‘Organized criminal enterprise’ busted in Austin tied to fraudulent paper tags, inspections

AUSTIN (KXAN) — An “organized criminal enterprise” accused of cranking out fraudulent vehicle inspections and paper license plates in Austin was recently busted, according to authorities — just as the state prepares to put the brakes on this years-long problem.

Fraudulent temporary tags are often used to mask criminal activity — from avoiding tolls to turning vehicles into “ghost cars,” allowing criminals to avoid detection and hide in plain sight.

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“The location we’re going to come up on here in a minute … that’s where the investigation led us,” said Cpl. Mike Bradburn with the Travis County Constable’s Office Pct. 3. “Let’s see if I can get you a better vantage point up here.”

Bradburn took KXAN for a drive past a blue building in Austin where he says the interconnected fraud — involving two car dealerships licensed in Travis and Bastrop counties, multiple people and at least two state vehicle inspectors — allegedly took place. It’s the site of a recent bust by the Texas Department of Public Safety.

“It was very helpful to have Texas DPS assist us,” Bradburn said. “Because this is such a large location with so many people.”

KXAN could not verify everyone who works at the location is implicated in the alleged crimes, so we are not identifying the place or people involved at this time.

A person who answered the phone and identified himself as the man described in court records as the owner and operator told KXAN: “No comment. I need to talk to my lawyer.”

Firearms and fraudulent tags, inspections

Court records don’t say how many fraudulent paper license plates and inspections were produced related to this location but Bradburn estimates the amount to be in the “hundreds.” Court records show one was tied to a federal bank fraud case. The shop is also accused of undercounting the value of vehicles sold to avoid paying county taxes and bypassing or rigging required emissions tests in Travis County, Bradburn said.

One of the alleged buyers was charged with tampering with a government record, a misdemeanor. The woman paid $180 for a temporary paper license plate through Cashapp with the comment, “For dealers tags,” according to court records. One possible reason: She was listed as a “Toll Scofflaw” with the Texas Department of Motor Vehicles and went this route, according to the complaint, to “circumvent the TxDMV hold on her vehicle registration.”

Her attorney told KXAN they had “no comment.”

Illegal inspections and temporary tags were sold as a bundle for $180, according to court records. In one public Facebook post from last year, the manager of a dealership licensed in Bastrop County but accused of operating out of the lot in Austin, offered to “trade” a Cadillac Escalade for “firearms.” That, Bradburn said, caught his attention.

“A dealership advertising vehicles for sale for guns — that’s concerning,” Bradburn said. “Seeing some of the threads I read, that was rather concerning.”

In another post, inspections were offered up for sale for vehicles that can’t pass otherwise. While safety inspections will go away next year, emissions testing will still be required in 13 Texas counties in to meet federal ozone standards, including Travis and Williamson.

“YOUR CAR WONT [sic] PASS INSPECTION WITH THE ENGINE LIGHT ON IN TRAVIS COUNTY (unless it’s 25 years or older),” the post said, “quit being a cheap a– and either fix it or pay my fee to get it done.”

“I don’t have any comment on the allegations,” the manager of the dealership that was licensed in Bastrop County said when reached by phone. “The state of Texas and Travis County is allowed to pursue alleged criminal activity.”

As KXAN drove past, we noticed 10 U-Hauls parked in front of the closed Austin dealership. Bradburn, who investigated this case, didn’t know why they were there. After we asked U-Haul about it, the company said it was unaware of the criminal charges and “immediately dissolved their affiliation” with an inspector operating out of this location, who signed up to serve as a rental pick-up and drop-off location for moving equipment last August.

“Upon learning of the arrests and alleged illegal business practices at this independent dealer location, which are unrelated to U-Haul and our customers, we immediately dissolved their affiliation,” said U-Haul spokesman Jeff Lockridge.

The inspector declined to comment through an attorney.

In October, the TxDMV “revoked” the license for the Bastrop County dealership linked to a small office space in Bastrop County allegedly operating in Austin — and ordered the owner not to sell cars for five years. The reason listed is the dealership “obtained an excessive number of buyer temporary tags relative to motor vehicle sales reportedly sold by the licensee,” records show. The woman who owned the dealership had a “participating role” in the scheme and was charged with the unauthorized selling and distributing of temporary tags, a state jail felony, records show.

“We ask everyone to withhold judgment to her involvement,” her attorney said. “After thorough investigation and examination of the facts and involvement of all personnel, we fully anticipate her to be cleared of any wrongdoing.”

‘Easy way to make quick money’

The Austin-based dealership was closed in December “due to non-renewal,” the TxDMV said.

Around the same time last year, a man dubbed the “Used Car King of New York” was sentenced to more than four years in federal prison for illegally producing and selling hundreds of thousands of Texas paper license plates in a nationwide scheme netting more than $200 million.

“They find the easy way to make quick money,” Bradburn said about the widespread fraud that has extended far beyond Texas’ borders. “I probably get called by New York PD three to five times a week. They still see the mostly fraudulent Texas tags in the system now.”

One way he fears criminals will adapt is by shifting tactics to counterfeit metal plates. He hopes a new law to replace paper plates next year with metal ones will drive change, but he is also realistic.

“Criminals are going to find a workaround on the low level or they’re going to make fake plates,” he said. “Criminals are always going to adapt. They’re always going to find a way to make money.”

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“They’re starting to see counterfeit actual license plates in New York from various states,” Bradburn added. “So, I imagine when we do away with paper tags, we’re going to see fraudulent license plates.”

TxDMV ‘on track’ to meet deadline to eliminate paper tags

The Texas DMV says it’s on track to implement that new law, House Bill 718 — which takes effect July 2025 — sparked, in part, by years of KXAN investigations.

The state agency is now working with industry and consumer advisory committees, designing three new license plates “to replace certain forms of existing paper tags” and drafting a plan to make sure the law is enforced and dealers have enough license plates on hand when cars are sold.

The TxDMV is also procuring a new inventory management system to handle allocating, tracking and distributing the new tags. It’s unclear how much this will cost taxpayers. The agency must adopt a final rule by Dec. 1 after public input.

“Much of the work to date has focused on the details necessary to create processes and procedures based around the bill’s regulatory requirements,” said TxDMV Media and Communications Officer Adam Shaivitz.

New training opportunities are also starting to “begin transitioning many dealers from submitting sales transactions in paper form to electronic processes,” he said. “All work is being scheduled to meet the July 1, 2025 effective date of the legislation.”

Investigative Photojournalist Richie Bowes, Graphic Artist Wendy Gonzalez, Director of Investigations & Innovation Josh Hinkle and Digital Director Kate Winkle contributed to this report.

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