Amid catalytic converter theft wave, some are willing to exploit legal loopholes on converter sales

Some are willing exploit legal loopholes on catalytic converter sales in Arizona

As Arizona deals with a wave of catalytic converter thefts, FOX 10 Investigative Reporter Justic Lum goes undercover at some recycling yards in the Phoenix area to see if they will buy a catalytic converter, in violation of state law.

PHOENIX - It is a two-minute crime that can cost some car owners thousands of dollars, and we have shown you the frustration it has caused to innocent people.

In previous reports, we have talked about the spike in catalytic converter thefts, how law enforcement across the Phoenix area are trying to combat the problem, as well as proposed legislation to crack down on the issue.

Theft wave affects business owners as well

For nearly 30 years, Matt Allen, who owns Virginia Auto Service, has seen his share of crime trends, but this one may be the most brazen.

"Now, people are carrying the jacks around and jacking the car up to crawl underneath it," said Allen.

Some thieves would jack up cars and saw off catalytic converters from the car's underbellies. One suspect was caught on camera driving away in a car with camouflage paint near 7th Street and Thomas in Phoenix.

"This is the first time that we've ever had an incident like this in 28 years," said Allen. "We've had minor things: a car broken into, or a long time ago, maybe someone jumped the fence and stole a stereo, but this is the first time something as brazen, as just wide open like that. This guy just didn't seem to have any fear."

"I’ve been in this business since 2011, and I don’t have this problem before until 2020, 2021 and 2022," said Joel Mendoza, who owns a car dealership.

Mendoza said he had to move from one location to another, because thieves kept stealing catalytic converters.

"Honestly, like, 50 times," said Mendoza.

50 times, that is, in 2021 alone.

Mendoza said he filed about a dozen police reports, and spotted a trend with the cars being targeted.

"Toyota Prius, Kia Sportage, Kia Sorento, small Kias, Hondas, the Honda Civic, Accords, all those kinds of vehicles," said Mendoza.

A handful of his cars are still missing catalytic converters, and Mendoza's business is on pause

Police: Many catalytic converter thieves have drug addiction

Thieves target catalytic converters because the honeycomb grid inside them contain small amounts of precious metals, like platinum, rhodium, and palladium. Police say in many cases of stolen cat converters, thieves are sustaining a drug addiction.

"I would absolutely say that the majority -- the gross majority of these suspects are fighting some drug habit," said Lt. Wayne Dillon with the Phoenix Police Department.

Investigators describe a food chain of crime, with the converters changing hands through a black market.

"I believe this is organized crime, and it needs to be investigated," said Allen.

Some appear less than compliant with state law

Under Arizona law, no business can buy or sell a used catalytic converter, unless the sale happens in the ordinary course of business by a commercial motor vehicle parts or repair business, in connection with the sale or installation of the converter.

Violating this code is a class one misdemeanor, but it also does not apply to scrap metal dealers purchasing the converter from an industrial account, or once it is authorized for release by a peace officer in the jurisdiction of transaction.

We went undercover to test the system by bringing a used catalytic converter that was on loaner to a few Phoenix area scrap metal recyclers. We have opted to not identify the businesses we went undercover at.

At one of the businesses, an employer refused to buy the catalytic converter, but offered a tip.

"I can send you to the right spot," the employee said. (We will get to the 'right spot' this employee was talking about later on)

One recycler, however, played by the rules.

"We don’t take catalytic converters here," an employee at the recycler said. "I don't know where else they would take them. It's illegal to buy them publicly."

A man doing business at the yard, however, said the converter could be sold online. He also offered another alternative.

"If you got a friend that's a mechanic, give it to the mechanic and say 'hey! Will you buy this off me for a hundred bucks? 'cause you can go sell it to a metal place for $200," said the man, who is not connected with the recycler.

As for the tip offered by the employee at the first business, he sent us to a recycling yard that we visited 30 minutes prior. The owner of that recycling yard was not able to give us an estimate on the converter, but suggested he take it to a friend.

"I would literally have to take it and find out what it's worth," the owner said.

The owner said it is illegal for him to 'purchase' it from us, but while he appears to be in compliance in turning down the request, he also offered to help.

"You have to know somebody," the owner said, claiming he knows a dealer. "I can take it directly to him because I know him. He's not gonna send me to jail."

From one perspective, that owner appears to be a 'middle man' who can take the converter from our hands to 'his guy.' He assured us he will let us know how much the converter is worth, and if I want it sold, it will only cost us $25 for his connection.

"That’s the only way you can do it, unless you wanna risk yourself going," said the owner.

In the end, we back out, but this was just one interaction: a sample of how quickly an untraceable catalytic converter can move along for profit, with evident loopholes.

We have also posted an ad for the converter on Facebook marketplace, and received ten messages within hours. Many of the messages asked for the reference number every converter has carved on, which can be searched for the monetary value.

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