A major fraud scandal involving approximately one million illegally registered cars has been uncovered in France, costing hundreds of millions of euros in lost taxes and fines, according to a report by the state auditor, the Cour des Comptes. The scheme, which involves fake dealerships manipulating records of the state vehicle licensing agency (SIV), is also endangering public safety by allowing unsafe cars and lorries onto the roads, while proving a boon for criminal activities ranging from petty delinquency to organized crime.

The vulnerabilities in the system, as detailed in the report released on Thursday, have enabled a wide spectrum of criminality to infiltrate the registration process for fraudulent purposes. The roots of the issue trace back to 2017, when the French government allegedly attempted to streamline operations by partially privatizing the system, aiming to accelerate the notoriously slow delivery of registration papers to car buyers. This move reassigned around 2,000 civil servants to other tasks and granted car dealers direct access to the SIV registry to issue documents for clients, but the new framework purportedly relied too heavily on trust and good faith, which was quickly exploited.

According to the auditor, hundreds of unscrupulous operators established ghost dealerships, charging fees to tamper with the registry, with nearly 300 fictitious companies operating free from state control. These entities have registered about a million vehicles, whose documents may appear legitimate to police during checks but render the cars and owners untraceable afterward. The financial impact is substantial, with an estimated €550 million in losses from uncollected registration fees, speeding fines, and parking penalties for the years 2022-2024 alone.

The report lists 30 different types of fraud linked to the scam, including evading environmental taxes on heavily polluting cars, altering road-worthiness test results, and concealing previous ownership details. In a special investigation, Le Monde newspaper highlighted cases where fraudsters, known as SIV-eurs to police, assisted luxury car importers in dodging tens of thousands of euros in import and environmental taxes by registering vehicles like Rolls-Royces and Mercedes as specially adapted for disabled persons. Additionally, stolen vehicles can be re-registered to avoid detection, and drug gangs utilize SIV-manipulated cars for high-speed deliveries on motorways.

Le Figaro newspaper reported that police were alerted by a 160% surge in "very fast" speeding offences between 2016 and 2022, with many linked to fake registrations upon investigation. The Cour des Comptes criticized the state for lax oversight in verifying the credentials of the 30,000 dealers granted access to the SIV, noting that applicants merely needed to set up shell companies to gain entry. An insider quoted by Le Monde remarked, "This is what happens when you try to reduce the size of the state. Before, people queued for hours, but at least everything was properly checked."

In response, France's interior ministry has acknowledged the problem and claimed to be implementing remedial measures. An action plan announced last year has reportedly led to increased fraud detections and a sharp reduction in authorizations to access the SIV, though the scale of the scandal underscores ongoing challenges in regulatory enforcement and public safety.

Source: www.bbc.com