Title Fraud Being Investigated

The Importance of Vehicle Background Checks
When you are purchasing a vehicle, even if they’re handing you a title, you want to make sure that you do some background checking on that vehicle. We’re getting more and more reports of consumers who are buying vehicles from private sellers, you know, Craigslist or Facebook Marketplace or Offer Up, and the seller actually has a title and they’re giving them a title. But what they’re finding is that title is fraudulent. And the person selling the car may have bought it themselves or they may have done this title scam.

Common Title Fraud Methods
What they’re doing is they’re either getting blank titles from some rogue DMV employee, or they’re taking another title from another vehicle, washing off the information, and typing on the information on the vehicle they’re selling you. And the vehicle they’re selling you turns out either has liens on it or it’s stolen or it has another claim against it or it’s an incorrect VIN number.

Recommended Verification Process
What we recommend doing is whether you’re getting a title or not, you should run a very good background check on the vehicle when you purchase it.

Why Official Channels Matter
You don’t want to use one of these online services like Carfax or Bumper or similar services. Those are kind of not complete information. Matter of fact, their terms and conditions will tell you it’s not complete. You want to do it using official channels. It’ll take a little longer. You can’t really do it online. You have to do it with paperwork, but it will protect your investment.

Protecting Your Investment
If you’re spending thousands or tens of thousands on a vehicle, you don’t want to find out later that that money is all gone because a title was fraud. And even if they hand you a paper certificate, you could find out that they may have done a title pawn or some type of title lien that doesn’t show up on that paper or they used a fake title to get your money from you and then leave you hanging with that vehicle.

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Crackdown On Montana LLC Scam Titles

Growing Scrutiny of Montana LLC Tax Avoidance Schemes
The entire Montana LLC title scheme is experiencing renewed intensity. This represents coverage actually from an NBC affiliate in Montana. Therefore, the investigations that various states are conducting are starting to reach Montana where they’re stating out of state vehicle owners using Montana LLC’s to dodge taxes. That’s a pretty significant matter. It’s not just to get a title, it’s dodging taxes. And what the coverage discusses is how other states are actually getting downloaded information from the Montana DMV in order to prosecute people who are using this method to improperly either evade taxes, evade registration fees, sometimes even evading inspection or emissions.

States Target Montana LLC Vehicle Registration Strategy
Let’s examine what they say. First of all, they say that the Montana is a magnet for out of state vehicle owners looking to avoid hefty sales taxes and high registration fees. It also explains how there’s businesses specializing in this arrangement. Therefore, there’s companies that help you do this. So far, there’s been three and a half million vehicles registered in Montana, and the other states are starting to clamp down on this, or they have been for a while.

Multi-State Enforcement Using Advanced Technology
California, Utah, Wyoming are all cracking down, but there’s other states as well, and they’re warning that the state law in that state requires registration and taxes if the vehicle is primarily operated in California. Therefore, even if you have a Montana LLC, if you primarily operate in California, you have to register in the other state. And the states are using algorithms and AI to do this. They’re using comparison of state databases to identify violators.

New Legal Presumptions Against Out-of-State LLC Owners
Additionally, there’s a new law in some states that says if a resident controls a vehicle owned by an out of state LLC. This is Wyoming. The state presumes the owner owes registration unless they can prove an exemption. Therefore, if you have a Montana plate on your vehicle and you’re driving around in your home state and one of their license plate readers catches you or you get pulled over or you’re in an accident or even get a parking ticket, they’re going to presume presumption meaning that they’re going to presume you’re supposed to be paying taxes in your home state. Now, you can argue against it and you can say, “No, here’s the reason why.” Therefore, if you’re a legitimate Wyoming resident and you’re on vacation, that will clear you of that violation.

Montana DMV Cooperation and Information Sharing
Additionally, the Montana DMV is also starting to get involved. Our motor vehicle department, this is an official with the Montana DMV. Our motor vehicle department is in communication with other states. Therefore, they’re starting to share their LLC information with the other states to see if they can help identify these people.

Serious Legal and Financial Consequences
Officials warned that registering vehicles using Montana LLC’s without legitimate ties to Montana can carry serious risks. Steep penalties, back taxes, fine, and even criminal charges if they determine residents have used a sham LLC to evade taxes. Insurance companies can refuse coverage because you have a vehicle registered out of state that you’re not insuring properly. Therefore, if you get in an accident or you hurt somebody, your insurance company might not pay the claim.

Warning About Associated Risks and Legal Alternatives
Therefore, be aware that this so-called loophole has risk associated with it. Just like the old Vermont loophole did and they shut that one down and a lot of people got in trouble with that one too. Therefore, you want to use legal methods to get a title. Just be aware that your state is probably watching license plates being driven around from Montana or Delaware because Delaware does this too. And if they find that you are a legitimate resident of your home state with an out of state license plate, they may crack down on you.

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How To Get A Surety Bond For A Bonded Car Title

Understanding Bonded Titles for Vehicle Recovery
When you are seeking a bonded title for a vehicle as a method to accomplish a title recovery, perhaps you misplaced the title, perhaps it wasn’t registered in your name, perhaps the title’s been damaged, you’re going to need at some point to purchase a surety bond. A surety bond is a certificate from a bonding agency which persuades the DMV to issue you a title when your documentation isn’t 100% complete. And a surety bond is provided to you by a licensed bonding authority and it’s something that you have to attach to your documentation for the DMV.

Where to Obtain Your Surety Bond
Where do you get one? Well, the surety bond is issued by a surety agency and they have to be licensed. In addition, the cost of the bond is going to be the same no matter where you get it. It’s a fixed price by the government. In most cases, for most vehicles that are reasonably priced, you know, $10,000 or less, the bond is going to cost you about a hundred bucks. Maybe 150 if the vehicle is worth a little bit more money. You can actually get bonds instantly online from many companies.

Online Title Bond Process
This company will do an online title bond. You can normally print it instantly from their website. So, you can attach it and file right away. You don’t have to wait for it to be mailed. You don’t have to wait for any kind of processing. As long as the circumstances are pretty straightforward. You can usually get the bond instantly. You put in the state where you’re getting the bond, you put in your vehicle information, it’ll calculate it, give you a quote, and if you want to go for it, just click enter.

Choosing the Right Bonding Company
So, if you’re doing a bonded title for a vehicle and you want to get a surety bond, many insurance companies will sell them, many bonding companies will sell them, but sometimes they’re not as title friendly. Many bonding agencies sell bonds for like construction companies or attorneys or other contractual requirements and they may not be as familiar with the surety bond for a vehicle title process. So, here’s a source. You can go online, click the link probonds.com, put in your state, put in your information, and it’s pretty straightforward, and they know how to do bonds for vehicle title applications.

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Why Is It Hard To Get A Car Title?

DMV Bureaucracy Serves a Purpose
When you encounter challenges at the Department of Motor Vehicles and struggle to process a title or obtain clear answers from their staff, one important factor to understand is that all the inconveniences and administrative barriers they place before you, along with the seemingly endless runaround, exists for legitimate reasons. Much of this complexity stems from their efforts to combat fraudulent activities. Their intention is to ensure the title acquisition process remains sufficiently challenging to prevent individuals from obtaining titles for vehicles they have no legal right to possess. They are safeguarding the interests of previous owners.

Export Vehicle Complications
Regarding export vehicles, numerous clients encounter significant obstacles when attempting to export a vehicle without proper documentation, often thinking to themselves that since they are exporting it, the requirements should be minimal. However, there are compelling reasons for these strict requirements. Many vehicles that have been stolen or carry various types of legal encumbrances, such as liens or designations as junk or parts-only vehicles, are frequently utilized as export assets because individuals believe that if they do not need to obtain a title domestically, they can simply export the vehicle and transport it to another nation.

Customs and Border Protection Inspections
Unlike other categories of commodities, the Customs and Border Protection agency conducts thorough inspections on vehicles during the export process. Typically, customs officials focus their inspection efforts on items entering the country. For instance, when someone ships a truckload or container of bananas into the United States, customs officials will examine the shipment to verify its safety, confirm proper documentation, and ensure everything meets legal standards. One might question why they would concern themselves with items being exported, since those items are departing the country.

Vehicles receive special attention because if a vehicle leaves the country and happens to be stolen or carries a lien or other legal complications, authorities want to halt that transaction immediately. This vigilance proved effective in a recent case.

Real-World Example of Export Fraud Prevention
In Norfolk, Virginia, authorities discovered containers holding 18 stolen vehicles destined for overseas shipment. This represents a common method for individuals to extract value from vehicles they have obtained through improper means, whether stolen, encumbered by liens, or designated as parts-only or junk vehicles, especially when they lack the appropriate paperwork. They attempt to bypass domestic requirements by shipping these vehicles internationally. This explains why customs officials conduct inspections on vehicles being exported.

Legal Requirements for Different Vehicle Categories
If your vehicle is classified as junk or parts-only, regulations typically require the vehicle to be disassembled into major component parts, specifically into 18 different components, before it can be legally shipped. If the vehicle carries a lien, you must obtain explicit permission from the lien holder. Therefore, numerous rules and requirements govern this process.

Proper Export Procedures
If you plan to export a vehicle, ensure you follow the appropriate channels and procedures. Our website, cartitles.com, provides comprehensive instructions for completing export paperwork for vehicles. We also offer consultation services with a certified title examiner who can guide you through this complex process.

Understanding DMV Protection Measures
This explains why you sometimes encounter difficulties with DMV procedures that may seem unfair or excessive. However, these measures exist to protect either the previous owner from unauthorized vehicle transfers or to prevent vehicles from being improperly transported to other countries.

Bill of Sale Limitations
Remember that while having a bill of sale is beneficial, this document alone does not establish anything definitive about ownership rights. A bill of sale merely demonstrates that you provided someone with money and they were willing to provide you with a receipt for that payment. It does not prove they were the rightful owner. It does not prove they possessed the legal authority to sell the vehicle. It simply serves as a receipt showing you gave someone money.

Final Recommendations
Therefore, you want to ensure you follow the correct process to obtain proper ownership documents, enabling you to legally title and register that vehicle.

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Montana LLC Car Title Loophole Explained

Introduction to the Montana LLC Strategy
All right. So, today we’re going to talk about the infamous Montana LLC loophole that lots of people are talking about. This has been going on for almost a decade now where there are people that have title problems with their car or even without a title problem. And they’re going to title it and register in the state of Montana under an LLC to avoid a couple things. They’re going to avoid having the title paperwork done in their state. They’re also going to avoid sales tax and they’re going to avoid things like inspections. So, we’re going to take a look at the process, how it works, what the pros and cons are, and is it something that could get you into trouble.

Understanding the Legal Strategy Behind Montana LLC Formation
So, according to Google AI, the Montana LLC loophole is a legal strategy where individuals, often those in states with high sales taxes, form a Montana-based LLC or corporation to purchase vehicles. This allows them to avoid sales taxes and potentially other fees. So in the first paragraph, it says that the primary reason for doing this is to avoid taxes because if you are registering in Montana, the same process you would have to go through in Montana, you could do in your state. Montana doesn’t make anything easier or cheaper as far as a bill of sale versus a title. You have to have the same paperwork. The only advantage is sales tax and inspection.

Why LLC Formation is Required for Non-Residents
The other question that comes up is why do you have to form an LLC? Why can’t you just put it in your name? Well, the reason why is because the states, all 50 states are not allowed to give titles to people who are not residents. They can only title vehicles to people who have a residency there. So, if you don’t have a residence there, and I don’t just mean your cousin’s address, you have to have something that belongs to you. They can’t give you a title. So, you have to form an LLC, have that expense, you have to wait for the LLC to be issued, then you have to put the title in that LLC name, then you have to get a license plate and registration.

Comparing Montana Process to State-Level Solutions
So, it may seem like a good idea if you think you’re trying to solve paperwork problems. However, if all you’re trying to do is solve a paperwork problem, you could do the exact same process in your state without forming an LLC. You’re going to have to jump through some hoops. The DMV doesn’t give titles when you don’t have the old title. So, if you bought your vehicle and you didn’t get one of these when you bought it, a title from the old seller or a proper title, then you’re going to have to do a bunch of paperwork. Here’s all the paperwork. How we do it, it’s in a folder. Here’s all the paperwork. If you’re going to do the Montana LLC, you still have to do that paperwork. The only advantage is you will not have to pay sales tax because Montana is a state that doesn’t charge tax and they also have very limited or non-existent inspection.

State Tax Requirements and Legal Obligations
So, you might think, hey, I’m going to get away with it. It’s legal, right? Well, it’s legal in Montana. Here’s the problem. Every state has a rule that says if you are a resident of the state and you’re operating the vehicle in that state, you have to pay tax. It doesn’t matter where you bought it, where it’s titled, where it’s registered. Your state has these rules. And here’s a good description of it. This is from our friends at Hagerty. We’ve worked with them quite a bit. They explain this loophole. And Montana plates have gotten popular and notorious. States are cracking down. People with Montana plates are getting in trouble coast to coast.

How State Enforcement Works Against Montana LLC Users
How are you getting in trouble? Well, if you are in a state that has tax, which is every other state except for a few like Oregon and Alaska, if you purchase your vehicle and title it in another state and you’re driving around with Montana plates and you get pulled over, they’re going to look and see who’s driving the vehicle. They’re going to look to see who’s the principal of the LLC. And if they find that you have evaded taxes, they’re going to charge you the back taxes, penalties, interest, and they can seize the vehicle. How are they doing that? Well, they’re doing that because once a vehicle is within the borders of another state for 30 days, it legally needs to register and entitle their fees and all. If you live, buy, and keep a vehicle in the state with tax, then sales tax must be paid. End of story.

Automated License Plate Reader Technology for Enforcement
So, it’s legal to do this in Montana. Montana doesn’t care. They’re getting your fees, but your state, it’s not legal. If you use a Montana LLC and drive your car on Montana plates, your state has missed out on tax revenue, and they’re going to come and crack down. How are they going to find you? Well, the way they’re going to find you is they are going to use what’s called ALPR, automated license plate readers. There are little cameras all over the place on street signs, and parking lots, on Ubers, on police cars, and they’re looking at all the plates that go by. And if they see a Montana plate go by the same place two or three times, they’re going to say, “Hey, this vehicle is not just somebody visiting our state from Montana.”

Investigation Process and Red Flag System
Anna on vacation. This must be somebody who used this scam because they know about it. It’s not like it’s a big secret. And they’re going to red flag that vehicle. They’re going to pull you over. They’re going to see it’s an LLC and they’ll turn it in for an investigation. Major crackdowns on owners of Montana plates slapped with major fines back taxes. Attorney author of legal files at sports car market. It’s a mistake to say the risk is getting caught is low. The risk of using the Montana loophole is getting higher.

DMV Conference Calls and Interstate Coordination
How do we know this? It says in the article. First of all, the scheme is well known. The other thing is we attend a conference call with representatives from the DMVs from all 50 states. Every month they have a conference call. We hear what they say. They all know about this. Their revenue departments have a task force that are directing local agencies, dealerships, police departments to look for Montana plates. They can run the Montana plate from their police car. If it comes back to an LLC, they can pull you over, check your ID, ask you questions, and they can turn it in for prosecution.

State Hotlines and Enforcement Examples
In fact, now some states are opening up a hotline that anyone can report out of state plates to the authorities. California, Colorado, Arizona, many other states have it. In fact, in California, there was an owner had a California investigator and two deputies show up their house with a search warrant because they discovered this person had the vehicle. They told him he was violating California law requiring him to register his car in the state and pay tax. Remember, it’s not just a sales tax. It’s a use tax. So, you might say, “Well, I bought it out of state.” Doesn’t matter. If you use it in your state, you have to pay tax. Expect penalties and charges. Many other residents are under investigation for the same thing. There’s a strong interest in combating Montana licensed cars. Enforcement is more common than we realize. People don’t talk about it when they get caught.

Utah Case Study and Legal Clarification
You can do a Google search. Montana LLC. Here’s one from Utah. Utah saves thousands in tax by registering cars in Montana. Is it legal? They interviewed the person who works for the government and Jason Gardner of the Utah DMV says the law is clear. It creates illusion they are domiciled in another state. The law doesn’t. The law specifically says that if a business entity has a vehicle that operates primarily within Utah, the same standard applies. That business is deemed to be domiciled for purpose of registration. So it doesn’t matter where you say, “Oh, my company’s in Montana.” They’re going to say if you’re using it, look, even if FedEx has a vehicle titled in some other state and they use it in your state, they have to pay tax in your state. There’s no get out of jail free card for this.

Legal Reality and Enforcement Consequences
So be aware. It might seem tempting and it might seem like you’re getting away with something, but the law says that if you or your Montana LLC buys a car mostly used and resides in Utah or your state, the tax should be paid and registered there. The law is frequently broken, a lot of money being lost, and it’s something where they’re cracking down. The other side is emissions testing. Montana has no emissions testing. So, states that have strict emissions also sometimes people will do it in Montana because they don’t want to pass smog and the states don’t like that either. It’s not worth the hassle.

Insurance Complications and Coverage Issues
The other part of it is insurance. When you buy insurance for your vehicle, you have to tell your insurance company where the vehicle is domiciled. If you tell your insurance company it’s domiciled in Montana, they’re going to give you a Montana insurance card. Okay. What if you’re driving it in, let’s say, Texas? You’re driving it. You get in an accident. You’re going to file a claim. Your insurance company’s going to ask you why were you in Texas? You can’t tell them you’re on vacation. If you have a Texas license, they’re going to do an investigation. They’re going to deny your claim because they’re going to say, “You lied to us about where the car is.” If you tell them it’s in Texas, they’re going to give you a Texas insurance card. Now, you’re going to have a Texas insurance card on a Montana vehicle. That’s going to get you into trouble with the government because they’re going to see that you’re scamming them.

Historical Context and Increasing Severity
So, this is a very, very serious thing. I know it sounds tempting. You know, years ago, there was the whole Vermont loophole, which that had its own issues and the states cracked down on that. But this is something where it’s more serious because they’re tax evasion going on and emissions evasion. And I can tell you right now, states are cracking down on this. They’re using these ALPRs, these license plate readers that are all over the place. There’s big brother cameras everywhere, and they are catching people left and right. Question is, do you want to do it?

Final Recommendations and Alternatives
If it’s a matter of the paperwork, don’t worry. The paperwork you have to do for Montana is the same you would have to do for your state. You can get a title from your own state. Little bit more paperwork than not having a title, but you can do it. If you’re doing it because you don’t want to pay tax, that’s a whole another issue. You have to decide, is it worth saving, you know, $20,000 car, 7% tax, 14, 1,500 bucks, right? Do you want to do you want to save that money and put it at risk? That’s up to you. But they’re not going to just charge you the back taxes. They’re going to charge you interest, penalties. Sometimes it’s a criminal record because it’s a violation. You have to decide if that’s all worth it.

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