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Dozens of Car Dealers Shut Down for Temporary License Plate Fraud Following Streetsblog Investigation

And seven dealerships identified by Streetsblog as possible temp tag sellers are now under criminal investigation, officials said.

12:05 AM EST on January 8, 2024

Illustration: Martin Schapiro

Regulators in New Jersey and Georgia are clamping down on the pipeline of illegal temporary license plates to New York City, shutting down dozens of car dealerships for fraudulently issuing the paper tags in recent months, according to records obtained by Streetsblog.

At least 32 dealerships in those states — two major sources of bogus paper plates in New York City — have had their licenses revoked or suspended for violating temporary registration rules since April, when a three-part Streetsblog investigation revealed a vast black market for so-called temp tags stretching from dealer compounds in remote corners of New Jersey and Georgia to streets in the Bronx. Another three dealerships were put on probation.

Regulators have hit those dealerships with more than $150,000 in enacted or proposed fines — imposing far larger penalties for temp tag fraud than they have previously, according to 2,400 pages of disciplinary files obtained through public records requests.

Officials in Georgia and New Jersey also said that seven dealerships identified by Streetsblog as possible temp tag sellers are now under criminal investigation.

The ramped-up enforcement is part of a larger effort to throttle the shadow economy for illegal paper plates in the wake of Streetsblog's series, which showed how New Yorkers rely on the out-of-state tags to keep cars unregistered, to drive on suspended licenses or to commit more serious crimes with their identities concealed. Lawmakers in New York City, New Jersey and Georgia have introduced or proposed legislation on the issue. New Jersey has also proposed sweeping regulatory reforms.

A car dealership can only legally issue a so-called temp tag when selling or leasing a car, to tide customers over until they receive their metal plates. But Streetsblog found that, beginning during the pandemic, dealerships began illegally selling large numbers of tags to customers using them to avoid accountability on the road.

Regulators have shut down some of those dealers previously, but the fines they imposed were often small compared to the vast profits to be made selling tags. One such example is F&J Auto Mall, a New Jersey dealership that issued 36,000 temp tags in 2021 before being shut down for temp tag fraud. Those 36,000 tags were worth millions of dollars on the black market, but New Jersey sent the dealership a letter saying its fine would be just $500.

That appears to have changed. The New Jersey Motor Vehicle Commission is now proposing much larger fines for dealers caught illegally issuing tags. One Jersey dealer, JD Auto Mall, is now facing a $31,000 penalty for just 16 temp tags that JD allegedly issued "without a bona fide sale," according to a letter the MVC sent the business in November. That penalty consists of multiple fines per illegal tag — a change from the small, one-off punishments imposed previously.

JD Owner Jorge Ventura Reyes did not respond to a request for comment.

In total, regulators identified more than 11,600 temp tags issued illegally by the 35 dealers. But that number is likely an undercount — it appears auditors only examined a limited number of temp tags issued by each dealer. And the number of dealers shut down for temp tag fraud may be higher too, as the records obtained by Streetsblog appear to be incomplete.

Streetsblog's story on an illegal temp tag sales ring connected to a New Jersey car dealer was followed 11 days later by a state investigation into the dealership that led to its license being suspended.

Some of the shuttered dealerships were identified as possible temp tag fraudsters in Streetsblog's series. That includes Gift Cars, a New Jersey dealership whose owners were the subject of a Streetsblog investigation in June that revealed connections between the business and an illegal temp tag sales operation in New Jersey and New York. Eleven days after that story's publication, the MVC audited Gift Cars and found evidence of temp tag fraud, the records show. The agency suspended Gift Cars' license in August and proposed a $10,000 fine for the temp tag violations.

Neither Nazareth nor David Shahinian, who run Gift Cars, responded to requests for comment. In a letter to the MVC obtained by Streetsblog, the dealers asked the agency not to suspend or revoke their license, saying they had not done "any wrongdoings" (sic).

Most of the 35 dealerships that were shut down or put on probation were registered to a network of warehouses and office buildings that Streetsblog identified as major sources of temp tag fraud. The pending regulatory reforms in New Jersey would make it harder for such facilities to operate. Regulators in Georgia have also identified dealer compounds as havens for temp tag fraud in the state.

A dealer compound in Bridgeton, New Jersey, where dozens of businesses have been caught fraudulently issuing temp tags. Photo: Johnny Milano

The New Jersey Motor Vehicle Commission declined to comment for this story. The Georgia Department of Revenue, which regulates car dealers in the state, did not respond to a request for comment.

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