Car Mafia Steals in Baja, Sells in U.S.

— 'Five years ago, stolen vehicles were a very big problem for insurance companies in California." Speaking is Angel Escobedo, owner of Recuperadora Internacional de Vehículos Robados, a private stolen-car recovery business based in the Rio Zone of Tijuana. Tall and well dressed, with thinning black hair and a magnanimous manner, Escobedo sits in a leather captain's chair behind an antique wooden desk in his lavishly decorated office.

"There were a lot of cars being stolen in Southern California," Escobedo continues, "and they were all coming to Mexico. Those cars were used by federal police, by state police, by state police wives, by state policeman's mistress, by her brother, by the attorney general. Everybody that was in some kind of power was driving one of these cars."

In addition to buying the stolen cars -- "mostly Cherokees, Explorers, and Suburbans" -- from the thieves, Escobedo says, state and federal policemen were confiscating them. "They could tell by the way people were driving them, by the California plates, and by the condition of the car that it was probably stolen. So they would pull it over and say, 'We know this car is stolen.' The driver, who is very nervous, says, 'Oh, it's my aunt's car.' They tell him, 'Bullshit, it's stolen.' So they just take it away, and it was like a black market of stolen cars."

The cars that they didn't keep for themselves, their wives, or their mistresses, "They would dismantle them for the parts," Escobedo says. "You are talking about $25,000 to $30,000 car, maybe $40,000 car, that was ripped off, and the insurance company got it back, but it was worth only $8000."

But a state law, passed in 1999, has had the effect of reversing the flow of stolen vehicles over the border. "This law, which passed a couple of years ago," Escobedo explains, "said if they catch you driving a stolen vehicle, it's 10 years in jail and, if you were a cop, 15 years in jail. So the state police started hitting everybody who was driving stolen cars."

It wasn't so much the prospect of a decade or more of jail time that made people stop driving stolen cars; it was the huge monetary bite that the cops who pulled them over would lay on them. "It wasn't worth it to have a stolen car anymore," Escobedo says, "because anybody would stop you, and they would take $1000 to $2000 away from you and confiscate the car. Then the police would resell the car, or they would dismantle it for parts and then give it back to the insurance company. The insurance companies' agents would give you $500 for each car. So the guy that went to the United States, stole cars, and then brought them here was only making $500 to $600, maybe $1000, selling that car because the guys who used to buy those cars couldn't use them anymore, because they would get stopped."

So the "car theft mafias," as Escobedo calls them, started stealing cars in Mexico. "The cars are usually a little older, five years or more, because nobody will stop a car with Mexican plates that isn't a new car. So they tried their [cross-border, steal-and-resell] system, but in reverse. They figured that they could take these cars north, get them registered in the States, and sell them."

For the cars, it means coming full circle because the majority of cars driven by Tijuanenses were imported from the United States. "Ninety-five or more percent of cars in Tijuana were imported from California. Those cars that are here are cars that you can take to the States because they have the EPA standards, security systems. They take them to the DMV, and someone gives them a new pink slip."

Getting the pink slip, according to Escobedo, can involve changing the vehicle identification number (better known as VIN) so that it shows up as a previously unregistered car in the Department of Motor Vehicles records. Or, sometimes the car is re-registered in the United States under the rightful owner's name as a change of address before it is sold. And Escobedo is convinced that, in some cases, DMV agents are being paid by the car-theft rings illegally to issue new titles on the cars. "I can tell you that this ring is an organized ring. And somebody at these DMVs has to be on the take. I see it in Huntington Park, Whittier, all the way up to Oregon, to Arizona, and it is definitely in Nevada. Stolen vehicles are a big problem in Nevada.

"Most of the cars stolen in Tijuana," Escobedo continues, "end up in L.A. Thirty thousand people are driving stolen Mexican vehicles in Los Angeles County."

The end result for Tijuana has been a huge leap in stolen-car statistics. "Tijuana has 18,000 cars stolen every year now," Escobedo says. "That's the highest rate per capita in the world. One out of every 29 people in Tijuana will have his car stolen."

Asked who is stealing the cars, Escobedo heaves a sigh and leans back in his leather desk chair. "The situation," he answers, "is that everybody is in it. The guys from the [Mexican] towing companies, the used-car lots, and the police, even recovery agents for the insurance companies. These agents, when they recover a stolen car, they give $400 to the police or whoever. And they tell their boss that the car is in El Paso or in Mexico City, when the car is here. And they charge them $3000 in expenses to get it here. The insurance company likes the guy because he is recovering cars, but he is actually stealing from them."

Mexican police get in the game, Escobedo claims, by confiscating stolen vehicles that they pull over. "They take the car and they get money from the guy driving it."

But instead of keeping the cars as they once did, they dismantle them and sell the parts. "They have an inventory in their brains," Escobedo says. "This guy needs the wheels of a Blazer, that guy needs a dashboard, et cetera. So they take the wheels or whatever they know they can sell. Then they call the insurance company and tell them they have the car, and they get $400 to $500 for 'recovering' the vehicle.

"Most of the cars," Escobedo opines, "are stolen by the same guys who sold them or by the employees that work at that car lot. They keep a copy of the key. That is another part of the stolen-car scam. And most of the rest are stolen from the guys that work at the customs offices. They get key copies while the cars are in the process of being imported. And they know where the car is going to end up because they have the owner's address. So two months later, they go and steal them."

Escobedo tracks the stolen cars using an online database of vehicle identification numbers known as VIN Assist. "It was made," he says, "by the National Insurance Crime Bureau for law enforcement agencies."

Over 90 percent end up in the United States, where he says he can locate the car after it's been bought by an unwitting citizen. "That is how I do it. The guy at the end of the line. He buys new tires, buys a new radio, and I recover cars in better condition than the cars that were stolen. I have a percentage rate that is more than 65, and that doesn't mean that I couldn't find the other 35 percent."

But there's a difference between finding and recovering. Escobedo claims he can find a car more often than not. Getting it back to its owner in Tijuana is another case. "I call the local police where these cars are and tell them where they are," he explains, "but because I'm not government, they don't act on what I'm telling them. So I work through Interpol, but it takes them a long time to get the paperwork to the local police in the United States. It takes months and months. But otherwise, I would have to concentrate on one car at a time and go personally to each police department and tell them, 'This is the car.' But I can't do that. Some things I still have to establish. I need to establish a system whereby police in the States will go recover these cars with just my phone call or paperwork, which I can fax them. I'm not there yet. The important thing is, I'm finding the cars. And I can prove that."

Escobedo admits that his six-year-old auto-recovery business is not profitable. "It's an investment right now." He's been trying to convince insurance companies that the system works, while funding the business by selling off a string of Avenida Revolución nightclubs he owned, including Peanuts and Beer. "But I'm running out of nightclubs," he says.

Still, he thinks the venture will be successful if insurance companies start using his services. As proof, he offers, "When the chief of police has his car stolen, he comes here. The attorney general, the congressmen, they get their cars stolen, they come here."

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