Nearly a million automobiles were stolen in the United States last year. Most Americans, including the owners of the stolen cars, assume that the thieves are either small-time hoodlums or teen-agers out for a joy ride.
But it is not a willy-nilly amateur operation. It is a calculated, professional business increasingly controlled by organized crime.
Profits are so high that extortion and violence are commonplace as the bosses of organized crime compete for their share of the loot. Even murder is a not infrequent offshoot.
The losers, as in any operation run by organized crime, are the American consumers. Though the victims of car thieves get their money back from insurance companies, the resulting rise in insurance premiums costs all car owners -- theft victims and non-victims alike -- billions of dollars a year.
The problem has reached such proportions that Sen. Charles Percy (R-Ill.) and the minority staff of the Senate Permanent Investigations Subcommittee have conducted a 15-month study. Hearings on the auto-theft operation are scheduled to begin Tuesday.
Here are some of the highlights of the auto-theft story. Some will be presented at the subcommittee hearings; some were pieced together by my associate Gary Cohn from sources in both law enforcement and organized crime: a
A significant number of the million cars stolen in the United States end up in "chop shops" -- steal-to-order operations that provide cut-rate auto parts for unscrupulous repair shops and their unquestioning customers.
In a typical situation, an auto repair shop calls a salvage yard for, say, a 1979 Chevrolet Caprice fender. Ordinarily, the salvage yard gets its replacement parts at auctions where insurance companies sell cars that are too badly damaged to be worth repairing. But if the salvage yard doesn't have the requested part in stock, it puts out a call over the nationwide long-line network -- giant pary lines that link salvage yards across the country. An operator who deals in stolen parts responds with a bid for the wanted fender.
Unlike the legitimate parts dealer, the chop-shop operator doesn't have the fender in stock. But he soon will. He simply custom-orders it from a car thief, who goes out and steals a 1979 Chevrolet Caprice. Once the car is stolen, it is dismantled at the chop-shop -- in four hours or less -- and the Caprice fender is on its way to the salvage yard that put in the request.
Speed is not the only advantage the chop-shop dealers have going for them. (A car can be stolen in less than a minute by an experienced thief.) They can also thwart attempts at identifying the stolen parts with remarkably little trouble. Few parts of an automobile bear telltale serial numbers, and even if they did, these can usually be destroyed quickly. The motor part that does carry a serial number is simply dumped in the nearest river.
Any connection with organized crime is hard to show. Even on the rare occasions when a car thief is caught red-handed, prosecutors and judges generally assume that the theft was the work of an individual hoodlum.
But there is no doubt in the minds of big-city law enforcement officials that the chop-shop industry is dominated by organized crime. In New York City, they told us, two of the major crime "famililes" are heavily involved in chop shops. Similar evidence has been compiled by Chicago authorites.
And organized crime does not tolerated private enterprise in the chop-shop racket. "If you want to stay in business, you pay," a law enforcement source told us. Senate subcommittee investigators have unearthed evidence of 14 murders connected with the steal-to-order business.
An international feature of the stolen-car racket involves Mexico and the Philippines, according to law enforcement sources. Each year, some 10,000 stolen cars and trucks are driven across the border to Mexico for resale -- either for cash or, if the seller is willing, for up to five times the cash value in narcotics.
Another variations of the international car-exportation racket is insurance fraud. The philippines has a prohibitive 200 percent excise tax on all imported cars. To get around the tax, some Filipino residents in this country buy new cars and then smuggle the autos into the Philippines without paying the tax. Then they sell the cars for exhorbitant profits.
The total cost for a new Mercedes -- including bribery fees to smuggle the car into the country -- comes to something like $30,000, yet it sells in the Philippines for as much as $130,000. After collecting the huge profits, the operator reports the car as stolen and collects from the American insurance company.
The subcommittee is expected to detail the chop-shop scam in hearings this week, and to expose the international car exportation scandal early next year. The sad part of this growing racket is that it's the law-abiding car owners of America who get stuck with the cost of the racket through skyrocketing insurance premiums.