Odometer fraud: Woman sold car with 100,000km over and above tampered mileage

One of the alleged victims of a mileage tampering case found out to her surprise that the vehicle that she had just purchased had a mileage six times higher than what she paid for, court heard on Thursday. 

This emerged during a sitting in the compilation of evidence against the owners of Alexander Auto Sales and Rokku Auto Dealer before magistrate Rachel Montebello on Thursday. 

Alexander Spiteri, 48, from Mellieha, Roderick Vella, 46, and Alison Vella, 47, both of whom live in Zabbar, are denying tampering with the mileage of over 400 second-hand vehicles that they had imported from Japan, in a scam which is alleged to have netted them millions of euro. 

All three defendants are pleading not guilty to charges of fraud and money laundering.

In June 2022, a MaltaToday investigation revealed that high mileage cars, bought from Japanese bidding markets on the cheap, would then be sold in Malta with the mileage displayed on the dashboard gauge having been drastically reduced.

Testifying in court, a woman who purchased a Mazda CXT from Spiteri in 2021 told the court that she had read the MaltaToday story about tampering with odometers on Japanese imports and had checked her car to see if it was affected.

Her car had 19,000 kilometers on the clock, but when she checked JEVIC online, she discovered that the real number was over six times higher - 119,000 kilometers.

“The next day I went to Alexander to see what was going to happen.” He gave her the option of either replacing the car or refunding her money.

Grech asked the woman how the conversation had gone. “He told me that it had happened when the car was sent from Japan, then he gave me the options. I chose to change the car, but a month later his stock still hadn’t arrived and he gave me a cheque €18,500.”

“So you are not owed or expecting anything else from him?” asked Debono. “No,” replied the woman. “He told me ‘it wasn’t from my side, it was from the other side. They screwed me from the Japan end.’”

Inspector Leeann Bonello from the police Anti Money Laundering squad, who had been roped in to assist on the money laundering aspect of the investigation, testified next. Only the non-cash transactions could be investigated, she said, but those paid by cheque or bank transfer were all linked to the defendants.

Debono asked whether the police investigations had established what had happened between the mileage being entered on the database in Japan and that recorded by Transport Malta, but the inspector said this was not her role. Inspector Bonello dealt with the money laundering aspect of the investigation, she explained. “I didn’t touch the cars. A court expert was engaged,” added the witness.

Alison Vella’s signature was noted on the cheques which were being looked at during the investigation, said the inspector, adding that Western Union had suspended its relationship with the defendants after media reports on the fraud were published.

Defence alleges tampering occurred from supplier’s end

Lawyers for two used car dealers who are accused of tampering with the mileage of cars they imported from Japan have suggested that the Japan-based company that certified the cars' actual mileage had been banned in Kenya after an investigation into collusion with government officials there.

David Caruana, a senior manager at the Transport Malta licencing unit, told the court that he had received a call from Transport Malta’s Paola office in May 2022, suggesting that he check the JEVIC certificates for some imported cars. “The caller didn’t want to identify himself and only said he was attaching the JEVIC forms,” Caruana said on Thursday.

“That same day we stopped imports of Japanese vehicles and started checking all Japan imports that were subject to JEVIC in 2022.” Mileage discrepancies were found in records dating back to 2019 but none in 2018 and before.

The checks were painstaking and time-consuming - every vehicle’s odometer reading would have to be manually and individually compared with the value registered in the JEVIC database.  A total of 476 cases of discrepancies were found, he said. “The mileage in the system was much lower than on the JEVIC website.” He explained that before this issue came to light, the standard checks would be against the vehicle’s police file and VRT records.

This exercise showed that only cars purchased from two dealers had discrepancies, he said, naming the dealers as Alexander Auto Sales and Rokku Auto Dealer. Transport Malta took no further action from that point onwards, he explained, as it became a police matter.

Cross-examined by lawyer Franco Debono, Caruana said that up till 2022, vehicles arriving from outside of the EU would be checked by the police. He confirmed that one of the requisites would be that the police confirm the mileage reading. Transport Malta would check the filled-in paperwork, he said.

“As of January 1 this year, the checks which used to be carried out by the police have now been taken over by Transport Malta,” said the witness.

“The JEVIC checks were introduced after this incident.”

Answering questions put to him by prosecutor Marthese Grech, the witness said that the documents with odometer readings would be submitted after the car was sold, adding that no information would be available to the transport regulator from the date of the vehicle’s arrival in Malta until the date of it being sold.

UK imports would be subject to valuation but not police inspections, he said in reply to another question from the defence.

Gilbert Agius, Deputy Chief Officer at Transport Malta’s Land Transport Directorate also testified, recounting how on May 3, 2022, Caruana had informed him about having received an anonymous tip-off about certain auto dealers tampering with the mileage of the cars they were selling.

“Our clerks started looking at the JEVIC information that had been submitted to Transport Malta during the vehicle’s registration, comparing it with the values on the JEVIC website.” Discrepancies were found, Agius said. “Police, customs, and VRT would say one thing and the website certificate would state a different mileage.”

Agius informed his superior, the Chief Officer, Land Transport Directorate Pierre Montebello, and then informed the Chairman.  The Authority informed the police of the outcome of their internal investigation and the Commissioner of Police promised to investigate the issue.

“We wanted to make sure that if the vehicles are subsequently sold on to third parties, the buyers would not be deceived, so we sent a circular to the owners of all possibly affected vehicles, informing them that the mileage could be wrong.” Transport Malta also annotated the affected cars’ logbooks, keeping the mileage the same but indicating that the figure had been tampered with before registration, he said.

Transport Malta was now in talks with JEVIC to link their databases so as to allow the immediate flagging of discrepancies and the authority’s IT system is currently being modified, he said. 

The tampered documents were 100% identical to the genuine issue, he said, so TM clerks would not have been able to notice.

Grech asked the witness what he could tell the court about JEVIC. “It is a renowned international organisation which provides odometer readings to dealers. It is a serious company, " he said. “They always provided us with correct data.”

There were two levels of checks and then further audits on 5% of registered vehicles on top of that to ensure that the system was working, he said, adding that “no consumer had ever come to us to say they had their mileage tampered with.”

Cross-examined by defence lawyer Franco Debono, Agius said he did not know what happened between the entry of mileage values in Japan and the vehicles’ arrival at the Maltese dealers.

“I can’t say. It is not the remit of Transport Malta. We leave that to the police,” he said, adding that as of January 1 this year, the checks that used to be done by the police have been taken over by Transport Malta.

Magistrate Rachel Montebello, presiding the sitting, asked the witness whether Transport Malta had checked with the police to find out how they used to check the mileage in the past. 

“No. It is not for us to tell the police how to do their job. The police had to take down the details, then customs had to calculate the tax due, and so on..”

Answering further questions from Debono, Agius confirmed that JEVIC is a private company, adding that it had been proposed by the UVIA (Used Vehicles Importers Association) as a professional service provider. He insisted that JEVIC checks were also carried out on other vehicles and had always provided the correct information.

Jason Azzopardi asked whether Transport Malta performed any due diligence on JEVIC. “No,” replied the witness. “But the system was made for Malta.”

“Does Transport Malta know that JEVIC was found guilty of collusion with government officials in a corruption racket in Kenya in 2014?” asked Azzopardi.

“No. We aren’t aware of this,” replied Agius, adding that Transport Malta had been working with JEVIC since 2006.

Azzopardi said he had found this out himself through a simple Google search. JEVIC appears to have indeed been the subject of an investigation in Kenya and is also mentioned as having been banned from the country in 2014.