Phony classic cars have cost DMV plenty

Criminal investigation under way by agency

A replica 1937 Ford truck belonging to a friend of former Division of Motor Vehicles Commissioner George Tatum has led investigators to nearly 1,000 other vehicles that may have been misclassified as antiques in North Carolina based on fraudulent or nonexistent documentation.

A three-month review of the DMV's title files found roughly 900 vehicles with vintage vehicle titles based on documents from an Alabama company known for selling titles, said Brian Bozard, a DMV supervisor in the License and Theft Bureau. Eighty vehicles not associated with the company have been misclassified as vintage when they were custom-built, he said.

Misclassified vehicles can cost the state thousands of dollars because owners of vintage vehicles typically pay much lower taxes and fees.

"We have been victimized by titling services out of Alabama," Bozard said at a state Board of Transportation meeting Wednesday. "It has turned into a criminal investigation."

The review attempted to capture all vehicles registered in North Carolina that are 35 years or older, as well as all vehicles registered since Jan. 1, 2004 as custom-built. All told, the DMV reviewed more than 100,000 vehicle title records, and inspectors looked at 601 vehicles.

Bozard also said the review showed that the DMV had flawed procedures for verifying vintage vehicles. Inspectors were not routinely examining them, and title clerks were allowing owners to provide serial numbers for the vehicles without presenting underlying documentation such as a title or a bill of sale.

Starting next month, DMV inspectors will be required to eyeball any vehicle for which an owner is seeking a vintage title. The inspectors will also take digital pictures of the vehicles so the documentation can't be used for a different one. In March, the DMV expects to begin allowing vehicles to be registered as replicas of vintage cars, a designation common in other states.

Bozard did not identify the Alabama company that has produced the roughly 900 documents for vehicles that have since received vintage titles in North Carolina. But he said that the DMV suspects the company operated much like another Alabama business, Titles Unlimited in Birmingham, that was the subject of a California investigation in 2003.

News releases from the California Attorney General's Office reported that Richard Weaver, the owner of Titles Unlimited, was convicted of providing fraudulent title and registration documents to California vehicle owners, causing the state to miss out on $14 million in taxes and fees over 18 years.

DMV officials began the review in the summer after The News & Observer questioned a vintage title issued for a replica of a 1937 Ford truck. That vehicle belongs to a friend of Tatum.

Correspondence showed that Tatum's administrative assistant sought to help Tatum's friend, Robert Kinlaw of Fayetteville, get the title. A DMV inspector found the truck to be a replica, but Kinlaw then took the vehicle to a second DMV inspector in Fayetteville who certified it as an antique.

Tatum said he did not aid Kinlaw. An assistant DMV director, Joey Gardner, recalled otherwise, saying that Tatum told him that he would press to get the vintage title after the first DMV inspector rejected it.

Tatum resigned shortly after the title controversy, which prompted a State Bureau of Investigation probe. The status of that investigation has not been disclosed.

One of Tatum's last acts as commissioner was to call for a review of the DMV's procedures for titling vintage vehicles. The review showed that the problems with improperly titled replicas began well before Tatum took office, Bozard said.

DMV spokeswoman Marge Howell said Kinlaw has been ordered to return the vintage title documents. He is being issued a title for a 2004 custom-built vehicle and, as a result, paid roughly $1,300 more in highway use taxes. She said Kinlaw is also surrendering vintage title documents for a second vehicle that he has admitted is a replica. A second DMV inspector in Fayetteville had certified that replica as a genuine 1932 Ford Roadster.

Bozard said Kinlaw would not face any civil or criminal penalties. Bozard said under current DMV law there are none for people who misrepresent replicas of vintage cars as originals.