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US authorities said they arrested 21 individuals in five states for allegedly participating in a national network that stole thousands of catalytic converters from cars and then sold them to processors to extract precious metals from the devices valued at tens of millions of dollars.
Law enforcement officials also executed 32 search warrants and seized millions of dollars in assets including homes, bank accounts, cash and luxury vehicles, the Department of Justice said Wednesday in a news release. The government is seeking forfeiture of more than $545 million in connection with the case.
“This national network of criminals hurt victims across the country,” FBI Director Christopher Wray said in the statement. “They made hundreds of millions of dollars in the process — on the backs of thousands of innocent car owners.”
Metal thieves in search of platinum, rhodium and palladium have been stealing catalytic converters in ever-greater numbers, sending auto-insurance claims soaring across the country, State Farm said earlier this year. The insurer said it paid $62.6 million for 32,265 catalytic converter theft claims nationally — a 1,173% increase from 2019.
A catalytic converter is an emissions-control device that’s in the exhaust system under many gas-powered vehicles.
The defendants in the theft ring were charged in two separate indictments in California and Oklahoma federal courts.
California has higher emissions standards than the rest of US, so catalytic converters on vehicles registered in the state contain higher concentrations of precious metals, the US said in a court filing in Sacramento federal court.
“Last year approximately 1,600 catalytic converters were reportedly stolen in California each month, and California accounts for 37% of all catalytic converter theft claims nationwide,” said US Attorney Phillip Talbert for the Eastern District of California.
The thieves know which vehicle makes and models contain the most precious metals in the catalytic converters, the government said in the court filing.
“The design of the Toyota Prius and other hybrid vehicles employ a very high concentration of palladium,” the US said. “Therefore, they are targeted by thieves for their high value, specifically the 2004-2009 model years.”
The nine people charged in Sacramento were involved in a conspiracy to ship the stolen catalytic converters from California to DG Auto facilities in New Jersey, where the precious metal powders were extracted and sold for profit, the US said.
DG Auto employees created a pricing application for both Apple and Android platforms that provided real-time pricing information for catalytic converter thieves and their customers, according to the indictment.
A call to DG Auto was forwarded to an answering machine, which said the mailbox was full and couldn’t accept any more messages.
The cases are US v. Khanna, 22-cr-0213, US District Court, Eastern District of California (Sacramento) and US v. Khanna, 22-cr-348, US District Court, Northern District of Oklahoma.
(By Joe Schneider)
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