Mastermind behind BMV "backdoor branch" scheme convicted
13 Investigates exposed "backdoor branches" - local dealers doling out legal BMV tags and registrations to anyone with cash, no questions asked.
Now, after three years on the run, a mastermind behind one of those operations is headed to prison, convicted of conspiracy to commit fraud and harboring illegal immigrants.
It's a major development in a crime the BMV said it was powerless to stop.
Caught and convicted of fraud, Omar Duran Lagunes eluded IMPD and immigration investigators for years. Not anymore.
He is now guilty of exploiting Indiana business law to score license plates, car registrations and titles for illegal immigrants.
"He actually had plates and was offering them for sale, offering deals like $15 dollars for titles," said 13 Investigates Reporter Sandra Chapman as she recapped the investigation for BMV Deputy Commissioner Dennis Rosebrough.
"It was terrible. It was fraud. It was terrible," responded Rosebrough, who was well aware of the case.
13 Investigates went undercover in 2010 to expose how Lagunes and others exploited a direct pipeline to BMV auto documents.
Our investigation took us inside the inner workings of local "backdoor branches." One of them was a sheet covered, makeshift operation on West Washington Street, offering just about everything you'd find at a real BMV.
Inside, an Eyewitness News staff member asks, "My friend can buy plates here? Is it an Indiana plate?"
The broker behind the counter, Pedro Parma, confirmed, "Indiana plate, title."
Within a short time, our undercover staffer discovered fast cash and a few easy steps could put bona fide Indiana plates into the hands of those with no legal right to have them.
The broker shows off the scores of license plates he recently purchased.
"Placa esta legal...It's legal right?" questioned our staff member.
"Yeah," assured the broker.
Here's how it worked:
The customer goes online and creates a business - a limited liability company or partnership.
Then, with a click on the IRS website, "the business" gets a federal employment identification number.
All that's needed now is a signed power of attorney. It allows the backdoor broker to walk into the nearest license branch and get plates and everything else for a business vehicle.
No questions asked and no way of knowing who is getting plated.
13 Investigates confronted the broker about the idea of putting plates into illegal hands.
"I don't know who's legal or who's not legal. It's not my business to find out who's legal or who's not legal," the broker responded.
Individuals in Indiana must have a valid social security number to register or title a motor vehicle in the State of Indiana. But business entities are not required to have a social security number.
"The BMV was a victim, quite candidly," said Rosebrough, who says his agency must provide the documents requested under law if the appropriate forms are provided.
A spokesman from the Indiana Secretary of State's office says it can't deny a business from incorporating, either, if someone presents the right documents and pays the required state fees.
The BMV discovered Lagunes signed off on hundreds of registrations and no one knew where they were really going.
"That activity was a violation of Federal law," said Rosebrough, referring back to the misrepresentations federal authorities found in the filing information.
IMPD raided Lagunes' second-floor apartment after witnesses reported customers lining up outside his door for BMV services.
Confidential search warrants obtained by 13 Investigates reveal what was found inside: license plates and documents, signs blatantly advertising in both Spanish and English: "We manufacture plates."
He offered deals, including "All the titles you need $15" or "plates on special, $50 dollars" and worse yet, evidence of something more troubling.
"What they seized was a large number of Federal identification numbers, registration documents," confirmed former BMV Commissioner Andy Miller in 2010.
But Duran himself vanished, with Immigration and Customs Enforcement, Homeland Security and IMPD on his trail.
They found him in Elkhart, running operations again. This time, he sold documents to undercover agents and his backdoor brokers were caught, charged and convicted of conspiracy to commit mail fraud for making false representations to obtain motor vehicle registrations, license plates and titles and all the while concealing and harboring illegal aliens.
Omar Duran Lagunes is awaiting sentencing, which is set for June.
The BMV is now requiring social security numbers for limited partnership business registrations to eliminate potential fraud.
Gary Hartwig, Special Agent in charge of Homeland Security Investigations in Chicago said, "These individuals abused legitimate government services and circumvented the nation's immigration laws" to make a profit.
The U.S. Postal Inspection Service, IMPD, Elkhart Police, Indiana State Police, the BMV and the Secretary of State's office all participated in the joint investigation.