Dan-when you use the title company in Georgia,you car is LEGALLY registered in that state.If your car is legally registered in another state,WTF is the state of Kalifornia to tell you that the registration is bogus?

If the Kalifornia DMV Gestapo had a way for people to register the cars legally from the beginning,this whole thing would be moot.

But they didn't-which caused the problem
Then people found a way to LEGALLY register them in an other state.Then LEGALLY transfer them to Kalifornia.

Then the state arrested the same people for LEGALLY getting around a problem entirely created by the state in the first place.


Any more questions?:D

Bill,

Lot's and lot's more questions... I probably know less about this than anybody here, (and apparently less about women too, if you ask my girlfriend :().

Anyway, my comments were based on what I've read about Titles Unlimited in Alabama, not Georgia. The fraud apparently starts with a bogus bill of sale and then builds from there.

I just assumed that the situations were similiar in this thread, if I'm wrong sorry... what was different here? How were the cars legally registered in Georgia?

But I do agree that the stuff California makes you guys go through seems to be pretty ridiculus. But California regulators seem to put their nose in every aspect of our lives, ex: CARB says 'jump' and the Feds say "how high?"

- Dan

Part of the problem is people using services like Titles Unlimited to under report value when registering it in CA thereby cheating the state out of tax dollars. This is a big no-no.

Good on ya Mikee. Just curious for us late-bloomers. Did they impound the car when they arrested you? Was it one of those "..on your knees, hands behind your head..." then cuff deals? That must have been traumatic. Did they give ample warning or was it one of those ambush type arrests? It's OK if you don't want to rehash it. I can understand the emotional trauma it must have been. I got turned down for a registration plate change and told to call the police because of a titles unlimited problem. I turned pale at the counter. I've since fixed it with the new "custom registration" procedure here in NY.

The guy who was running Titles Unlimited did go to jail, or at least rumor has it, they slammed him hard. There have been warnings to members here for a couple of years concerning improper titling and the serious consequences. Those of you considering some 'loop hole' take heed, it aint worth it.

Here is the article:

http://www.sachitechcops.org/news050804.htm

and here:

http://www.ocregister.com/ocr/sectio...cle_281652.php

I know some that were involved as I lived in the Bay Area at the time and the cops just showed up at their door. Their titles were cancelled and originally they could neither sell nor re-title the cars. There are threads about this and if you search Randy Rosenberg's articles you will find out about this topic. Randy was instrumental in the resolution of this issue.

True, but the real issue why people used an out-of-state titling company was to avoid smog requirements.

Before SB100, there were only two ways to smog a kit car:

1. Smog by year of manufacture (ie: kit assembly completion)
2. Smog by year of block.

With the stoked 351 and 302 motors being the most popular, neither of these motors meet smog requirement for year of block (and most definitely not for year of manufacture). Same goes for those with 460 blocks. This left only 289's and 427/428's to use, and if you use one of these vintage blocks, then you can meet the smog requirements for year of block.

Since any vehicle in CA with model year 1975 and older is exempt from smog requirements, if one built a kit car with a non-smogable motor, then the common solution was to use an out-of-state title service to acquire a "1965" (or "1932") model year title. This is what TU provided for $200 - you sell your vehicle to TU (via a notarized Bill of Sale, where you state that you are selling to TU a "1965 Ford" and the dollar amount for which you are selling your vehicle to TU), and in turn, TU sells it right back to you for the same dollar amount. Being in Alabama, TU provides you with a "Bill of Sale" and an Alabama registration - when used together, these documents are legally acceptable by the CA DMV in order to "re-title" and register in CA. The CA DMV would change 8.x% as a "use tax" since you "purchased" an out-of-state vehicle; this total amount is based up on the dollar amount on the bill of sale from TU. This is where people were able to avoid paying high tax by putting a low dollar amount on the notarized bill of sale (selling the vehicle to TU).

That's how it worked. The "tax fraud" was actually a side "benefit" from the real goal, which was to acquire smog exemption by titling the new kit car with a model year of 1965, and therefore being smog exempt because all cars with model year 1975 and older are smog exempt.

In 2001, along come SB100 and now 500 lucky recipients can choose from three ways to smog their kit car:

1. Smog by year of manufacture (ie: kit assembly completion)
2. Smog by year of block.
3. Smog by year that the vehicle replicates.

Choice #3 above is what SB100 gives us, so that we can have our 1965 Cobra Replicas meet the smog requirements of a "real" 1965 Cobra, which in turn are minimal, so all is good for these 500 lucky recipients.

Another year later, we got SB1578 which removed the word "initial" from the titling process as described in SB100, in order to allow those with "incorrect" or out-of-state titles to be re-titled a SPCN and acquire a certificate of sequence to take advantage of #3 above.

Now, where the AG got involved was not only from a "tax fraud" point of view, but from a "perjury" point of view as well. Remember, when one fills out DMV forms to title a vehicle, one is doing so under "penalty of perjury". Well, with a "newly purchased 1965 Ford from TU", one would fill out the DMV forms to title a "1965 Ford" - this matches the bill of sale and registration from TU...right? However, this is fraudulent, since in reality, one has a recently built kit car, not a "1965 Ford". Even if your "1965 Ford" is legally titled from another state where they legally title kit cars this way, the CA DMV requires that your kit car be titled as a Specially Constructed Vehicle (which is what it is). And so, titling your kit car replica of Cobra as a "1965 Ford" is consider fraud and perjury, and potentially tax fraud can be found and persecuted as well. And committing fraud to avoid taxes and to avoid smog are both defined as felonies in CA.

Moving along, from the AG's investigation, the DMV began suspending titles for potentially illegally titled kit cars. The DMV forced the owners of these vehicles to prove the vehicle is a kit car, to make it smog compliant and to pay any/all back taxes and penalties. These actions cleared up the issues with the DMV, however the open issues (and evidence) of felony fraud and tax evasion where passed from the AG's office to the county DA's office, so that the DA can decide whether to criminally prosecute or not. The AG was not going to do this from Sacramento.

Moving forward, the CA Gov is looking at a bill (I don't recall the number) to give owners of fraudulently titled vehicles amnesty from criminal prosecution if they take the initiative to correct their vehicle's title. This can be seen as a relief for some, however if the volume projections hold true, there are clearly not enough SB100/1578 numbers to meet these needs. So, for these owners to correct their titles they will either take a chance to get a sequence number or make their vehicle smog compliant by year of build or year of block - for those with unsmoggable block, they may have to swap in a smoggable block.

Whew... That's enough for one post.

Last, I'm not debating whether all of this CA DMV stuff is right or wrong, or whether the CA DMV must accept kit car titles from other states, etc... I have no desire to argue these opinions. What I have written above is fact, not opinion. You don't have to like it, but it is what it is.

Regards,
Randy R...

I am from California, and it seems that the state should recover from the owners too for the taxes not paid. I recently sold one of my sailboats in Calif., and the buyer wanted me to falsify the price. Oh no was my answer. Life is full of troubles why add more to it?

Great clarification Randy.

Good summary, Randy, though we respectfully disagree on what the problem was.

My own personal take on this is that there was no excuse, and the OBVIOUS "side benefit" of lower fees/taxes is dismissed rather quickly by many who got caught.

I had an SPCN that I had to comply with smog rules about...many others did. If your engine couldn't be smogged...tough. Get one that will. I dealt with smogging a 69 Cleveland...damn difficult, but I paid to have the right equipment and kept it tuned within the guidelines for the motor. It wasn't impossible, and the degree of difficulty certainly did not create a defense to fraud.

Really no excuse for those that used TU...they KNOWINGLY failed to follow the law (those that claim ignorance in this situation have little credibility...they knew what they were doing when they had a new car registered as a "65" and paid little tax money). The only folks who got caught up in this and were for the most part innocent of criminal intent were subsequent purchasers of fraudulently registered vehicles.

I was against the use of SB100 numbers to provide a fix for fraud via SB1578and still am. And I agree with imagine2frolic...all back taxes, fees, fines, etc. ought to be paid before a valid registration is given.

This unadulturated bullsh!t caused the folks in Sacto to start giving our hobby infinite crap.

California, like any other state, has its laws. Registrations in other states have little to do with each state's right to set its own procedures and collect its own taxes...same out of state BS was used in the 70s and 80s for grey market cars that could not be registered here, so it certainly was not a new fraud...simply used for another purpose, in this case...kit cars.

I remember those that took that route laughing and bragging about it to those of us who simply followed the law. And then came crying when they got caught up in it and proclaimed how innocent they were. Bullsh!t.

If you don't like the law...either change it (which a cobra-owning legislator finally did) or simply...GTFO of California.

JMHFO as a law abiding taxpayer of California. And as to those who live elsewhere...STFU. If it wasn't for California, you'd all be living in the stone age.

finis

Well...that was subtle. :LOL:

Ah, California. The land of fruits and nuts. I hear they grow some vegetation there as well.:rolleyes:

jcoop, i was arrested at the border by homeland security coming back from mexico while visiting my dad at xmas. i spent 2 nites in imperal county jail. i was held on $25,000 cash only no bond. i had the warrent for 2 years out of fremont who made no attempt to contact me and i live in fremont.
this car was registered befor sb100 went into effect. dmv does have a list of all cars registered through titles unlimited. they estimate that there are at least 70,000 illegally registered cars in calif. there are also more 32 ford coupes registered in calif than were ever made.......mike

Some of you may recall I once owned an Excalibur, sold it, then bought it back (and had to apy $3K more than I sold it for)!

I bought it back for ONE simple reason, there was no way to legally register a replica Cobra in Hawaii at the time. But Excaliburs are NOT 'replicas', there Federally recognized 'real' cars, like a Ford or Chevy.

THEN the local Cobra guys got a law passed to allow us ALL to 'get legal', sold the Excal and bought an ERA! :D

I won't even begin with your politicians...at least we know when ours are gay. :JEKYLHYDE

Jamo-let me count the ways you are WRONG.

1-I went the TU route strictly because of SMOG.
2-If the originals came with a 427 SO,then there is no reason replicas can't.(and BULL$HIT AQMD rules are not a reason.)
3-So each state has laws-BFD.The car(s) were LEGALLY registered in another state.
4-there have been more people LEAVING California than people moving there each year since 1991.Proof positive that the peoples Republik of Kalifornia SUCKS.
5-Oh,just pay your taxes?No,It's interesting how people seem to have forgotten one of the major reasons this country was started:Taxes.Remember the Boston Tea party?
6-Stonage?Really...........you must think Feinstein,Pelosi,Boxer,Davis,Moonbeam were all ASSets to the country.Not to mention draconian SMOG rules that make no sense.You belong in that state.Bend over and spread 'em and stock up on the K-Y.

I have no idea WTF you mean by that but I can walk into the Dept. of Motor Vehicles and walk out with my car titled as a 1965 that requires NO smog check and it is done 100% legally. No chance they'll come up with some kind of B.S. and try to arrest me later. :rolleyes: It's not my fault you live in the most screwed up state in the union (I have several relatives that live there and they agree). He11, anything south of Redding is just considered Mexico anyway because of the illegals.

JWD just wait it won't be long before Olympia and the WA DMV realize they are missing a "big dollar" tax income. They will figure out some way to get every single replica, kit, or street rod "legally" registered by year built and the owners will have to pay big bucks to become "legal" and pay fines or taxes in arrears. The Dems in power here have much in common with CA.

Have you bought your Prius or Smart car yet?:JEKYLHYDE :LOL:

I paid sales tax on the price of the kit so I'm sure everyone is happy. As far as income tax goes, if they decide that Wa. state is going to get one (highly unlikely) I'll just retire to Hawaii where all retirement income is exempt.:3DSMILE: One must do research before ones gets screwed.

If you're so glad you're gone, why do you keep talking about California? Seems like you keep trying to substantiate your decision. Oh well...enjoy yourself until you decide everyone else is wrong in Arizona and you move on to...what...New Mexico?