Footage shows police alerted TxDMV to security flaws on paper marks years ago – NBC 5 Dallas-Fort Worth

NBC 5 investigates has revealed new evidence that top Texas Department of Motor Vehicles officials were warned two years ago of a major security flaw in the system that issues temporary license plates, but the DMV did not completely close that loophole until last month, days after we asked Why.

The security hole in the temporary license plate issuance system allowed crooks to make paper plates for cars that should not be on the road.

Officials investigating brand fraud, complaints about lax security and supervision at DMV have given criminals the opportunity to obtain dealer licenses, infiltrate the DMV system and create a massive black market for the sale of paper brands.

A Travis County police unit leading state efforts to combat the scam now says a third of all Texas temporary marks issued last year, more than 1.2 million, were created by dealers they have investigated for fraud , and that crooked dealers earned more than $ 64 million. sold tags alone last year.

In an interview in December, Whitney Brewster, DMV’s CEO, acknowledged a significant security flaw in the system used by car dealers to print temporary tags.

“We have a system defect,” Brewster said at the time.

CRIMINAL INFILRATES THE STATE TAG SYSTEM

That defect allowed crooked dealers to get thousands of temporary marks using the vehicle’s identification numbers, which are blatantly fake.

So fake that even a beginner could spot them.

Many of the VINs contained special characters such as periods, dollar signs, and exclamation marks at the end of the VIN numbers. The car’s VIN numbers do not have special characters.

Police showed NBC 5 how a small car dealer suspected of large-scale fraud created 13,000 tags using fake VIN numbers, and DMV’s webDEALER | eTAG system did not stop them.

Police told NBC 5 investigates that retailer is one of many who printed tags and sold them illegally at a profit in a massive black market.

When NBC 5 investigates confronted Brewster about the security flaw last month, she said her agency would go fast to fix the system.

whitney brewster


NBC 5 News

Texas DMV Executive Director, Whitney Brewster, during an interview with NBC 5 Investigates in December 2021.

“It does not stop special signs. It is the defect that is being worked on now and the solution to that defect will be implemented as soon as possible,” Brewster said.

In a new statement to NBC 5 investigates four days after that interview with Brewster, the DMV said that the department “… implemented a technology update on December 6, 2021 …”

The agency said the vulnerability was “… identified in late November.”

But four Texas law enforcement officials spoke with NBC 5 investigates said they warned the DMV about that security hole two years ago.

“We told them in 2019,” said David Kohler, a sheriff’s deputy from Central Texas.

Kohler is one of the officers who met with top employees from DMV in December 2019.

“We told DMV at this point that the criminals have infiltrated webDEALS.”

David Kohler, the sheriff’s deputy in Central Texas

NBC 5 investigates obtained a recording of the meeting in 2019 from Sgt. Jose Escribano, an investigator from Travis County Constable’s Office, who also attended the meeting.

In the recording, several officers, including Kohler and Escribano, question why the DMV system does not prevent people from using fake VIN numbers to get tags.

“The system will allow you to generate a buyer’s tag with the wrong VIN,” Kohler says in the recording.

david kohler


Jose Sanchez, NBC 5 investigator

David Kohler, a sheriff’s deputy in central Texas, talks to NBC 5 Investigations into the proliferation of temporary paper marks on Texas cars.

A police detective warned the DMV that he saw tags issued to fake VINs with a dot in them.

“They certainly should not be able to put a punctuation mark there after the VIN of a motor vehicle,” said Captain Ed Martin of the Vidor Police Department.

DMV HAS THE ABILITY TO PREVENT FAKE VINS

According to the audio, several top DMV officials attended the meeting. Among them Jeremiah Kuntz, who at the time was director of the department’s vehicle title and registration department. In the recording, Kuntz said the DMV has the ability to prevent fake VINs from being entered into the system.

“We could lock it out,” Kuntz said.

But, Kuntz said, as they tried to tighten security, car dealers complained.

“Generally, when I screw them down, I start getting pushback on the other side of things, because I have a very vocal business that sits on the other side,” Kuntz said.

Jeremiah Kuntz


NBC 5 News

Jeremiah Kuntz, former Texas DMV director of title and registration.

In the audio, Kuntz said some trailers and unique vehicles may have unusual VINs that contain more or fewer numbers and letters, and the DMV does not want to make it too difficult for dealers to print tags.

But police are withdrawing, arguing that no one should be able to enter periods or 18-character VINs for cars that normally have 17-characters.

“There has to be a way to lock it down to where you can not put more than 17 in it for a motor vehicle and keep the punctuation marks out of it,” Martin said.

Kuntz told officers that the DMV would need more money from the Legislature to reprogram the system.

“It’s not like we have infinite amounts of money over here to make all the code changes that everyone wants.”

Jeremiah Kuntz, former DMV director for title and registration

Kuntz has since left DMV.

We reached him on the phone and played some of the meeting sound for him. He said he remembered the meeting but declined to comment on it and would not say whether he informed his boss, CEO Brewster, about the issue in 2019.

NBC 5 asked to interview Brewster again. but the DMV staff would not allow us to talk to her.

A spokesman told us that DMV “… routinely cooperates with our law enforcement partners …” and said: “Over the last many years, TxDMV has implemented many system improvements.”

He said an upgrade in 2020 prevented special character VINs from being manually entered into the system, but that a defect still allowed special character VINs to be added through a file upload.

It was fixed in December and closed the loophole that frustrated officers who raised concerns years ago.

“I really do not understand it. I do not know if it is incompetence, I do not know if it is incompetence, or I do not know if it is a lack of understanding of what is really happening,” Kohler said.

Police told NBC 5 investigates these punctuation and exclamation marks were often added to VIN numbers by people trying to hide rescued or damaged vehicles that cannot be legally registered because they are unsafe.

Officers at the state’s top unit for papermark fraud said security holes at the DMV have flooded Texas roads with so-called “ghost cars” or cars with paper marks sold by unscrupulous dealers who can enter false information into the state system, making it difficult for police to identify the rightful owner of a car.

José Escribano


Jose Sanchez, NBC 5 investigator

NBC 5 Investigative Reporter Scott Friedman, left, talks to Sgt. Jose Escribano of the Travis County Constable’s Office on Texas’ papermark problem.

“You just gave them an instrument so they can cheat. The State of Texas, Texas Department of Motor Vehicle. Their system is ready and ripe for fraud,” Escribano said.

In December, DMV’s chief executive agreed that brand fraud has become a crisis.

“This is definitely an emergency. We are looking at all possible solutions we can,” Brewster said.

The question now is whether more could have been done to prevent that emergency years back?

WINE NUMBERS ARE NOT THE ONLY ERROR

The problems with DMV’s tag system go far beyond this one security flaw.

NBC 5 investigates‘reporting has shown how DMV does not fully treat people applying for car dealership licenses. It has given criminals the opportunity to become licensed dealers, gain access to the system and make millions by illegally selling paper stamps.

Dealers should only issue paper marks for vehicles they have actually sold and may not sell marks.

After NBC 5 investigates issued a series of reports on the extent of the problem last fall, recommended an advisory committee from DMV to take fingerprints of car dealership license applicants.

The DMV board will consider that recommendation later this month. The board is also considering new restrictions on the number of brands a dealer can issue in a calendar year.

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