For sophisticated thieves, Wilmington’s jumble of auto wrecking yards is a virtual shopping mall where they can buy an identification number for a stolen car for the price of a pile a scrap metal. : Junkyards: A Car Thief’s Supermarket

Filemon Alvarez had been driving a rough-idling, 1972 Chevy pickup with a leaky transmission and 150,000 miles on it. So in January, when he found a deal for a 1985 Toyota truck, gleaming red with carpeting and a camper shell, at $3,000 below the market price, he jumped at it.

He paid $6,100 in cash and registered his new purchase with the Department of Motor Vehicles. Three weeks later, law-enforcement investigators gave him the bad news--the deal was too good to be true.

“They said, ‘You bought a stolen truck,’ ” Alvarez, a part-time gardener, recalled. “I was kind of shocked when they told me. They came with a tow truck and picked it up. There was nothing I could do.”

Nearly a year later, Alvarez is still driving his old blue truck--when it’s not in the shop--and hoping he can recover his money. And investigators are still tracking a car-theft ring that has mined what detectives describe as a small fortune in the junkyards of Wilmington.

Thriving Market

The roughly 200 junkyards in or near Wilmington are believed to be a thriving market for stolen-car sales, stolen-part sales and sophisticated theft rings that use junked cars to gain legal title to new stolen cars, said state investigators and Los Angeles police.

“You get 200 junkyards in a small little area like the harbor . . . and it makes it very difficult for law enforcement,” said Lt. Mike Markulis, commander of the Los Angeles Police Department’s Harbor Division. “Cars are stolen, taken to them, broken down and cut up. We see switching of vehicle identification numbers. You can’t believe what’s happening out there.”

The theft scheme that victimized Alvarez is considered typical for Wilmington, according to California Highway Patrol investigator C. W. Garrison, who has been handling the case. “So far, we’ve recovered about 15 vehicles,” he said. “But there could be four times that many. If you figure $8,000 to $10,000 per vehicle, we’re talking maybe half a million dollars” in stolen cars.

Although many junkyard owners, or auto dismantlers, deny that crime is a serious issue at the yards, police say the problem has reached alarming proportions. Law-enforcement efforts have been hampered by a shortage of police manpower to watch over the yards and an ever-increasing consumer demand for cars and car parts statewide, police said.

Car thefts in California have climbed steadily for at least five years, reaching a record 178,597 cases in 1985, CHP officials said. It is a record almost certain to be broken this year, they said.

In Los Angeles County, which accounts for nearly half of the theft total, authorities believe a large but unknown number of the cases involve Wilmington and portions of the San Fernando Valley where junkyard concentrations are heaviest. Of the 84,851 cars reported stolen in the county last year, 74,818 were later recovered, CHP Sgt. Don Henderson said. The remaining 10,033 are the ones investigators wonder about.

“They could be stripped, chopped (into sections for parts) . . . or out of the country,” Henderson said. “We don’t know where they went.”

CHP Sgt. Ed Whitby said police experts believe about half of the car thefts are committed by “someone who steals to commit a crime and then dumps the vehicle, or youths out looking for a joy ride. The other 50% includes the professional thief, the person who uses the car to strip it, or to alter its identity and sell it. Those are the two largest categories of professional thief.”

Based on the evidence, Wilmington’s role in the problem appears to be deep-rooted, police said, involving many hundreds or thousands of car thefts that occur each year throughout the region. Investigators say thieves often take advantage of honest junkyard owners to buy wrecked cars for use in illegal number-switching schemes. In other cases, dishonest junkyard owners have been arrested as part of such schemes or for purchasing stolen cars and parts, police said.

But the real scope of the problem is difficult to gauge because neither the police nor any other regulatory agency has the manpower to regularly inspect the yards or to investigate every possible case, authorities said.

Los Angeles police, for example, recorded well over 200 arrests during an 18-month period when the department had a two-man investigative team in harbor-area junkyards, Harbor Division detective John Woodrum said. About 60 of those arrests involved felonies such as auto theft or receiving stolen goods, he said. An additional 200 involved misdemeanor violations of state and city operating regulations.

“Virtually all of them . . . involved either the (junkyard) owners or their employees,” Woodrum said. “Nine times out of 10 . . . those that didn’t abide by the small rules were involved in more serious kinds of crimes. . . . It’s a real rat’s nest down there.”

Police described the investigative team as a vital tool in controlling the junkyards. “If (the investigators) didn’t make a couple arrests a week down there, they weren’t doing their jobs,” Detective Chuck Hudson said.

But the team was disbanded about a year and a half ago because of soaring caseloads in other types of crime, particularly narcotics sales, Hudson said. Now, he said, Los Angeles police don’t touch the yards unless a theft investigation leads them there. Two other agencies responsible for regulating the industry--the Department of Motor Vehicles and the California Highway Patrol--also report having too few investigators for the size of the job.

“A lot of dismantlers there are legitimate,” veteran Wilmington-area CHP Detective Garrison said. “But any place that has a large concentration of salvage yards is attractive for any thief. I’d say I’m involved in 20 to 30 cases a month . . . (and) probably 25% of those have some connection to the salvage business.”

Typical Case

Garrison said the case in which Alvarez was victimized early this year is typical of those involving junked cars and false vehicle identification numbers. After one suspect pleaded guilty in February to auto theft, investigators began looking for members of a small ring that was found to reach all the way to El Salvador, Garrison said. Two other suspects are facing trial for car theft, and at least one other is still being sought.

According to Garrison, the thieves would steal a truck or sports car, typically a late-model Nissan or Toyota, and buy a wrecked version of the same car, paying a junkyard perhaps $100 for the scrap. They would then remove the federally required vehicle identification number from the door or dashboard of the junked car and place it on the new stolen car.

The switch, an extremely simple and common procedure, enables a thief to register a stolen car as salvage, since DMV computers show that the identification number belongs to a wrecked car, Garrison said. The thief files paper work with the DMV saying he has bought the wreck and restored it to working condition. The thief pays registration fees, subjects the car to a road test and gains legal title to the vehicle.

The stolen cars--particularly late-model Porsches, Chevrolet Camaros, Toyota Celicas, Nissan Z models and other popular sports cars--are easily sold to unsuspecting buyers, Garrison said.

“There’s a constant source of salvage identification numbers” in Wilmington, the investigator said. “Thieves know they can buy a junked car cheap in the salvage yards. All they want . . . is the vehicle identification number and the title. That’s all they’re interested in.”

Taken to El Salvador

In the recent CHP case, there is no evidence the junkyard owner was involved in the scheme or knew about it, Garrison said. Ring members insured the cars and then apparently took many of them to El Salvador, telling California insurance companies the cars had been stolen; thus, the investigator said, the thieves could collect insurance payments here and sell the cars for additional profit to unsuspecting Salvadorans.

“The initial investment (for each car) was just a fraction of the value of the vehicle,” Garrison said. “As interesting as this case is, it’s not all that uncommon.”

Members of the Automobile Dismantlers Assn., a trade group representing the state’s nearly 2,000 licensed junkyards, disagree on just how common such operations might be. Osborne (Tex) Russell, owner of Tex Auto Wrecking, a yard in east Wilmington, denied that theft of any kind is heavily practiced within the industry.

Russell said thieves who want to unload stolen cars, for example, find much more willing buyers at some auto-body shops--so-called “chop shops” where parts can be removed and stolen cars hidden indoors.

Most Won’t Do It

“You don’t find ‘chop shops’ in wrecking yards,” Russell said. “You’ve got a helicopter flying over this area all the time. Every once in a while . . . (police) find some wrecking yard with something stolen in it. But most people ain’t going to put themselves in jeopardy for a dime. No way.”

But Terry Fiskin, former owner of Terry’s Auto Parts, a salvage yard that closed this month after 30 years in Wilmington, said crime in the yards is more common than some industry representatives like to believe. Fiskin, who sold to take advantage of rising land values, said the problem exists despite numerous operating regulations designed to control the industry.

A few years ago, for example, the state began requiring salvage yards to obtain the pink slip of any car they purchased to demonstrate ownership. Yard owners must register the purchase with the DMV and are prohibited from dismantling the car in the first seven days so the validity of the ownership can be verified.

Yet the law is easily skirted, Fiskin said.

“If I wanted to deal with a car that wasn’t kosher, I just wouldn’t put it through my books,” he said. “Most people I know aren’t involved (in stolen parts). But some, if they really wanted a part . . . might turn their back and pay cash for it, and say, ‘I don’t want to know the pedigree for that particular part.’ ”

17 Arrested in Sweep

Hudson said the Los Angeles Police Department’s two-man team often turned up stolen cars in yards where they had been stripped for doors, front ends, fenders and other parts unmarked by identification numbers. One weeklong sweep of the yards in 1983, shortly before the team was assigned to full-time duty, led to 17 arrests, including those of several junkyard owners, and the confiscation of 69 vehicles. Many of those arrested, including several convicted of receiving stolen property, are once again believed to be operating in the salvage yards, Hudson said.

“This doesn’t even begin to touch it,” the detective said of the problem. “It’s on such a large scale it’s unreal.”

Yard owners interviewed expressed concern over the problem and the damage it has done to the image of the dismantling industry. One dismantler, angry over illegal practices, once called police to report seeing a vehicle identification number being removed from a wrecked Datsun 280Z, according to Hudson. The car was about to go into a metal crusher, he said.

Using the tip, police began running the number over and over through DMV computers. Two weeks later, Hudson said, it finally showed up on another Datsun--one that had just been registered as a salvage. The case quickly led to an arrest.

Unlicensed Dismantlers

Some dealers blamed unlicensed dismantlers--there are as many as 40 in or near Wilmington, police estimate--for much of the crime problem. Joe Zacher Jr., a dismantlers association board member and a co-owner of Zachers Automotive Recyclers, said he believes most licensed dismantlers would not jeopardize their businesses by trafficking in stolen cars or parts.

But those who deliberately deal in stolen cars or parts have little reason to register their yards with the DMV to obtain a license, he said. In fact, Zacher said, anyone with nerve and a tow truck can place an ad in the newspaper to go into the salvage business.

“You look like a dismantler when in reality you’re a crook,” he said. “You can get those cars that are stolen and get the parts off them. In the dismantling business, the evidence can disappear very quickly.”

Jerry K. Galbreath, supervising special investigator for the DMV’s Los Angeles area, said unlicensed operators are subject to a $500 fine or six months in jail or both. But there are only 21 DMV investigators assigned to handle all the cases--including consumer complaints against dealers and counterfeit auto pink slips--in the portion of Los Angeles County south of the San Fernando Valley, he said.

Few Inspections

Fiskin said his one-acre Wilmington yard was inspected only six times in 30 years by Highway Patrol or DMV inspectors. Other yards owners said they also were inspected infrequently.

“There is absolutely no way we can regulate every (junkyard) location in Los Angeles,” Galbreath said. “Generally . . . the number of stolen cars we find in licensed yards is very small, although we do find them. We find more in the unlicensed (yards). If you’re dealing with a crook, you’re going to end up with more cars that are stolen.”

But even licensed operators fall under suspicion of criminal activity because of the cases that sometimes surface. Fiskin said auto wreckage auctions, used by insurance companies to get rid of badly damaged cars, are considered common operating grounds for thieves even though most such sales are open only to licensed dismantlers or their associates.

Fiskin said a typical scheme involves thieves who steal a car, remove its engine and other major parts, and then leave it abandoned where police are certain to find it. An insurance adjuster will routinely declare the car shell a total loss so the vehicle owner can be paid.

Remainder Auctioned

The insurance company takes ownership of the wreckage and auctions it at one of several salvage sales held weekly throughout Southern California, Fiskin said. The thieves find out which company is handling the car and attend the sale. They buy the shell, take it home and put the engine and other parts back into it. After registering the car with the DMV as a salvaged vehicle, they hold title to a car whose only blemish is that computers say it was once demolished.

“They’ll steal Mercedeses, BMWs . . . cars that will bring $45,000 on a used-car lot,” Fiskin said. “They have a day’s labor taking it all apart; they probably have a week’s work putting it all back together. And with a week’s work, and maybe $5,000 to buy the salvage, they have a car that’s worth $25,000.

“And the guy who buys it, he doesn’t know. He’s got a flashy new car.”

Insurance companies sell about 2,000 cars per week at wreckage auctions in Southern California, junkyard owners estimate. Howard Potiker, co-owner of Riteway Used Auto Parts in Harbor Gateway, said only a very small percentage of the wrecked cars make their way back onto the streets illegally; most remain in junkyards and are never driven again.

But he often can look at a junked car, see what it sells for and know if it is a stolen car that will be reassembled for profit, Potiker said.

“The Toyota Celicas and Supras and the Mazda RX-7s, they’re stripped the most,” he said. “A lot of dismantlers would like a car that’s declared totaled to stay totaled--no salvages. That would keep a lot of unsafe cars off the road and eliminate a means for theft.”