Attorney General Bonta Exposes Bay Area Tax Evasion Scheme Involving Luxury Vehicles Registered Out of State

California owed over $1.8 million in unpaid taxes

OAKLAND - California Attorney General Rob Bonta, together with the California Department of Motor Vehicles (DMV) and the California Department of Tax and Fee Administration (CDTFA), today announced charges against 14 individuals for their alleged roles in a scheme to evade the reporting of over $20 million in luxury vehicles purchases in order to avoid payment of over $1.8 million in taxes to the state of California. The individuals were charged in a 56-count complaint with conspiracy, filing false sales tax returns, failing to file tax returns, perjury, and money laundering.

"When bad actors abuse legal loopholes and submit fraudulent documents to evade their obligations, the California Department of Justice will not stand idly by," said Attorney General Rob Bonta. "Every dollar of unpaid taxes is a dollar taken from California's roads, schools, and the vital services our communities rely on. Schemes that defraud the government of millions in taxpayer money will not be tolerated. Today's announcement should serve as a reminder: If you break the law and engage in fraud and theft, my office will hold you accountable."

"CDTFA is committed to investigating and taking action against people who are avoiding their tax responsibilities, as exemplified by the filing of this case," said California Department of Tax and Fee Administration Director Trista Gonzalez. "California's scenic roads are maintained by the tax dollars these motorists and their accomplices are trying to avoid. Today's filing will hopefully discourage others from participating in this scheme."

"This indictment demonstrates DMV's commitment to investigate and prosecute individuals and entities that are defrauding our state out of critical vehicle registration dollars," said DMV Director Steve Gordon. "Since 2023, the DMV has launched over 80 investigations and recovered $2.3 million and we'll continue this work ensuring that Californians who purchase and operate cars in California comply with state laws."

A 2024 investigation by DMV, CDTFA, and the California Department of Justice (DOJ) revealed a scheme stretching back to 2018, in which the defendants, working individually and in concert with each other, prepared and submitted false CDTFA forms, DMV forms, and bills of lading, indicating that vehicles were purchased for use outside California. However, none of the vehicles were shipped or used outside of California - they were delivered, driven, and stored within the state. The vehicles included a $1.8 million McLaren Elva, $1.5 million Porsche 918 Spyder, and $1.26 million Ferrari F12TDF, among others.

The DOJ task force responsible for this investigation is the Tax Recovery in the Underground Economy Task Force (TRUE). The case is being prosecuted by DOJ's Special Prosecutions Section. TRUE focuses on combating and deterring underground economic crimes in California. TRUE includes attorneys, investigators, and special agents from DOJ's Special Prosecutions Section and Bureau of Investigation, as well as the Franchise Tax Board, Employee Development Department, the CDTFA, DMV, Homeland Security Investigations, and the Internal Revenue Service. Through multi-agency collaboration such as this one with DMV and CDTFA, the TRUE Task Force works to combat financial crimes in the underground economy.

It is important to note that charges are merely allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Here is the a copy of the complaint.