In a recent issue of the Signal, we told you about a 2024 Corvette Stingray that vanished.
A man walked into a Southern California car dealership, made a single lease payment of $2,779.05 to drive off in the $90,000 car, then dodged every repossession attempt, leaving the lender to write off the debt.
So we went looking for it.
And, for a brief moment, we found it – or at least its VIN: The 17-character identifying number appeared in a tiny advertisement on page 14 of a community newspaper, listing the car for a public auction the following week, in a lot in Lancaster, 70 miles north of Los Angeles.
That ad is no outlier. We found hundreds like it in California community newspapers dating back to 2024. They are often the only public trace of a fraud pattern that the people who fight it say is both stubbornly common and steadily worse.
These auctions are the last step in a legal process called a lien sale. Done honestly, lien sales protect auto mechanics and tow companies when customers skip out on the bill. But fraud rings have learned to use the process to launder cars, siphon money from lenders, and walk away with a clean title, all with the stamp of approval of the state Department of Motor Vehicles.
“Out of nowhere, it's like half my caseload now,” says Bentzion Krugliak, an attorney at IDEA Law Group who represents auto lenders including Santander, Toyota Motor Credit, and TD Bank. The cases were rare when he started in 2019, he says; now he gets four or five new ones a week. The work is a race against the clock. “I have to drop everything I'm doing and file a lawsuit before I get a chance to wipe my ass” he says. “Otherwise, my client loses their title.”
An honor system
To understand how lien sales enable fraud, it helps to start with how they're supposed to work. A broken-down car shows up at a body shop. The shop makes the repairs, stores the vehicle, and runs up a bill — but the customer never pays. California, like most states, lets the shop recover its money by selling the car, provided it follows a few steps. First, it has to notify the car's legal owner — usually the bank that financed it. That owner then gets a short window — 10 days, in California — to object and force the matter into court. If no one does, the shop sells the car at public auction. The proceeds cover the bill, and any surplus goes to the DMV, where anyone with a stake in the car has three years to claim it.
But every one of those safeguards rests on a single assumption: that the mechanic is telling the truth. Nobody really checks.
Each of those steps can be gamed, and any of the involved parties — borrower, shop, highest bidder — can be in on the con. The repair bill can be padded with inflated storage charges or work that was never done. The "public" auction can be held somewhere remote, won by a single friendly bidder, or never happen at all. The notice can go out just before the deadline, to a lienholder's general mailbox, where it takes days more to reach anyone who can act. Some lien claimants will even mail an empty envelope by certified mail — then show the DMV the receipt as proof they gave notice. Either way, the car gets cashed out, and the lender is left holding the loss.
"Criminals have figured out that a lot of this is based on an honor system," says Paul Steier, who was the director of investigations at the Iowa DMV and is now Vice President of Law Enforcement Programs at AAMVA, the association of state and provincial motor-vehicle agencies. The laws behind it were written for a past era, he says — when people read the local paper and most lenders were local. Today, a bogus claim could be flagged digitally, but the regulations haven't caught up. "We have technology today" to stop lien-sale fraud, he says. "You've got to get laws changed."
One shop, 18 cars
What makes this so hard to catch is that the honest version and the fraudulent one reach the DMV on identical paperwork. "It's not always fraud," Krugliak says. But he believes there are tells. For example: a late-model luxury car that the mechanic values at $4,000 or less – the cut-rate category known as “a short lien” that skips the DMV approval process. Another tell, he says, is volume: a body shop filing “more than five lien sales a year,” he says, “is either doing a very bad job at their customer base, or they’re up to something.”
By those measures, the shop advertising the Corvette’s lien sale — Advance Auto Electric — deserves a second look. Based in Lancaster, a desert city in the northernmost part of Los Angeles County, it advertised 18 vehicles for lien sale between September 2024 and October 2025, including three Range Rovers, a BMW M8, a Mustang GT, and a diesel Ford F-250. The Valley News Group, which publishes titles including the Calabasas Enterprise and the Valley Vantage — community papers some 50 miles south of Lancaster — published lien sale ads for 132 unique vehicles in 2025, up from 84 in 2024.
At least two finance companies have sued Advance Auto Electric and its owner, Haik Agadzhanyan, personally. Krugliak brought one case, after the shop attempted to auction a leased 2024 Toyota Tundra it valued at "$4,000 or less" — the threshold that skips DMV approval — while billing $6,090 in storage. Toyota's filing valued the truck at $46,480. TD Bank sued over a 2022 Ford Bronco, which was advertised in the Valley News Group papers. The lawsuits and disputed valuations do not establish that Advance Auto Electric or Agadzhanyan engaged in fraud. But they add to a pattern of unusual and contested lien-sale activity involving the shop. When reached by phone, Agadzhanyan declined to comment.
A rare criminal case
In Houston this spring, an auto-crimes task force raided a shop called Pure Performance, where, police say, owner Talal Obeid moved stolen and rented luxury cars out of California using fraudulent mechanic's liens — in one case claiming $60,000 in repairs on a near-new Mercedes. Investigators seized nine cars and more than $900,000 in assets and charged Obeid with a felony.
Cases like that are the exception. More often, Steier says, a lender's complaint gets filed away as a private contract dispute rather than a crime. "This isn't a civil dispute," he says. "This is somebody intentionally defrauding a lender." Part of his job now is making that case to police and prosecutors.
In California, reform has centered on the money. After CalMatters reported that the DMV had collected more than $8 million since 2016 from lien-sale cars that sold for more than what was owed — surplus the agency keeps when owners aren't notified to claim it — legislators introduced a 2026 bill to require that notification. As it stands, the agency that oversees lien sales also profits from them.
Contacted with questions about how it oversees lien sales, a California DMV spokesperson said the department couldn't respond by the deadline and pointed us to its website.
Too late to stop the sale
Krugliak's best defense is speed: the moment a lender calls, he sues and serves the DMV, putting a hold on the title — a "Vehicle License and Title (VLT) stop" — before the sale can close. Done in time, the title can't be washed. But the car has often already been sold to someone who knew nothing; the hold simply means they can't get the title to what they paid for. "We'll get a call from some random Joe," he says: "I just bought this car and I can't take title to it."
The Corvette, meanwhile, is on the road somewhere. After it surfaced in that legal notice, it slipped back into the ordinary used-car market — and this time the paperwork was clean. The title passed through Carvana, the online used-car retailer, which said it bought the Corvette directly from an individual — not from the lien sale — and sold it, for cash, to another. That is the system working as designed. A car that vanished on a single $2,779 payment re-entered the world with a clean title and an owner who did nothing wrong.
"Why go and get a gun and rob a bank?" Steier says. "Why not just take a vehicle, shuffle the paperwork, and make hundreds of thousands of dollars?"
