Feds Just Busted A $545-Million Catalytic Converter Theft Ring Involving An App For Catalytic Converter Sales

Catalytic Converter Topshot

Thanks to high material prices and a car shortage threatening to keep things on the road longer, catalytic converter theft has been a big deal over the past few years. While nabbing individual thieves is a lot of legwork, there is a way to theoretically reduce the street value of stolen catalytic converters overnight – find who’s been buying them from thieves and book them. A coordinated law enforcement effort including Homeland Security and the FBI has indicted 21 people in nine states for a relatively sophisticated scheme of buying stolen converters off the street and selling the precious metals inside. Here’s how it allegedly worked.

While many people have been indicted in this case, the such a scheme wouldn’t have been so lucrative if it weren’t for DG Auto of New Jersey allegedly stepping up to the plate. See, DG Auto is a specialist recycling business, one that exclusively focuses on catalytic converters and has the resources to de-can converters and separate out the platinum, palladium, and rhodium inside. It even has an app for selling loads of catalytic converters or using toll refining, where DG Auto refines catalytic converters but doesn’t become the owners of said catalytic converters. While businesses like this are excellent resources for automotive recycling facilities, they can spell big trouble if everything isn’t above-board.

Pot Catalytique Vue De La Structure
Photo credit: The RedBurn – Own work, CC BY-SA 3.0

Indeed, prosecutors estimate that the value of materials in stolen catalytic converters allegedly processed through DG Auto clocks in at $545 million. Prosecutors claim that one defendant received $45 million in wire transfers for stolen catalytic converters, while another is said to have received $13 million. Given the sheer quantity of money this case involves, it’s not surprising to see charges laid across five states. The defendants who allegedly sold DG Auto stolen catalytic converters are said to have just paid thieves for the emissions control devices, meaning these middlemen allegedly weren’t even stealing the items in the first place.

As to be expected, law enforcement agencies have slapped defendants with a litany of charges like conspiracy to commit money laundering, and have already seized millions of dollars in assets including homes, cash, and ironically, luxury cars. While the Department of Justice doesn’t mention what sort of luxury cars were seized, I wonder if any of them had their catalytic converters missing.

Keramik Katalysator
Photo credit: Global-Kat Recycling – Own work, CC BY-SA 3.0

Catalytic converter theft is a huge pain in the ass if you happen to be on the receiving end of it. Not only do thieves haphazardly slice out the emissions components, often nicking brake lines along the way, replacement is a proper nightmare. If you live in California, you’ll need expensive CARB-certified catalytic converters, while for those in other states, some platforms might not have suitable aftermarket catalytic converters available. Oh, and even if an aftermarket manufacturer makes catalytic converters for your car, don’t count on them being available due to the topsy-turvy supply chain.

Some 28 years ago, Vincent Vega asked, “What’s more chickenshit than fucking with a man’s automobile?” Today, we might have an answer. It’s significantly more chickenshit to play middleman, a fairly cushy position with all the money of the stolen catalytic converter market and much less risk compared to crawling under vehicles with a Sawzall. Still, the bust of what was allegedly a major theft ring could be good news for car owners as thieves will scramble to find new buyers for stolen cats. With many recycling facilities requiring proof of ownership, it should only get harder to find dodgy recyclers.

Lead photo credit: sidewalk flying, licensed under CC BY 2.0.

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29 Responses

  1. The converter on the work truck, F350 w/ whatever V8 Ford used in 2004, was taken several weeks ago. I jumped pretty high the first time I fired it up with quite the roar. The GSE mechanics found it quite funny and the aircraft mechanic for another operator renamed that he was hearing me drive around the ramp all night when I went by to chat with him.

    Ever since, I’m just cruising around the ramp singing the song of my people.

  2. Many years ago, I dated a girl who’s mom was seeing a guy who bought and sold used Catalytic converters. He was always checking the precious metals markets, tracking values. I thought he was getting them from wrecked/totaled cars & salvage yards until the day he showed up with a trailer full of them, parked it in the field behind their house, and then stacked haybales all around and on top of the trailer. He proceeded to bring some sort of machine gun out of his truck into the house (gun was belt-fed and had a bipod under the barrel).

    Between that and the drug use, I noped out of that relationship and moved on with my life.

  3. Yeah, this tracks with what industry people have been saying about cat theft – it’s not the local recyclers that are buying stolen cats, it’s an organized mobile operation coming through town offering cash and then laundering the cats in bulk.

  4. Excellent. Hopefully these people go severely punished. Theft (especially from a private owner) absolutely enrages me. For starters the thief is usually gaining a fraction of the replacement value of the item they are taking. And then there’s the property damage aspect.

    I know several college students who had thousands of dollars worth of stuff stolen (like ~10k). They would have been significantly affected financially had their insurance not covered it. Pretty messed up to possibly affect years of someone’s life for a few hundred bucks profit.

  5. ….and Virginia (linked article)
    Hmm. We’ve had 12 or so cut out of work vans in the last couple years. Being in the HVAC field, we know the area recyclers quite well and are fairly confident that the converters were not recycled around here-partly because of rules put in place during the tweaker copper theft surge around the Great Recession

    1. In Va as well. I work at a public library and we had all our vans and de-catted a few months ago. Luckily the Bookmobile was inside a locked garage. We installed security cameras in the parking lots at no small expense.

    2. That’s still going on – my company idled an aggregate depot in New Jersey back in 2010, but a coworker of mine still goes up there at least once a quarter to trim the weeds, test the scale, and fire up the locomotive and get it to operating temperature, last visit, someone had ripped a shit ton of the copper out of the place

  6. Great topic but I feel like this article is missing a key detail. “… if it weren’t for DG Auto of New Jersey allegedly stepping up to the plate”. How did DG Auto help? I assume they tipped the authorities based on an irregular amount of purchases from a handful of individuals.

    1. I have the impression DG Auto were the fence for this operation. “such a scheme wouldn’t have been so lucrative if it weren’t for DG Auto of New Jersey allegedly stepping up to the plate” They stepped up to the plate and made the scheme lucrative.

      1. You nailed it. I was too optimistic in thinking DG was doing the right thing. See below for some excerpts from the Justice Department’s press release on Justice (dot) gov.

        I also took 20 seconds to check the DG Auto website for the full company name and then looked that up on the NJ Business registration page. Their full corporate name appears to be DG AUTO PARTS LLC 0450461235 Freehold LLC 02/2020. I think that is the date the company was created. For ten cents you can pull their company incorperation documents but that seemed like a waste of time.

        From the Justice Department’s press release
        “In all these incidents, most of the catalytic converters sold to DG Auto were stolen, and DG Auto knew or should have known that when they paid for them”.

        “Defendants Navin Khanna, aka Lovin Khanna, 39; Tinu Khanna, aka Gagan Khanna, 35; Daniel Dolan, 44; Chi Mo, aka David Mo, 37; Wright Louis Mosley, 50; and Ishu Lakra, 24, all of New Jersey, operated DG Auto in multiple locations in New Jersey. They knowingly purchased stolen catalytic converters and, through a “de-canning” process, extracted the precious metal powders from the catalytic core. DG Auto sold the precious metal powders it processed from California and elsewhere to a metal refinery for over $545 million”.

  7. Needed a new right side cat. Took the old one to a local recycler. They required a drivers license/ID, registration and a photo of my mug. For all that rigamarole, it was worth $35. Their buyer said (by phone after looking a a pic of the cat) that it was an aftermarket item of the “wire type” Hey, $35! Money in my pocket. Well, actually a check they promptly mailed me.

  8. Are they going after DG Auto for their part in this as well? From the article it sounds like they were processing significantly more CCs that would correlate with the significant increase in thefts in the last several years. If they are in this industry then they knew about the increase in thefts which was leading to their increased processing and profits… burying your head in the soot doesn’t get you off the hook for profiting from theft.

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