ODOMETER FRAUD KEEPS ON ROLLING

MILD-MANNERED RICHARD MORSE LEADS A LAW enforcement crusade against odometer rollbacks.

Sometimes he wonders if he's making inroads as manager of the U.S. Department of Transportation's odometer fraud enforcement program. He's headed it since it began in 1978.

“Things haven't changed much,” says Morse, whose low-key demeanor belies his federal crime fighting job as well as a 20-year stint as an Army intelligence officer.

He's busted major rollback artists, and sent hundreds to prison.

“And you know what? It's still a problem,” he says. “Why? Money. Too much is made on this crime.”

In 1979, the average rollback garnered about $700 in illicit profits. Twenty years later that rose to $3,800, according to Morse.

Odometer rollbacks aren't as rampant as they were before the federal government stepped in 24 years ago — through a door the auto retailing industry willingly held open.

“Congress passed the odometer law at the insistence of the industry which was saying, ‘This is killing us,’” says Morse.

It was deadly, especially for the industry's image.

The public's accurate perception that some shady characters were rolling back odometers was widening to an inaccurate public perception that just about the entire used-car industry was in on it.

The industry's reputation suffered, as did the reputations of car dealers — some of whom were aiding and abetting, but many of whom were crime victims themselves.

Says Morse, “Dealers take it hard. Their reputations are at stake. They've got to buy the car back when odometer fraud is uncovered. They can get caught up in lawsuits that become public information.

“My advice to dealers is to know who you buy from. I can't believe some stories involving dealerships. Like the guy driving a transport who shows up at a dealership. They buy three cars off the truck. From someone they never saw before in their lives.”

Odometer tampering just keeps rolling along. But these days, violators are going up the river on felony convictions.

For instance, Morse's office put away 18 people in a big rollback ring in little Boaz, AL, pop. 7,000.

Fifty-five felons went to prison for similar criminal behavior in a Springfield, MA, case, and a bunch more in Cleveland, TN.

“In Cleveland, every car coming out of the local auction was a rollback,” says Morse. “Forty people went to prison, and there are only five used-car lots in the city.”

Morse describes the major auction houses as his best friends.

“We work closely with them,” he says. “I'm still trying to convince them to let me in their data bases.”

As a federal officer, Morse hesitates to criticize state governments. But he sees them as a big part of the problem.

“You can't roll back the odometer if you can't get the mileage changed on the title, and a lot of states have poor titling procedures,” he tells the 2002 Conference of Automotive Remarketing.

In some states, the con artists easily obtain duplicate titles by claiming they lost the originals. “They'll give you a new title without requiring identification,” says Morse.

In a New England case, a rogue posing as a dealer readily got a dealer's license so he could better sell cars with tampered odometers.

Says Morse, “Do you know who licenses dealers in Massachusetts? The township clerks. I asked one, ‘Does anyone go out to see if an address on a license application is valid?’ She said, ‘The only time we leave the office is for lunch.’”

Conversely, Florida Department of Motor Vehicles agents have traveled the country investigating title and odometer fraud. The Florida DMV is also certifying its clerks and paying them more in the hopes they'll be more vigilant and stick around longer.

New Jersey historically was a problem state for vehicle title washing. Morse criticized that in a local newspaper interview. He was on the hot seat when the story came out. But the state legislature now is tightening up on titles.

“I embarrassed them into doing something,” says Morse.

Today's rollback artists use the latest technology to beat the system.

“Most odometers are now digital, but you can buy digital rollback equipment on the Internet for $1,800-$2,000,” says Morse.

His father was a car dealer for 30 years, back when odometer tampering was widespread.

“He was involved in all this stuff,” says Morse.

Many of today's dealers still don't consider it a serious offense.

“Dealers will say, ‘Oh, we had a clocked car, bought it back, and everyone was happy.’ I ask, ‘What would you do if you discovered the car was stolen? Buy it back? No. So why do it when rolling back odometers is a felony punishable by prison time?’”

Even the guys doctoring the odometers don't seem to think they're doing anything terribly wrong.

“They consider themselves businessmen, rather than criminals,” says Morse. “Until they go to prison.”

Steve Finlay is editor of Ward's Dealer Business. His e-mail address is: [email protected]