Set forth below is a summary of federal odometer criminal statutes.
Note that in over 90% of the cases, these laws will not come into play for
the consumer. Typically the odometer rollback occurs well before the
dealer obtains title so the dealer will profess ignorance of the rollback.
Altering the mileage reading on a motor vehicle is a felony. Effective
July 5, 1994, the odometer tampering statutes were recodified from Title
15, U.S.C., to Title 49. The change was not substantive, though the
statutes were reworded. Some of the old and new statutes are:
- Tampering prohibition: moved from 15 U.S.C. § 1984 to 49 U.S.C. §
- False odometer statement prohibition: moved from 15 U.S.C. § 1988 to
49 U.S.C. § 32705(a)(2).
- Odometer fraud conspiracy prohibition: moved from 15 U.S.C. § 1986
to 49 U.S.C. § 32703(4).
- Criminal penalty provision: moved from 15 U.S.C. § 1990c to 49 U.S.C.
USAOs should contact OCL when an odometer fraud investigation is opened
so that information regarding potential overlaps with other cases can be
shared. OCL should also be provided a copy of proposed indictments and
informations at least one week before presentation or filing, so that
necessary approvals can be obtained.
A. The Nature of Odometer Fraud
Odometer fraud is a pernicious crime that robs thousands of dollars
from each victim it touches. See, e.g., United States v. Whitlow,
979 F.2d 1008, 1012 (5th Cir. 1992) (under sentencing guidelines, court
affirmed estimate that consumers lost $4,000 per vehicle). The television
news magazine 60 Minutes once characterized it as the largest
consumer fraud in America. Victims of this fraud are commonly the least
able to afford it, since buyers of used cars include large numbers of low
income people. In addition, consumers generally are unaware of being
Odometer-tampering involves several interrelated activities.
Late-model, high-mileage vehicles are purchased at a low price. The
vehicles are "reconditioned" or "detailed" to remove many outward
appearances of long use. Finally, odometers are reset, typically removing
more than 40,000 miles.
In addition to the cosmetic "reconditioning" of the car, the odometer
tamperer "reconditions" paperwork. Automobile titles include a declaration
of mileage statement to be completed when ownership is transferred. To
hide the actual mileage that is declared on the title when the car is sold
to an odometer tamperer, the tamperer must take steps to conceal this
information. These steps vary from simple alteration of mileage figures,
to creating transfers to fictitious "straw" dealerships to make it unclear
who was responsible for the odometer rollback and title alteration.
Alternatively, the odometer tamperers frequently destroy original title
documents indicating high-mileage, and obtain duplicate certificates of
title from state motor vehicle departments, upon which the false, lower
mileage figures are entered.
Whatever method is used, the result is the same. The odometer tamperer
possesses an altered, forged, or replacement title document (which is a
security under federal law) containing a false low-mileage reading. This
title is used to sell the car, for several thousand dollars above its
actual value, to a purchaser who is deceived regarding the vehicle's
remaining useful life by the altered odometer, by the vehicle's outward
appearance, and by the counterfeit, low-mileage title and odometer
B. Nature of OCL's Criminal Prosecutions
Odometer fraud is practiced by a variety of people, including:
- Organizations that roll back (or "clock") the odometers on thousands
of cars, wholesaling them to dealers who resell them to the public.
- Groups of individuals (commonly called "curbstoners") who buy cars,
clock them, and sell them through the classifieds, passing them off as
cars of a friend or relative ("I'm selling Aunt Sally's Buick for
- Individuals who only clock their own car to defeat a lease provision
or cheat on a warranty.
Thus, odometer fraud is a pervasive problem in the used car industry.
Indeed, the Department of Transportation, National Highway Traffic Safety
Administration (NHTSA), has estimated annual consumer loss from this fraud
as between $4 and $10 billion.
OCL works with the Odometer Fraud Staff of NHTSA, the FBI, the United
States Postal Inspection Service, the IRS, and numerous state agencies in
prosecuting odometer fraud. NHTSA's small Odometer Fraud Staff serves both
as the lead investigator in many of these cases, and as a partner with
other investigative agencies. The cases that OCL prosecutes typically
involve rings which purchase and sell hundreds, and often thousands, of
used cars annually. Major defendants in large odometer fraud prosecutions
have received prison terms of up to seven years under current Sentencing
Guidelines which do not permit parole. Sentences in the 18 month to three
year range are common.
Odometer fraud/motor vehicle titling fraud investigations generally
require coordination--both on a multi-jurisdiction level and on a
federal-state level. Rarely do such crimes occur within only one federal
jurisdiction. Where a target has operated only locally, or only been
involved in a small number of vehicles, prosecution by state or local
bodies is commonly the remedy.
C. Contact and Resource Sharing
Many states have law enforcement agents or department of motor vehicle
investigators who investigate odometer fraud activities. Early contact and
coordination with these agents in investigations not only will provide new
investigatory leads, but also can prevent later conflicts at the
state/federal level. OCL and NHTSA both have extensive contacts in the
odometer fraud investigative community that can assist this process.
AUSAs should consult USABook § 4-8.300, et seq., for assistance in
odometer fraud prosecutions. Discussion of odometer fraud as well as model
indictments, briefs, sentencing materials, and other useful litigation and
investigative information is part of USABook.
After consultation with NHTSA's Odometer Fraud Staff, OCL developed a
series of forms and form letters that are used in conducting an odometer
fraud/altered securities investigation. These forms, essential to tracking
down the "paper side" of an odometer fraud/altered securities
investigation, have been gathered in an "Investigatory Resources" manual.
A copy can be obtained from OCL by federal and state investigative
Additionally, OCL developed computer software that can be used to track
and organize an odometer fraud/altered securities investigation.
Information can be entered regarding individual vehicle documents. The
software sorts the information and provides summaries that are key to an
accurate description of the overall scope of the particular scheme. This
software is also available to federal and state investigative agencies. It
can be obtained by contacting OCL.
D. Other Offenses Commonly Charged
As the above description of the steps involved in odometer tampering
suggests, tampering rings also violate several additional federal criminal
statutes. Charges in odometer tampering cases, therefore, often include
allegations that these statutes have also been violated. Such charges more
accurately depict the totality of the illegal conduct than odometer
tampering charges standing alone.
The general conspiracy statute is commonly used in tampering cases. In
addition, it is almost always possible to charge mail or wire fraud (18
U.S.C. §§ 1341, 1343). This is because rollback schemes typically involve
various types of mailings or wire communications that further the illegal
activity. For example, virtually every state mails new titles to the
ultimate purchasers of vehicles. The Supreme Court has held that such
mailings satisfy the mail fraud statute's requirement that mailings be in
furtherance of the scheme. See Schmuck v. United States, 489 U.S. 705
Several cases have held that the foreseeability requirement for mail
fraud was satisfied by mailings of this nature. United States v.
Hubbard, 96 F.3d 1223, 1229-30 (9th Cir. 1996); United States v.
Shryock, 537 F.2d 207, 209 (5th Cir. 1976), cert. denied, 429
U.S. 1100 (1977); United States v. Locklear, 829 F.2d 1314, 1318
(4th Cir. 1987); United States v. Galloway, 664 F.2d 161, 163-65
and n.6 (7th Cir. 1981), cert. denied, 456 U.S. 1006 (1982);
United States v. Waldrop, 786 F. Supp. 1194, 1202 (M.D. Pa. 1991),
aff'd 983 F.2d 1054 (3d Cir. 1992), cert. denied, 508 U.S. 950
Title alteration and replacement practices also violate various federal
statutes. Possessing, uttering, or making a forged, altered, falsely made
or counterfeited title violates 18 U.S.C. § 513. Transporting such a title
in interstate commerce violates 18 U.S.C. § 2314. Motor vehicle titles are
"securities" within the meaning of these statutes. See 18 U.S.C. §§
513(c)(3), 2311. A title is "falsely made" even if it is genuine, but
contains false information or has been fraudulently procured. See
Moskal v. United States, 498 U.S. 103 (1990).
In addition to these violations, money laundering violations are
sometimes appropriate. It is not uncommon for odometer tamperers to use
checking accounts maintained in bogus names to carry on their businesses.
Of course, money laundering charges require a more detailed financial
investigation than may otherwise be necessary. Thus, such charges and
their attendant forfeitures are generally employed only where there are
significant assets of the illegal venture that can be forfeited to the
United States. The proceeds of the forfeiture will generally be used for
E. Restitution and Notice to Victims
Congress has encouraged communications between prosecuting offices and
victims of crime, as well as victim restitution. See, e.g., 42 U.S.C. §
10607; U.S.S.G. § 5E1.1(a); 18 U.S.C. §§ 3663-64. Accordingly,
investigating agencies generally provide notice to the victims of odometer
fraud that their vehicles have been subjected to tampering. This enables
victims to take appropriate steps to maintain their vehicles, given their
Notice also allows many victims to obtain compensation from dealers
which sold cars with altered odometers, regardless of who was responsible
for the alteration. For business and legal reasons, dealers frequently
compensate consumers who purchased vehicles with altered odometers.
Federal law permits consumers to obtain treble damages, or $1,500,
whichever is greater, when they are victims of odometer fraud. 49 U.S.C. §
32710. The courts have been liberal in protecting consumers in lawsuits
F. Administrative Warrants, Civil Penalties, Injunction Actions
Car dealers are subject to administrative inspection for compliance
with the odometer tampering and record-keeping provisions of the odometer
tampering laws. 49 U.S.C. § 32707. That section requires "probable cause"
for issuance of a warrant. It defines "probable cause" as a valid public
interest in effective enforcement of the law sufficient to justify
inspection or impoundment. OCL should be contacted for guidance when
administrative inspections are sought.
While criminal sanctions are usually appropriate for fraudulent
behavior of the sort involved in odometer fraud, civil remedies are
available for use in appropriate cases. Civil penalties of up to $100,000
for a related series of violations are authorized. The Secretary of
Transportation can impose the penalties, which are collected by the
Department of Justice. 49 U.S.C. § 32709(a).
The Attorney General can also seek injunctive relief to restrain
violations. 49 U.S.C. § 32709(c). State attorneys general may also bring
such actions. 49 U.S.C. § 32709(d). Such civil actions to restrain
record-keeping violations are often appropriate.
Detecting odometer fraud and odometer rollback
Federal Odometer Regulations
Federal odometer criminal
Utah odometer page
damages and counsel fees
Dealer tactics in odometer fraud cases
odometer fraud criminal
Federal odometer criminal
intent and federal
NJ odometer rollback case proof of odometer tampering
odometer fraud overview
Incidence of odometer
Odometer rollback claims
Auto Auction claims
General Fraud and Lemon Law
New Jersey used car lemon law