[EXCLUSIVE] Hundreds cheated in racket involving tampered mileage on Japanese second-hand car imports

Hundreds of consumers have been sold second-hand Japanese cars with tampered mileage gauges, in a racket involving at least two car dealerships, MaltaToday has learnt.

Cars bought from Japanese bidding markets on the cheap because of their high mileage, would then be sold in Malta with the dashboard gauge showing low mileage.

An exercise carried out by MaltaToday on a sample of 18 cars flagged by multiple industry sources, shows discrepancies ranging between 30,000km and 130,000km between the original mileage and the one registered in Malta.

Sources have indicated that at least two car dealers were using the services of a garage in San Gwann to tamper with the odometer and then falsify documentation issued by the Japan Export Vehicle Inspection Centre (JEVIC), to dupe consumers into believing the second-hand car they are being sold is of low mileage.

MaltaToday arrived at the discrepancies by comparing the original mileage recorded by JEVIC in an online database that is accessible to everyone with the mileage appearing in the system that was accessed by our sources.

MaltaToday understands that the authorities are investigating the racket and that at least 300 case files at Transport Malta have been flagged as suspicious, some dating back as far as 2019.

The racket is facilitated by what appears to be complacency of officials at Transport Malta, who do not bother cross-checking physical documentation presented to them by car dealers when they register the imported vehicles with the online records at JEVIC that would indicate the true mileage.

How does the racket work?

A second-hand car dealership in Malta appoints a representative who is tasked with bidding for the cars in auctions that take place in Japan.

The Maltese importer sets a maximum bidding price that is normally linked to the make and mileage of the car. If the bid is successful, JEVIC inspectors carry out a review and issue a certificate of approval. In its pre-export report JEVIC includes the car model, date of inspection, location of inspection, vehicle identification number (chassis number), odometer type and reading, certification number and the inspector’s details.

This information is logged in a database that is easily accessible online using the car’s chassis number.

Industry sources told MaltaToday that the racket starts the moment the cars arrive in Malta.

When they are offloaded at Laboratory Wharf in the Grand Harbour, the police have to fill in the Vehicle 5 (VEH 005) customs and police inspection form.

The manual form contains several fields, including one where the car’s dashboard mileage is listed. However, it appears that dealers often use the excuse that the car battery has been exhausted as a result of the length of time it took the cargo ship to reach Malta so that the dashboard mileage cannot be read.

In these instances, the inspector leaves the mileage field blank so that the dealer can fill it in later when the car is started using a booster. Sources have indicated that although there may be genuine cases of car batteries that fall flat, many times these would have been disconnected by the dealer.

The blank field allows rogue dealers to write down the tampered mileage at a later stage.

Reversing the mileage

Once the car is at the dealers’ yard, it is taken to an auto garage, where the mileage is tampered with and reduced. Sources have indicated at least one such garage situated in San Ġwann where the odometer is tampered with to reflect the dealer’s desired mileage.

In tandem, a forged JEVIC certificate listing the fake mileage is printed at a printing press in the south of Malta.

The new fake mileage is also listed in the empty field of the port inspection form.

Industry sources said that the documentation, including the forged JEVIC certificate is then presented to Transport Malta. In what appears to be incompetence at best and corruption at worst, the TM official receiving the documentation does not bother to verify the documentation with the online JEVIC database and the imported vehicle is given the official stamp with the tampered mileage.

The car is then marketed in the showroom with low mileage and sold to unwitting customers.

‘Something was fishy’

Multiple industry sources who spoke to MaltaToday said the culprits would import a batch of vehicles but only tamper with half of them.

“They are intelligent. Out of 50 imported cars, 30 would be legitimate,” the sources said.

But the practice raised eyebrows after other car dealers noticed a drop in their sales when compared to the large quantity of cars being sold by the two suspect dealers.

“They used to sell between 10 and 15 cars a week, while we were barely selling two,” car dealers who spoke to MaltaToday on condition of anonymity said. “We knew something was fishy.”

They also noticed the dealerships behind the racket were selling cars which were hard to come by during auctions.

“Let’s look at the Mazda Demio for example. Grey and white models are easy to find, but blue or maroon ones are not that common, and everyone wants them. But these two dealerships did not appear to have any of these problems to source such popular colours. They were obviously buying them at a cheaper price, because of the high mileage and so there were fewer competing bidders,” one of the dealers said.

Documents seen by MaltaToday show the repeated tampering of mileage, giving the impression the cars are newer than they are.

A Mazda Demio was registered in Malta with a mileage of 38,887km, but the original JEVIC certificate showed a mileage of 109,785km. A Toyota IQ was registered with a mileage of 36,522km, but its original JEVIC certificate showed a mileage of 136,522 kms – 1,000km more.

A Suzuki Swift was registered with 36,522km, while original documentation showed a mileage of 136,522km.

Skewing the playing field

The racket appears to have stopped just over a month ago when the authorities started investigating. But the practice, which created an unfair playing field, has since driven some dealers out of business.

“At least I have a bigger showroom, and come from a generation of car dealers, but not all of us were so lucky,” one of the sources who spoke to this newspaper said. “I know someone who was driven to depression. He was so broke that he couldn’t afford a car. Imagine that, a car dealer who does not own a car.”

He described the situation honest dealers were facing. “It was crazy seeing people go on test-drives as soon as they enter their showroom. Customers used to come to us and tell us: ‘Listen that dealer is selling cars with lower mileage which are cheaper than yours.’ We would be baffled.”

And to top it all, the crooks would be able to save face with consumers if the tampered vehicles developed some malfunction since the cost of repair would pail into insignificance when compared to the income they would have made.

“Cars, especially with high mileage, do develop problems but if the dealer fixed the faulty vehicle for free, they would still be making a profit, while making the customer happy,” one of the sources said.

READ THE FULL INVESTIGATION IN MALTATODAY