Fake Mileage Settings Face High Court Test

The Supreme Court today agreed to decide whether a federal anti-counterfeiting law may be used to crack down on the sale of used cars with phony mileage readings.

The court said it will hear an appeal by the manager of a Pennsylvania car dealership sentenced under the law to six months in prison.

The manager, Raymond J. Moskal, was convicted last year of taking part in a scheme in which car odometers were turned back and ownership titles listing the lower mileages were obtained in Virginia.

Also convicted were Al Davis, owner of the wholesale car dealership in Manheim, Pa., where Moskal worked, and Dennis Smith, owner of a dealership in Chesapeake, Va.

Davis and Smith did not appeal to the Supreme Court.

All three were convicted under a federal law that makes it a crime to transport falsely made securities across state lines or to make counterfeit state securities.

Prosecutors said the ownership certificates from Davis’ dealership were shipped to contacts in Virginia who applied for titles in that state with the phony lower mileage figures.

The Virginia titles then were sent back to Davis and he distributed them to area dealers to sell with the used cars.

The U.S. 3rd Circuit Court of Appeals upheld the convictions of the three defendants.

The appeals court said a bona fide car title issued by a state qualifies as a falsely made security when the title contains false information.

“Stated mileage is a material part of a title certificate,” the appeals court said. “The fact that valid title is transferred by the certificate does not vitiate the fraud that is foisted on the unsuspecting customer when the falsely made document is introduced into commerce.”

Federal appeals courts elsewhere in the nation have disagreed with the 3rd Circuit Court’s interpretation.

The Justice Department urged the high court to resolve the conflict. The department said the court should intercede to “promote the fair and efficient operation of the federal criminal justice system.”