Justice Department announces takedown of catalytic converter theft ring (opens in new tab)

> They should also consider targeting and auditing shops that buy used car parts. Making it extremely difficult to fence these things will be practical and useful because they aren't sold and reused as is

California just passed a law to this end, which is pretty straightforward and effectively turns the grey market into a black market. A black market will still exist, but it will be a lot harder for legitimate junkyards, auto repair shops, and recycling facilities to look the other way.

It basically mandates KYC (Know Your Customer) procedures for companies that buy or sell catalytic converters, and it makes buying or selling a catalytic converter without documentation that it was obtained legally a crime. It won't completely eliminate the problem, and it'll be harder unless Arizona, Nevada, and Mexico also take similar steps. But it should also enable more targeting and auditing. One part of this case was filed in California, so I bet they had some kind of sting operation that was made a lot easier when they can lean on a low-level junkyard dealer to testify against the people higher up in the black market.

https://www.latimes.com/california/story/2022-09-25/newsom-s...

It used to be that back when local cops cared about property crime this was standard operating procedure. When I was a kid if you etched a serial number into your bike frame and parts and registered it with the local PD you were practically assured you’d get your bike back when it inevitably showed up at a pawn shop or similar.

I heard that stolen cats are sent by the rings to China for recycling/extraction. So just looking at domestic resellers isn’t going to help much, and you need to start peeking into shipping containers that head back to China usually very empty.

It's literally "going out of style".

Gotta get all the cat converters you can before all the cars are electric!

    They should also consider targeting and auditing shops that buy used car parts

In this case they took out the palladium and sold it to a refinery. Also, VINed parts, like airbags, have been found being shipped to countries that don't care about or can't enforce the sale of them.

So, it'd eat into some of the criminal's profits, but probably not enough to significantly reduce theft. So efforts are likely better spent elsewhere.

My mother-in-law's neighborhood has had 5 stolen in the past couple of months. And it isn't that big of a neighborhood. Maybe 50 houses in total?

They already have a lot of scrutiny on used catalytic converters. It sounds like this ring might have been smelting the precious scrap.

install a cat shield aka a plate that covers your cat. Mine got stolen, a shield was $350, they totaled the car for over $3500 by taking the cat if I would have fixed it due to fucking up the exhaust pipes and o2 sensor.

Wow. I googled DG Auto, and they even have an app for thieves to check prices.

https://dgauto.app/

Really wish the cops would download a list of who installed this app and find their location data on top of a map of reported thefts...

You are missreading it. :)

That's one group of thieves selling 38 million worth to them. Later on in the document more groups of thieves are listed, getting paid 13, 45, and 6 million dollars. But that's still not necessarily the whole amount paid to thieves.

Also, it's quite possible that some of their business, and thus sales to refineries was legitimate. None of their partners are listed in the press release as being arrested.

This makes me very curious how many steps in the laundering chain you have to go before it’s no longer indefensibly obvious that something's not right with the sourcing.

Crime has huge margins. If it didn't nobody would bother.

I thought the main selling point was scrapping the catalytic converter for the platinum and palladium inside. In that model a ID system for the catalytic converter itself isn't going to put to much friction on illicit activity.

People would grind off the serial numbers and sell them on the secondary market, or for the metals. With motorcycles, for example, motors and frames have vin numbers stamped to help prevent this, but you’ll sometimes see cheap parts for sale with the vin cleaned off.

I wonder if the scheme outlined is more or less stringent than the US's legal ability to track guns. For now, they require serial numbers, but my understanding is that the ATF is disallowed from using computers to track firearms. It would be ironic if catalytic converters ended up with stricter controls than guns.

You have to license the buyers and make them account for every lb they recycle by having the serial numbers to compare it. They would have to submit those number as soon as the buy one. If the converter doesn't have one they can't buy it, and setting up stings for that would be pretty easy.

I don't think serial numbers would help in this case, as the converters are stolen, precious metals extracted, and then those metals are sold. The bit that would likely be stamped with a serial number is likely discarded.

That's one of the things an auto shop can do for you. You don't need a new serial number or database; your VIN is good enough. But of course a thief can grind that off.

The other one is welding on the converter. It doesn't make it unstealable; but it's just not a quickie extraction anymore.

If your question is (as it should be), "What about legitimately fixing the converter? Can you still do that?" , I don't know.

When did that happen? A friend of mine had one stolen from next to our place just a few months ago.

What did you do to protect them, install a plate?

1) maybe they ran the ring for more than a decade?

2) 1600 is just the number reported. I’d imagine not many people report the thefts, especially if your car insurance premiums will rise (insurance companies raise premiums even if you don’t make a claim if they have information that suggests your neighborhood or places you frequent are at increased risk of theft)

3) possibly the rate of catalytic converter thefts has risen dramatically in 2022 compared to 2021

> > Defendants ... operated DG Auto... DG Auto sold the precious metal powders it processed from California and elsewhere to a metal refinery for over $545 million.

> How did they make $545M in a racket whose upper limit on annual profit is a tenth of that? Perhaps that figure represents DG Auto's gross revenue, only a portion of which comes from recycling converters?

Because the converters themselves are only worth $1k each on the black market, but apparently quite a bit more if stripped and processed further, to bare precious metal powders, which are much easier to work with.

There's no need for a nation-wide ring with bikes. With cats, it is because you need connections to a refinery that will accept your stolen cats... but bikes can be fenced locally in a bike store.

Is there a national bicycle theft ring? I have a vague impression that it's mostly small groups. Steal a few bikes, maybe swap some parts around, sell them as used bikes, repeat.

This takedown seems to have been possible because there was a central group that was moving hundreds of millions of dollars of stolen goods - maybe even billions if you take "cost to manufacture" instead of "resell value". Why would a bike theft ring that centralized exist?

Doubtful. Thieves steal catalytic converters for the Rhodium in them. Rhodium is more expensive than gold per troy ounce.

It’s mostly not organized. (Though there do seem to be some rings exporting high end bikes to Mexico for sale.)

> This theft is so costly and prevalent in my neighborhood, it's like $2,500 per 100 people. In 2 years, I've had mine stolen twice.

Bay area? i thought i was bad in Socal, I had my Gen 2 Prius siting outside a residential area near a major university town while I was away in EU and had mine stolen. I had to junk a decently running hybrid because of this as Toyota had a shortage of them and since the Prius was designed for the California market without the Toyota stamp on the cat its an instant fail for emissions, even if the ppms are within spec with an aftermarket part: no exceptions!

It's literally the most ironic thing I've experienced and I worked in the auto industry and at VW through Diesel gate!

This is so wide-spread and many good cars just ended up in the scrap yard when it was an easy fix to just allow for temp smog exemption, mine still for 40+mpg with worn batteries and thus exceeded most of what is sold on the market now, but because of regulatory capture and how insurance policy works it was the most expedient albeit wasteful solution--this is what I fear AI will bring about in most cases if left to its own devises and unchecked, too. Some made it to neighboring states without this requirement (OR/AZ/NV/CO) but the issue was logistical because you'd need a temp Cat installed to drive to said state, but in early '21 you could get them for <$1000 and recovered your costs as they soared in value as gas inflation pries kicked in gear.

I actually pitched this as a to a friend who was having his 1st kid at the time, he offered me funding (mid 5 figures) but I couldn't work with him due to the child so I left the idea and took off to EU instead. I had anticipated and projected healthy returns, $2k/unit after expenses, little did I know it would go to $7k+ per unit as I found my sources for the legwork: 49 state legal cats, mechanics to install, and drivers ready to go (mainly me). It's mainly what I had done at VW after all, logistically speaking.

There was a total parallel economy in shield installs, part/chassis swaps and tracking devises etc... because it got worse not better. I attribute a lot of this to the issue wit unemployment payments, and general lack of help for those during covid people got desperate and would probably be foisted into this easier than before.

> There is no way in hell the buyers don't know the volume and source is complete wrong and criminal.

I sold my defective OEM Prius cat on EBay (I bought it knowing it was broken on my car and installed new in 2018) for parts to test how liquid the market was before I went looking for funding (post above) and doing DD and market research, it was rather easy and someone paid within two hours for the reserve price ($1000+).

Shipping was the biggest headache/cost of the whole process, but the guys on ebay buy Platinum, Platinum, Rhodium are still around.

While I don't deny some larger brokers at work, possibly OEMS, the fact is that everyone was grifting during covid, the stock market and real estate was soaring, corpo America (and the World) was flush wit bailout money etc... This wasn't even a blip on the radar of the billions being made.

Some of them are in their 20s. I can't imagine myself being part of a nationwide theft ring in my 20s. What a wild life.

The root of this problem, like the root of most problems like pollution, increased deaths, noise, suburbs is cars.

I've sold lots, some of which were obviously chopped out of vehicles with a sawzall (vehicles that I legally owned, btw). They've always scanned my ID, took my thumb print, and mailed me the check after a couple of days.

Any scrapyard will offer you cash for it, just call. OEM are worth much more, hence the rise of cat thefts.

I looked into this a year ago when I bought a house and the previous owner had left two catalytic converters in the garage from old project cars.

The conclusion I came to was that if I didn't look shady, the cats still had their mounting flanges on them (not sawed off), and no problem giving the recycling yard my contact info, I'd have no problems.

Only thing that will help is serious prison sentences and the right to defend property with deadly force.

Many areas of the country there is no consequences.

From the press release:

> They knowingly purchased stolen catalytic converters and, through a “de-canning” process, extracted the precious metal powders from the catalytic core. DG Auto sold the precious metal powders it processed from California and elsewhere to a metal refinery for over $545 million.

"You follow drugs, you get drug addicts and drug dealers. But you start to follow the money, and you don't know where the fuck it's gonna take you."

Ivory isn't like platinum. There are tons of recyclers that actually sell the precious metals they have obtained in a legal way. Scrap yards can sell their converters to middle men, who then resell them to the refineries. That makes it super hard to differentiate between legal and illegal bulk resellers for the refinery. In this case, the middle men (dgauto) handled the first recycling steps (removing the metal core from the converters), thus making it even harder or impossible to trace the metals back to stolen parts.

Ivory, on the other hand, can be assumed to be illegally produced in 99% of the cases. If there are legal ways to even obtain new ivory, it's on the buyer to prove that their source is legal. That's not the case for catalytic cores.

They're being sold to you and everyone else in new catalytic converters, for one.

There are legitimate sources for these precious metals, and legitimate uses too. The parallel to ivory doesn't make any sense in that you don't have to kill Elephants to get Rhodium.

Around here the just went into the dealership and cut them off the new cars in the lot. Then brazenly did it with another dealership a few days later!

This entire thing ends up being a Tesla marketing scheme

For real, this is one of the reasons my next car's going to be a diesel. No cat to steal.

Also fuel efficiency, and until very recently, diesel was cheaper than petrol here due to tax reasons. (even regular. Not Ag-diesel)

I'd get an electric car, if they were cheaper/available used. (road tax is based on CO2/km, so an electric one is free.)

No catalytic converter theft, no gas gouging, no oil changes. I read things like this and is just makes me hope more people get on board.

In the meantime, I’ll be sticking with my Tesla, thanks.

Nope, they are seized as evidence and are also subject to a claim for criminal asset forfeiture contingent on conviction; the criminal forfeiture claims are part of each indictment.

I think that if you paid for your home with criminal activity you should forfeit that to repay the victims of your crimes. If your legal and illegal stuff is together, tough shit.

I wonder if they limited the seizure to second homes, or basically just kicked the alleged criminals' families onto the street.

Is this a joke? Surely he's not actually doing this and posting about it in public?

Thieves don’t use sockets though, they use saws.

What's the alternative?

What incentives do you mean? Catalytic converters protect all of us from harmful compounds in exhaust, and I don't see why to fight thieves we need to breathe bad air.

At the very least it should be legal during the time you take to earn the money to pay for the replacement, and on the way to the shop, like it's done with getting your car registered.

Move out of the city. Many rural areas don't require emissions testing, so there's no way to stop people from omitting them. Beware noise ordinances, though.