HOUSTON – Authorities are searching for two men indicted for using fictitious car dealerships to issue nearly 600,000 automobile paper tags and selling them on the internet without selling any cars, announced Acting U.S. Attorney Jennifer Lowery.
The charges allege the illegal tags pose a danger to the public and law enforcement because purchasers use them to avoid obtaining registration, safety inspections and liability insurance. They can also allegedly be used to hide their identities from law enforcement.
Houston resident Leidy Areli Hernandez Lopez, 39, is also charged in the scheme. She is in custody and expected to make her initial appearance before U.S. Magistrate Judge Sam Sheldon at 2 p.m.
Octavian Ocasio, 49, New York, and Emmanuel Padilla Reyes aka Christian Hernandez Bonilla, 31, city unknown, are considered fugitives and warrants remain outstanding for their arrests. Anyone with information about their whereabouts is asked to contact the FBI at 713-693-5000.
A federal grand jury in Houston returned the 15-count indictment May 20 charging all of them with conspiracy and various counts of wire fraud.
According to the charges, the scheme involved the use of fictitious car dealerships to issue and sell hundreds of thousands of Texas temporary buyer tags without selling cars. The three also allegedly used email accounts to communicate with each other and to deliver the fraudulent tags to purchasers throughout the United States.
In Texas, used car dealers must have an independent GDN license to buy, sell or exchange used vehicles, according to the charges. To obtain such a license, applicants must access the Texas Department of Motor Vehicles’ (TxDMV) online eLicensing application portal to apply. Once an applicant obtains a GDN license, they can buy, sell or exchange used cars and create temporary buyer tags for the transaction through the TxDMV’s online eTag portal. The portal is web-based and password protected, and only licensed GDN holders can access it, according to the indictment. However, the GDN holder can create other users on their account to allow access to the portal to create and issue buyer tags.
There is no restriction on the vehicle, buyer or vehicle identification number inputted into the portal, according to the indictment.
According to the charges, these three knowingly participated in the scheme to issue and sell more than 580,000 fraudulent tags to buyers across the United States. They allegedly provided false information such as fraudulent identities, drivers’ licenses, lease agreements and business signs in the online application portal to obtain GDN licenses for fictitious car dealerships. The indictment further alleges they advertised the sale of Texas buyer tags on social media platforms like Facebook and Instagram and used email to communicate and deliver fraudulently-obtained tags. They also received and shared proceeds from the fraudulent sale of Texas buyer tags via electronic payment services like Cash App and Zelle, according to the charges.
If convicted each faces up to 20 years in prison and a potential $250,000 maximum fine.
The FBI conducted the investigation with assistance from Travis County Constable Precinct 3, Houston Police Department, Texas Department of Public Safety, Harris County Sheriff’s Office, New York State Police and New York Police Department. Assistant U.S. Attorneys Belinda Beek and Adam Goldman are prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
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