Auto thieves move from exporting stolen cars to selling them in Canada. Loopholes make it possible | CBC News

The fight against Canada’s worst-ever auto theft epidemic has largely focused on ramping up inspections at shipping ports, where organized crime groups have exported the overwhelming majority of stolen vehicles.

But criminals are adapting, police say, by increasingly selling hot vehicles in Canada to unsuspecting buyers with little protection, exploiting a weakness in provincial registration systems that veteran investigators argue needs to be fixed.

“The market is so lucrative it’s easy cash,” said Det. Sgt. Greg O’Connor of Peel Regional Police, west of Toronto.

While it is impossible to know what criminals do with all stolen cars and difficult to track shifting trends, police now estimate nearly one-third of stolen vehicles are being resold in Canada, marking a significant increase from just six months ago when the vast majority of vehicles were believed to have been exported.

And often, buyers have no idea.

Derek Crocker bought a used Ford F-150 pickup truck from a dealership in Toronto in 2022. Just a few months later, his own investigation revealed the truck’s vehicle identification number — or VIN — had been replaced, mirroring the VIN of a similar truck registered in Utah.

“The whole reason you buy it from a dealership is so you don’t have to worry about dealing with that sort of thing,” he said.

In retrospect, there were small tells.

After Crocker entered what should have been the truck’s unique VIN in Ford’s app, the function to remotely start the vehicle never worked. The app also listed the vehicle as being located in the United States and indicated a different amount of fuel than his own vehicle tank was holding.

But it wasn’t until his F-150 was in an accident and required body work that the problem with the VIN was revealed. The repair shop ordered parts based on the VIN it saw on the dash. But the parts did not match.

“So I Googled the VIN number that was on my truck, and I found a truck for sale in Utah,” said Crocker.

It turns out that was the true VIN, which thieves had cloned, placing fake VIN stickers with the Utah truck’s VIN on top of the true number for the truck Crocker bought.

VINs are most prominently displayed on a vehicle’s dashboard, as well as on the ownership title. When a vehicle is stolen, the VIN is flagged across North America to prevent it being sold.

But criminals are replacing the VIN plate, often with one from a comparable vehicle that has been totalled, legally exported or one registered in another province or U.S. state. They may go through junkyards, export records or simply walk through a mall parking lot to find a VIN to clone.

In doing so, they re-VIN or “wash” the vehicle of its stolen status.

Crocker called police, who seized the vehicle and returned it to the insurance company of the original owner.

Crocker’s own insurance would not cover his loss because he’d — albeit unknowingly — purchased a stolen vehicle. After a long discussion with the dealership that sold him the stolen truck, his money was returned.

“They did nothing extra,” Crocker said. “They didn’t help me at all.”

How could 2 cars with the same VIN be registered?

Provincial centres that administer vehicle registration, such as ServiceOntario, do not have a system that checks if VINs already exist in other jurisdictions.

“You can have a vehicle registered in one province and the same VIN on a different vehicle registered in another and we need to stop that,” David Adams, president and CEO of Global Automakers of Canada, told a recent auto theft summit in the Greater Toronto Area.

Neither Canada nor the United States has a national vehicle registry. Multiple police agencies are urging federal and provincial governments to create one.

“The reality is this is a national issue. And that’s why a national registry that moves itself beyond any sort of provincial jurisdiction is important in all capacities,” Nick Milinovich, deputy chief of Peel Regional Police, said in an interview.

CBC News asked Ontario’s Ministry of the Solicitor General why the province’s database can’t detect whether the same VIN is actively being used in another province or state.

“If changes to the provincial registration process are required, we won’t hesitate to make them,” it responded in a statement.

How to spot a potentially stolen car for sale

While it is impossible to know precisely how many fraudulently registered stolen vehicles are back on the road, recoveries have surged.

“The number of re-VINS is just blowing through the roof right now,” said O’Connor. “It’s costing drivers, banks, insurance companies big money. It’s a massive problem.”

It is impossible to know the full extent of the illegal economy and the proportion of vehicle exported versus those kept in the country. But police forces across southern Ontario have reported a surge in recoveries of vehicles that have had their VINs altered.

Car buyers are being advised to look at the VIN on the dashboard and the pillar between the front and back driver’s side doors to see if the numbering is bubbling, a sign there may be a sticker on top of the real VIN.

Running the VIN through a paid service like Carfax could also yield key warning signs. For example: a vehicle that records show has been declared salvage after a crash later reappearing undamaged. Or a VIN with a sales and registration history almost exclusively in one province or state suddenly being for sale in another.

If an insurance company discovers a vehicle has a fraudulent VIN, the policy is voided. When police seized Crocker’s truck, insurance would not pay to replace it. He was only able to recover his money when the dealership that sold the stolen truck paid him out.

But police and insurance investigators have begun to warn of a proliferation of re-VINed vehicles being sold exclusively through social media platforms like Instagram.

“If you’re paying cash for that vehicle [in a private sale] or you do a bank transfer,” said O’Connor, “there’s no recourse.”

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Registry employees alleged to be in on the crime

Police also allege organized crime has recruited employees at ServiceOntario, the registration centres operated on behalf of the province that offer an array of services, including issuing licences and managing the database of registered vehicles.

At the end of 2023, Toronto police charged seven ServiceOntario employees with a collective 73 charges, including fraud over $5,000, tampering with a vehicle identification number, breach of trust by a public officer and trafficking in identity information.

They allegedly provided an auto theft ring with registered addresses for specific vehicle models. Once stolen, the same employees assisted the ring in “re-VINing” the vehicles.

Fraudulent VINs may never be detected, although Peel police alone have seized more than 50 such vehicles in 2024 alone.

At other times, employees at ServiceOntario have flagged suspicious activity, such as when the same person shows up dozens of times to register different vehicles. That was allegedly the case with Milton Hylton, who was charged with 168 counts of various Criminal Code offences in March.

He was released on bail, pending trial. No charges are yet proven.

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According to the warrant used to search his home and requested by Peel Regional Police Const. Gurinder Athwal, the 24-year-old travelled to “multiple ServiceOntario locations throughout the province and fraudulently registered vehicles.” Police say more than 100 vehicles were involved, and describe stolen Dodge Rams, Dodge Durangos and BMWs among them.

CBC News was present at the moment of Hylton’s arrest in Mississauga as multiple undercover police vehicles conducting surveillance moved in.

As investigators searched and then towed his silver Mazda, they say they found documents to register even more vehicles inside.

Hylton had just a few weeks earlier been banned from entering ServiceOntario locations without an appointment, because of suspicions. He was in the company of a woman he identified as his girlfriend. His sister was also arrested days later and now faces 36 charges of uttering forged documents and trafficking of stolen goods.

3rd-party registration being exploited

In a news release, Peel police describe Hylton as using “loopholes in the ServiceOntario procedures that allow ‘authorized’ individuals to conduct third-party transactions.”

While third-party registration is intended for car dealers, provisions for it mean nearly any individual can transfer registration of a vehicle or register a vehicle in another person’s name.

This process is typical in other Canadian provinces, too.

“It’s a huge problem,” said O’Connor. “And that’s how a lot of these vehicles are getting through.”

For instance, the warrant in the Hylton case alleges he transferred vehicle ownerships to both a speciality tool shop in Etobicoke and an automotive exporter in St. Catharines. Neither business authorized the transfers, and both insist Hylton is neither an employee nor known to them.

Were the vehicles in question stolen, the new registration would have detached them from their previous owners. Anyone buying the vehicles would be none the wiser and would have no insurance or other protection if the vehicle’s stolen status was ever uncovered.

Peel police say Hylton sold dozens of vehicles over a year through social media under the Instagram handle “Royalty in the Building.”

That name is associated with Facebook and Instagram accounts where apparent car buyers offer testimonials.

“I called up Milton. I told him I got my money up, I need plates, I need a car. And he got it just like that,” a person said in a testimonial while standing in front of a Honda Civic.

“Got my new SUV, fully loaded. Tints, light, rims, inside’s clean. Everything’s legit,” another person said in a testimonial.

“You give him your cash. You’re on the road. You ain’t got to go to ServiceOntario. You don’t got to do no running around,” said another.

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CBC News spoke with several police and insurance officials from across the Greater Toronto Area about third-party registrations.

Each insisted the loophole needed to be closed to prevent illegal transfers. But none wanted to speak on the record, citing the provincial Ministry of Transportation as a good partner they did not want to publicly besmirch.

Meanwhile, the auto theft problem continues to grow.

In 2022, an unprecedented $1.2 billion worth of vehicles were stolen across the entire country. By 2023, more than $1 billion was lost in just Ontario alone, according to the Équité Association, the national organization charged with reducing insurance fraud.

“It’s one of the top three revenue generators for organized crime,” said Milinovich. “It’s high reward, low risk, and an easy crime.”