By John M. Glionna, Los Angeles Times, September 12, 1995

PHOTOGRAPH by the Los Angeles Times

LONG BEACH, Calif. — Bill Ports eyeballs the souped-up 1966 Mustang, runs his fingertips along its gleaming finish and coos like some teen-age drag-racer. “Now this,” he said in a half-whisper, “is a hot car.”

That’s hot, as in stolen. With a practiced eye and hand-held scanning device, Ports determines that two digits of the car’s ID number had been altered and another number had been virtually rubbed off the underbody.

Like tire-kicking used-car buyers, Ports and a handful of investigators surround the classic Ford, one of thousands of new and used exports on the scorching Tarmac outside Berth 199 of the Los Angeles Harbor–an ocean of exotic, high-priced cars, trucks and vans ready to be loaded onto a commercial carrier ship bound for Japan.

“Just a hunch,” said the 54-year-old Ports, a National Insurance Crime Bureau sleuth and former Anaheim police detective, as a tow truck arrives to impound the vehicle. “But I’ll bet this is going to make one Tokyo used-car buyer mad as hell.”

In the face of a shadowy, well-financed black market in illegal car exports, an overwhelmed task force is trying to fight back. The David-sized Outbound Enforcement team is weighted with the Goliath-like task of putting the brakes on a booming illegal flow of stolen cars exported from Southern California to international ports from Bangkok to Buenos Aires.

Formed three years ago, the 10-member team is made up of U.S. Customs inspectors and investigators from the CHP and National Insurance Crime Bureau.

“This job is worse than finding a needle in a haystack,” said Customs inspector Fred Parham. “Because you can usually forget about the needle. Most days, you can’t even find the haystack.”

Indeed, in the battle of the bogus auto exports, the bad guys are winning big time.

Of the 1.5 million vehicles stolen nationwide last year, more than 60% were recovered, according to insurance industry statistics. Of the rest, experts say, 200,000 to 400,000 were shipped abroad or driven into Mexico and Central America. Estimated losses exceed $7.5 billion annually.

In California–the nation’s leader in stolen vehicles–300,000 autos valued at $1.5 billion were stolen in 1994, most from Southern California. Insurance companies say about 20,000 were transported to Mexico and about 40,000 were exported overseas.

Through July, however, the Outbound Enforcement team had recovered only 174 vehicles. While investigators call this an all-time high–topping the 123 recovered last year–they concede it represents a fraction of the vehicles they estimate are being illegally exported through the L.A. port.

Indeed, for every vehicle they confiscate, they say, possibly hundreds more are shipped out to sea right under their noses–many packaged in huge freight containers mislabeled as personal effects, scrap metal or even detergent.

Task force members say their arrests–just 20 this year–suggest the difficulty of keeping pace with thieves who, like foreign drug lords, cover their tracks by working through middle men, leaving complicated paper trails behind.

As formidable a task as it is to corral illegal cars, the Outbound Enforcement team also is charged with overseeing all other freight shipped from what has grown to become the nation’s busiest seaport. It prowls for illegally exported handguns, currency and military and computer hardware sometimes bought by foreign nationals for export to hostile governments.

Working with area law enforcement, investigators this year confiscated $8 million in military electronics, including electron tubes used in guided missile systems and spare military parts bought in bulk en route to Ho Chi Minh City–to be used to repair tanks and other military vehicles, many left behind after the Vietnam War.

Still, their main mission is to distinguish between legitimate and illegitimate car exports.

Their turf consists of the far-flung L.A. port–portions of which lie in Wilmington, Long Beach, Los Angeles and San Pedro. It’s a modern-day water world the size of many cities, a maze of industrial waterways, warehouses and holding yards replete with 50 miles of dock space. Each year, thousands of foreign-flagged commercial vessels belly up for the loading and unloading of huge, indistinguishable cargo containers stacked like giant children’s blocks.

The 400 ships departing the port each month carry 90,000 wood- and metal-framed freight containers–more than 1 million annually. Some containers house elaborate false compartments to hide a bevy of stolen luxury cars, at an average retail value of $50,000 apiece.

“These cars are the pick of the litter,” Parham said. “Any car we confiscate people would be proud to put in the front row of any new and used car lot in America.”

Recently, insurance companies say, the demand for stolen U.S. vehicles has exploded with new markets in mainland China and former Soviet-bloc countries adding to the already lucrative Europe, Middle East, Australia and South America.

“For years, throughout the 1980s, we thought all the stolen cars were going to Mexico, but then we learned that the black market extended worldwide,” said W. Joseph Pierron, director of international operations for the National Insurance Crime Bureau.

“The demand is everywhere–from guerrilla wars fought in some parts of the world where both sides need all-terrain vehicles to new democracies in Eastern Europe and the former Soviet Union where an underground crime network has sprung up to fill the need.”

Around the world, U.S. cars are king. “Even if a car was made somewhere else, as long as it was taken from the streets of America, it’s got currency,” Pierron said.

Steady as the tide, the BMWs, Cadillacs and Lincoln Towncars are shipped to Saudi Arabia and Africa; Mercedeses, Jaguars and Harley-Davidson motorcycles to Poland, Hungary and Russia; Porsches and Lexuses to Japan, China and Australia, and Ford Explorers and Nissan Pathfinders to Belize, Colombia and Argentina.

“It’s easy money,” said Dennis Frias, a California Highway Patrol auto-theft investigator and task force member. “These cars resell in many countries for up to four times their value. There’s a risk, of course. But lots of people are prepared to take it.

“Because if you know what you’re doing, exporting a stolen car is a lot safer than driving it around. This way it’s off the streets. Gone. Disappeared. Poof. “

With a dazzling array of luxury cars, the Southland has become a veritable Disneyland for car thieves looking for a quick export.

“Go to any parking lot and see the possibilities–pricey sports cars and Land Cruisers free of the rust and abuse of the East Coast,” Ports said. “We love our cars, pamper them like our children. L.A. is simply a supermarket for expensive cars. It’s a recipe for theft.”

Taken from dealerships, shopping centers and residential streets, the vehicles often are driven or hauled to warehouses and outfitted with new vehicle ID numbers, phony ownership documents and new license plates.

Each month, private parties register 5,000 to 7,000 cars–legitimate and stolen–for export with the Outbound Enforcement office. Some are packaged into containers, or driven onto mammoth “roll-on, roll-off” vessels called “rolos.”

More perplexing, investigators say, is the hide-and-seek task of uncovering vehicles and goods spirited away inside the freight containers. Even with sophisticated X-ray equipment, intelligence leads and random searches, there’s no way to check them all.

For harried investigators, the job is akin to a sidewalk shell game: The containers are always moving. And the odds of finding the pearl are almost nil.

“I mean, which container do you open?” asked 32-year-old U.S. Customs inspector Irma Webb. “How do you know? They all look exactly the same. Identical.”

But investigators have their victories. Like the motor oil caper:

In May, the team received a tip that a freight container on a Mideast-bound ship was chock-full of stolen furniture. On the day the ship was to depart, they “popped the can,” opening the suspect container for a surprise search.

At first, all they found were cans of motor oil and condensed soup, stacked floor to ceiling. Eight hours later, after removing thousands of cans, one by one, they hit pay dirt: A false compartment containing–not couches–but two stolen luxury cars.

“With so many containers to search, the thieves are banking on us to be complacent and lazy,” Frias said. “And that’s not always the case.”

The task force was started in 1992 after insurance crime investigator Ports noticed that many of his leads on stolen cars took him to the L.A. Harbor. He approached U.S. Customs inspector Parham and proposed an organized task force to tackle the problem.

Parham’s supervisors gave the team time to compile the cases needed to legitimize a special task force. “Six months later,” Parham recalled, “we had them convinced.”

Literally their first case showed investigators the sophistication of the competition: Four Olympic skiers–three Swedes and an Englishman–ran an elaborate scheme in which they bought 15 cars from local dealers on credit, making the first payment then illegally shipping the cars to Europe.

The beauty of the plan, investigators say, was that the thieves insured the cars before reporting them stolen–collecting the full value of the vehicles from insurance as well as a hefty profit from the illegal resale.

The men were caught after Swedish authorities noticed that the manifests of car containers arriving there did not match the vehicles inside. They contacted the task force in Los Angeles. The thieves pleaded guilty to mail fraud and were ordered to pay restitution to the insurance companies.

In another typical scheme, thieves can sometimes purchase two dozen automobiles from dealers over one weekend, using bogus financing and stolen credit card numbers.

By the time the financing falls apart weeks later, the cars are abroad. “These guys are brazen,” Ports said. “They buy the cars over the weekend when the credit bureaus aren’t up to full speed and the dealers are vulnerable.

“You steal a $100,000 car right off some guy’s lot with bogus financing, and he’s patting you on the back, telling you to have a great time in your new car, offering to take a picture of the proud new owner. Meanwhile, the thieves are laughing all the way to their foreign banks.”

In time, task force members have learned to work as a unit: Ports, the former Anaheim auto theft detective, and Frias–a CHP car theft expert–have lent their expertise to Customs inspectors, who in return have shown them the ropes of import-export laws.

The team has access to a National Insurance Crime Bureau computer, which Ports boasts contains the ID numbers of 300 million vehicles bought in the United States since the Model-T.

Still, there’s always legwork to be done. Like beat cops, team members fan out into the busy harbor, dodging the transport trucks and long-necked cranes, developing sources among shippers and yard bosses. Acting on tips, they search warehouses, freight forwarders and shipping lines.

They play hunches. Eyeing manifests, they may knock on a container, listening for a hollow sound that could signal the dead space of a hidden compartment. Assisted by other agencies, they have conducted armed raids to serve search warrants at shipping companies they suspect have a hand in car rings.

When the team returns a car, the victim is usually speechless.

On Mother’s Day, Larry Reed, a 38-year-old commercial pilot, lost his Toyota truck to thieves in Tierra Santa, a San Diego suburb. Three weeks later, it turned up with four other stolen vehicles on a ship bound for Laos.

“I never thought I would get it back,” Reed said. “I bet it would be stripped for parts or something. Maybe in Mexico. But I never dreamed my truck could have ended up halfway around the world. That boggles my mind.”

Task force members say they could increase their hauls with stiffer penalties and stronger treaties with foreign governments.

Present prison terms for insurance fraud are two to five years and one to five years for felony auto theft. But too often, investigators say, judges allow those convicted–like the Olympic skiers–to plead to lesser charges.

“Judges see them as nonviolent criminals and let them off easier because the jails are already full,” Ports said. “That just really kills us.”

Meantime, investigators try to deal with being outmanned and out-financed by the thieves. “I know I can’t arrest them all, but I get satisfaction out of taking their stolen booty away from them,” Ports said. “It frustrates them. I get a kick out of that.”

At Berth 199, Parham gazed over the sea of cars ready for loading onto the ship to Japan. The mammoth vessel blew its whistle, signaling longshoremen to begin work after a lunch break.

His heavy sigh spoke a fact of life at the busy harbor:

“By next week, all these cars will be gone and there will be a whole new batch here to take their place,” he said, biting his lip. “It’s a never-ending battle.”