit: $525,000.

R.C.