Speaker 1: Hi, it's Westkasova. The Big Take is taking a break
Speaker 1: this week, so here's an episode you might have missed.
Speaker 1: You may remember a couple of years ago there were
Speaker 1: all these news stories in the US about people going
Speaker 1: to start their cars and finding thieves had stolen their
Speaker 1: catalytic converter. And then tons of videos popped up on
Speaker 1: YouTube and the evening news. They showed people brazenly crawling
Speaker 1: under cars in parking lots and sawing off catalytic converters
Speaker 1: in broad daylight.
Speaker 2: These sixteen cars at Drivers Village in Cicero are now
Speaker 2: sitting in park after two sneaky thieves stole each of
Speaker 2: the vehicle's catalytic converters.
Speaker 3: Back in mat Onya, this crew was captured on camera
Speaker 3: by the car's owner. Look at them, jack up the
Speaker 3: car and off they go. The owner said they had
Speaker 3: a catalytic converter in the hand.
Speaker 2: Turns out, unfortunately, even police vehicles are not safe from
Speaker 2: catalytic converter thieves.
Speaker 1: It was happening all over the country, and it kept happening.
Speaker 1: That made Bloomberg BusinessWeek contributor Evan Ratleff wonder was this
Speaker 1: just an uptick in petty crime? Or was there something
Speaker 1: more going on here? So he went to find out
Speaker 1: the short answer, yeah, there was a lot more going
Speaker 1: on here.
Speaker 4: People are bringing U hauls and trucks full of them,
Speaker 4: and you know, they stand there and they price them out,
Speaker 4: they pay them in cash, and then they're gone.
Speaker 1: I'm West Casova today on the big take, Your catalytic
Speaker 1: converter is worth its weight in gold or platinum to
Speaker 1: be per sixt Evan. What is a catalytic converter.
Speaker 4: Well, a catalytic converter is essentially a device, mechanical device.
Speaker 4: Before your exams pipe, there's this little structure. It's like
Speaker 4: a fat pipe connected to skinny pipes. So inside the
Speaker 4: fat pipe there's what they call in the trade a core.
Speaker 3: It's usually like a.
Speaker 4: Ceramic core, or they call it a honeycomb core because
Speaker 4: it sort of looks like a honeycomb from a beehive.
Speaker 4: And inside of that there are catalysts. And what those
Speaker 4: catalysts do is they clean the exhaust coming from your
Speaker 4: engine before it exits the tailpipe. So it takes really
Speaker 4: horrible gases like nitrous oxide and carbon monoxide and converts
Speaker 4: them to relatively harmless gases, including carbon dioxide, which is
Speaker 4: not harmless to the environment but in terms of smog
Speaker 4: and ground pollution. So the catalytic converter serves this important
Speaker 4: function and the actual catalyst the chemical reactions are catalyzed
Speaker 4: by these three metals that are included in a catalytic converter,
Speaker 4: which are roodium, palladium, and platinum. They're part of this
Speaker 4: group called platinum group metals or PGMs. You'll hear all
Speaker 4: the time PGMs in terms of catalytic convert and so
Speaker 4: those metals exist in sort of trace amounts less than
Speaker 4: a quarter ounce in inside a catalytic converter, and that
Speaker 4: is where the value lies for someone trying to steal
Speaker 4: a converter.
Speaker 1: And what's so fascinating about that is, for a lot
Speaker 1: of years, as you say, like trace amounts of these
Speaker 1: metal e who cares they go to the junk yard,
Speaker 1: No one give them a second thought, or maybe scrap
Speaker 1: metal places would take come and see what they could get.
Speaker 1: But that changed during the pandemic.
Speaker 4: Right, the metal prices fluctuate on the open market, and
Speaker 4: they're pretty rare metals, especially palladium and rodium, Platinum a
Speaker 4: little less so, but platium and rodium are hard to mine,
Speaker 4: their kind of byproducts of platinum mines and other minds,
Speaker 4: so in pre pandemic times they just weren't worth all
Speaker 4: that much.
Speaker 3: And then the pandemic struck, a lot of the mines.
Speaker 4: Were closed, particularly in South Africa, which is the predominant
Speaker 4: place where these metals are mined, and there were also
Speaker 4: infrastructure logistics problems, supply chain problems, so the prices shot up.
Speaker 4: Of the metals shut up in an extraordinary way in
Speaker 4: some cases. So as the prices started going up, it
Speaker 4: became more and more valuable to have a catalytic converter,
Speaker 4: so those prices went up correspondingly, because if you have
Speaker 4: a used catalytic converter, you can, through a pretty complicated process,
Speaker 4: extract the metals and sell them back to the market.
Speaker 1: So Evan, you said, when you first started looking into this,
Speaker 1: it was kind of a local crime. But then you
Speaker 1: started looking a little deeper, and that's when you found, No,
Speaker 1: those people on the street are the beginning of this
Speaker 1: really big long global supply chain for the metals inside
Speaker 1: these converters.
Speaker 4: The place where I really discovered that this was a
Speaker 4: much bigger story. I was actually piggybacking on the back
Speaker 4: of an investigation that was started by the police department
Speaker 4: in Tulsa, Oklahoma. And in Tulsa they had the same
Speaker 4: problem they had all over the United States, which is
Speaker 4: there were a lot more catalytic convert beginning in twenty twenty.
Speaker 4: They tried to figure out what to do about it,
Speaker 4: and within the Tulsa PD, there was one particular detective
Speaker 4: who decided that not only should they look at the
Speaker 4: local thefts and what they call cutters, people cutting them
Speaker 4: off the cars, but also where did they all go,
Speaker 4: Like where were they selling them, where was the money
Speaker 4: coming from? And he started investigation where they ended up
Speaker 4: investigating the whole supply chain of these stolen converters. And
Speaker 4: so I sort of decided to tell the story of
Speaker 4: how that developed.
Speaker 1: So your story starts at in Tulsa, Oklahoma, and it's
Speaker 1: with a traffic stop, right like so many other stories
Speaker 1: like this begin.
Speaker 4: Yeah, basically pretty routine traffic stop. Someone called in. It
Speaker 4: was actually an off duty cops saw a pickup truck
Speaker 4: full of catalytic converters called it in. Because after all
Speaker 4: these thefts started happening, it became suspicious to be driving
Speaker 4: around with a bunch of catalytic converters in the back
Speaker 4: of the truck. It turned out there were one hundred
Speaker 4: and twenty something in there. They pulled the truck over.
Speaker 4: At the wheel was a guy named Tyler Curtis. And
Speaker 4: Tyler Curtis's I think at the time he was maybe
Speaker 4: twenty four twenty five.
Speaker 3: He had grown.
Speaker 4: Up in Oklahoma and he had gotten into the catalytic
Speaker 4: converter business. And when he was pulled over, what he
Speaker 4: said in response to why do you have all these
Speaker 4: catalytic converters was I'm a legitimate catalytic converter dealer. I'm
Speaker 4: a scrap metal dealer. And they didn't actually charge him
Speaker 4: with the catalytic converters. He happened to also have a
Speaker 4: small amount of drugs in his car and an unlicensed gun,
Speaker 4: so they charged him with that, but they didn't charge
Speaker 4: him with the catalytic converters. That traffic stop was sort
Speaker 4: of the beginning of tracing this whole network because of
Speaker 4: what they found out about Tyler Curtis.
Speaker 1: Next, and so Curtis really did have this business.
Speaker 4: Yeah, And that's one of the tricky things about this
Speaker 4: whole industry was that Tyler Curtis had actually worked. He
Speaker 4: had learned about the business at a legitimate scrap metal
Speaker 4: recycling catalytic converter recycling outfit outside of Tulsa, and that's
Speaker 4: where he learned the business. And then he said, wow,
Speaker 4: this business is booming. He started his own business. But
Speaker 4: the question with catalytic converters is how much due diligence
Speaker 4: are you doing when people show up with these catalytic converters.
Speaker 4: And if someone shows up with the truckload, then if
Speaker 4: they don't have paperwork, they don't show where they came from,
Speaker 4: you might be buying stolen converters. Now, what the authorities
Speaker 4: allege was that Tyler Curtis and the people up the
Speaker 4: chain from him, they really leaned into buying from anyone,
Speaker 4: no matter how sketchy, even encouraging people to bring stolen
Speaker 4: catalytic converters. That's the allegation. But it's very difficult to
Speaker 4: tell if you just look at the catalytic converters where
Speaker 4: they came from.
Speaker 1: Yeah, let's talk about that for a minute, because we
Speaker 1: talked about how you get underneath the caring and take
Speaker 1: this thing off, but how do you take off a
Speaker 1: catalytic converter if you're going to steal one.
Speaker 4: Usually if they're going to steal one, they will pull
Speaker 4: up to a parking lot driveway.
Speaker 3: Someone will hop out.
Speaker 4: They'll have a jack, like a hydraulic jack, or at
Speaker 4: least a floor jack. They'll jack up the car really quickly,
Speaker 4: crawl underneath, take out what's called a sawzle, which is
Speaker 4: a reticular saw. It's a handheld battery powered saw, and
Speaker 4: they'll saw the pipe on either end of the converter
Speaker 4: and then they'll pull it out. They can do it
Speaker 4: in a couple minutes, throw in the back of the car,
Speaker 4: drive off.
Speaker 3: That's the standard theft.
Speaker 4: But once you have it off the car, there's actually
Speaker 4: no indication where it came from. You cannot look at
Speaker 4: a catalytic converter and say it came from this specific car.
Speaker 3: You can say the make and model.
Speaker 4: They have a parts number essentially that you can use
Speaker 4: to figure out, oh, this was from a Toyota Tundra,
Speaker 4: this was from a Toyota Prius.
Speaker 1: There's not only a VIN number on the converter.
Speaker 3: There's not They don't come with that. So that means
Speaker 3: if you have a.
Speaker 4: Whole box full or truck full or warehouse full of
Speaker 4: catalytic converters. Someone can't go through them and say, oh,
Speaker 4: these are stolen in these aren't now. A lot of
Speaker 4: cops will say I can tell because they're rough cut,
Speaker 4: which means they look like they were cut with a
Speaker 4: saw instead of unbolted from the car. But the reality
Speaker 4: is a lot of junk yards where they legitimately cut
Speaker 4: them off.
Speaker 3: They also use sazzles.
Speaker 4: They might cut it a little more carefully, but it's
Speaker 4: very difficult to sort of take someone in a serious
Speaker 4: case in front of a court and use like the
Speaker 4: saw mark as the evidence that you're using to try
Speaker 4: to put them away, right, because if it's in.
Speaker 1: A junkyard and the car is junked anyway, and you
Speaker 1: legitimately want to get the kind of a converter, why
Speaker 1: would you take time to carefully unbolt the thing. Just
Speaker 1: take it off.
Speaker 4: Yeah, all they're going to do is recycle it. They're
Speaker 4: going to crush it and take the inner core dust out,
Speaker 4: and that's going to be smelted and eventually refined back
Speaker 4: into the metals.
Speaker 3: So it doesn't matter how you cut it.
Speaker 4: And not only is that a legitimate business, it's an
Speaker 4: important business, like the recycling of these metals is actually
Speaker 4: very important, and I think a quarter of all PGMs
Speaker 4: are actually recycled, and it should be more.
Speaker 3: And so you have this strange mixture of this.
Speaker 4: Legitimacy and then the illegal side of it, kind of
Speaker 4: infiltrating into a legitimate business.
Speaker 1: And that's exactly what drew you to Tyler Curtis. He's
Speaker 1: running this business and the converters he's getting are probably
Speaker 1: coming from all kinds of places, but the cops are
Speaker 1: really suspicious, and so they decide, all right, we're going
Speaker 1: to put our eyes on this guy.
Speaker 3: Yeah.
Speaker 4: I mean they get suspicious of Tyler Curtis in part
Speaker 4: because they started arresting a lot of cutters street cutters,
Speaker 4: people who they catch cutting them off cars. And some
Speaker 4: of those people lead them to another intermediate buyer. They're
Speaker 4: selling to a guy, and that guy shows up at
Speaker 4: Tyler Curtis's place. So they put a GPS on this
Speaker 4: guy's car, and he shows up at Tyler Curtis's place
Speaker 4: and they say, well, maybe Tyler Curtis is bigger than
Speaker 4: we thought.
Speaker 3: They get a warrant for his iPhone and iPad.
Speaker 4: And then they discover oh, he's got links to some
Speaker 4: larger network allegedly, and then they get a warrant for
Speaker 4: what's called a pole camera, which is like it sounds
Speaker 4: a camera that you put on a pole, but surreptitiously,
Speaker 4: so probably like a utility guy goes out and climbs
Speaker 4: a pole, puts it outside of his place, and then
Speaker 4: they're watching his facility twenty four hours a day, and
Speaker 4: they start to see.
Speaker 3: The volume that are coming in.
Speaker 4: Pickup trucks pulling up, U haul's pulling up, people with
Speaker 4: trailers attached pulling up, and they've got fifty one hundred
Speaker 4: two hundred converters in the back and he's pricing them,
Speaker 4: or someone he works for him is pricing them. They're
Speaker 4: paying them in cash, and they eventually calculate that he's
Speaker 4: handling five thousand to six thousand converters per week.
Speaker 3: So that's just people showing up pretty much all the.
Speaker 4: Time with loads of converters. So he's really running a
Speaker 4: booming business. There's millions of dollars coming through. And the
Speaker 4: crazy thing is that all of it is in cash,
Speaker 4: Like they're really operating in cash. It's a cash business.
Speaker 4: And so now that's not all profit he's not making
Speaker 4: millions of dollars of profit, but he's in the seven
Speaker 4: to eight figures range in terms of what he's doing
Speaker 4: over the course of less than a year. So that's
Speaker 4: a lot of cash that you need to be dealing
Speaker 4: with and have around all the time.
Speaker 1: So Tulsa is in a very big place. These converters
Speaker 1: have to be coming from all over the place.
Speaker 4: Then, yeah, they quickly discover that they're coming from all
Speaker 4: over the Southwest. They're coming from Texas, they're coming from Oklahoma, obviously,
Speaker 4: but they're coming from the Midwest, like some from California.
Speaker 4: Like they're driving in. People are bringing U hauls and
Speaker 4: trucks full of them, and you know, they stand there
Speaker 4: and they price them out, they pay them in cash,
Speaker 4: and then they're gone. So then it creates this additional question, well,
Speaker 4: where's all this.
Speaker 3: Cash coming from?
Speaker 4: And one of the things they discover is that they're
Speaker 4: packaging them up in these boxes and then shipping them
Speaker 4: to New Jersey.
Speaker 1: After the break, what happened to those catalytic converters in
Speaker 1: New Jersey? Evan, So the cops are now tracing up
Speaker 1: the chain. I think the phrase you use in the
Speaker 1: pieces that they wanted to kind of get the head
Speaker 1: of the snake.
Speaker 4: Yeah, that's what the detective in Tulsa PD, whose name,
Speaker 4: by the way is Kansas Core, which is an incredible
Speaker 4: name for someone who's investigating catalytic converter theft, where the
Speaker 4: prize thing that you're getting is the core and everyone
Speaker 4: calls it the core in the business. So Kansas Corps
Speaker 4: was the person who really spearheaded the investigation out of
Speaker 4: Tulsa PD. He was the person who essentially said, like,
Speaker 4: we can get to the top, and yeah, his superior
Speaker 4: told me, we want to cut the head off the snake.
Speaker 1: So Kansas Core traces these catalytic converters from Tulsa to
Speaker 1: New Jersey and what do they find there?
Speaker 3: In New Jersey?
Speaker 4: They found this company called DJ Auto, which was operated
Speaker 4: by a pair of brothers. The older one, his name
Speaker 4: is Lovin Kanna. Lovin's sort of his nickname, everyone calls him.
Speaker 4: And the two of them had been in the scrap
Speaker 4: metal business for a lot long time, you know, recycling
Speaker 4: all kinds of things, batteries, air conditioners, that sort of thing,
Speaker 4: and they shifted into entirely dealing with catalytic converters in
Speaker 4: twenty twenty when the prices went up and it was
Speaker 4: clear that this was a huge business. And then pretty
Speaker 4: quickly they started receiving converters from all around the country.
Speaker 4: So they figured out how to sort of network with
Speaker 4: regional players like a Tyler Curtis, who would sort of
Speaker 4: gather up all the local catalytic converters, put them in
Speaker 4: a box, ship a bunch of palettes of those catalytic
Speaker 4: converters to them in New Jersey, and then they would
Speaker 4: take it the next step. They built a significant business,
Speaker 4: not just selling the converters, but also this app that
Speaker 4: they launched where you could price catalytic converters. So one
Speaker 4: of the hard things about legitimate or illegitimate business in
Speaker 4: catalytic converters is that the metal prices fluctuate, so by
Speaker 4: the time you go to sell it, the price may
Speaker 4: be different than when you either obtained it legally or
Speaker 4: stole it, and so on their app, you could actually
Speaker 4: check the prices day by day. You could even lock
Speaker 4: in prices, so you could say I want to lock
Speaker 4: in this many converters at this price. It's called hedging,
Speaker 4: so if the price goes down, then you're good and
Speaker 4: you're not going to lose your shirt over whatever lot
Speaker 4: you have of catalytic converters. So they were sophisticated operation.
Speaker 4: And they also were just making money hand over fist.
Speaker 4: I mean, this is where the money gets really big.
Speaker 4: We're talking five hundred and forty five million dollars alleged
Speaker 4: by the Justice Department over the course of essentially less
Speaker 4: than three years.
Speaker 3: Again in revenue.
Speaker 4: That's not their profits, but that's the amount of cash
Speaker 4: that was passing through this business.
Speaker 1: And so they were getting these converters from all over,
Speaker 1: like when Kansas Core is talking about trying to trace
Speaker 1: up the line. So you have these guys who are
Speaker 1: either selling them legitimately from junk yards or other places.
Speaker 1: We're chopping them off cars and then selling them to
Speaker 1: another person and then selling them to an intermediary like
Speaker 1: Tyler Curtis and Tulsa, And there are Tyler Curtises all
Speaker 1: over the place, and then they're all funneling to New Jersey.
Speaker 4: Yeah, So the Conna Brothers had and Digiato, they had
Speaker 4: a facility. I went there and I interviewed some of
Speaker 4: the other people that worked next to it, and they
Speaker 4: said they were just coming in twenty four hours a day,
Speaker 4: like we're talking to tractor trailers full of catalytic converters.
Speaker 4: And also they were getting shipments through major freight companies,
Speaker 4: so they're getting pallettes and palettes of these. Eventually they
Speaker 4: bought a junk yard, which was a larger place for
Speaker 4: them to receive the catalytic converters. And also a junk
Speaker 4: yard is sort of a natural place where you would
Speaker 4: also get legal catalytic converters, so I think the authorities
Speaker 4: would allege that they did that kind of as a cover,
Speaker 4: but it's a great place to receive catalytic converters. So
Speaker 4: they had these facilities, they would receive them from all
Speaker 4: around the country, and then they take them to the
Speaker 4: next step, which is they have in the end four
Speaker 4: decanning machines, which are essentially things that you take the
Speaker 4: catalytic converter and you stick it in there and it's
Speaker 4: like a guillotine and it slices it open and then
Speaker 4: it crushes it and all the dust from the ceramic
Speaker 4: core falls into a box. So then you have what's
Speaker 4: called catalytic converter dust, which is the metals are in there.
Speaker 4: They're amidst that dust. In fact, they have a special
Speaker 4: vacuum that vacuums up the dust that kind of drifts
Speaker 4: into the air. Because that dust that just drifts off
Speaker 4: of it is also valuable.
Speaker 3: You need to collect it all. So they had four
Speaker 3: of these machines.
Speaker 4: They're running them all the time, and they're taking all
Speaker 4: these converters and they're putting them in boxes and they're
Speaker 4: sending them on to a refiner based in New Jersey.
Speaker 4: So that's where the process kind of like moves on
Speaker 4: to its next step. And these guys were really I mean,
Speaker 4: they were really living the high life.
Speaker 3: You know.
Speaker 4: They bought Ferrari McLaren, you know, the highest end cars
Speaker 4: for hundreds.
Speaker 3: Of thousands of dollars.
Speaker 4: They bought a big house in New Jersey on a
Speaker 4: big plot of land, and they were basically scrap metal
Speaker 4: dealers made good, you know, they were at the top
Speaker 4: of the industry.
Speaker 1: With Gigi Audo. The cops who are pursuing this case
Speaker 1: have the same kind of question as they do with
Speaker 1: Tyler Curtis back in Tulsa, which is, how do you
Speaker 1: tell whether this is a legit operation? How are you
Speaker 1: able to tell where a crime may have been committed?
Speaker 1: So how do they start to zero in on their case.
Speaker 4: The complicated question for the cops here is they have
Speaker 4: some intuition that these people are dealing in stolen Caldic.
Speaker 3: Converters, but you have to be able to prove it.
Speaker 4: And first of all, you have to prove that a
Speaker 4: certain number of them are stolen, and then you have
Speaker 4: to be able to prove that they knew they were stolen.
Speaker 4: Both of those things have to be true if you're
Speaker 4: going to win the case or get indictments. Even so,
Speaker 4: proving that there were stolen converters in there involved essentially
Speaker 4: tracking who showed up at different places, and then they
Speaker 4: combine that with sending confidential informants in to sell to
Speaker 4: these places, and the confidential informance would often come in
Speaker 4: and tell some story about how I picked these up
Speaker 4: off a guy who he was chased by the cops
Speaker 4: and then he hit him in the woods and then
Speaker 4: he got him back out, you know, elaborate story about
Speaker 4: how sketchy they were, in order to establish a sort
Speaker 4: of trail of evidence that they were buying catalytic converters
Speaker 4: that they knew had a sketchy origin or knew were
Speaker 4: explicitly illegal.
Speaker 3: You know, they were stolen out of a warehouse, so
Speaker 3: that sort of thing.
Speaker 1: So they sent these guys in there, and did they
Speaker 1: buy from them?
Speaker 3: They did.
Speaker 4: It's hard to tell if there were more cases, and
Speaker 4: I'm sure if it goes to trial, the defense might
Speaker 4: offer more cases where they might have rejected that. It
Speaker 4: may be the case that they sent in a bunch
Speaker 4: and they rejected them and they.
Speaker 3: Said, oh, I don't want to buy those.
Speaker 4: But they certainly were able to document cases where people
Speaker 4: came in trying to sell sketchy converters and they bought
Speaker 4: them all gleefully, according to the indictments.
Speaker 1: So Evan, how did this ultimately all unravel Well.
Speaker 4: The investigation became extremely sprawling, involved the Department of Homeland Security,
Speaker 4: It involved police departments all over the United States.
Speaker 3: The investigation became.
Speaker 4: So large, so unwieldy that all of these different organizations,
Speaker 4: these police departments and the FEDS and everyone else, the
Speaker 4: important players, had to get together in Philadelphia for three
Speaker 4: days to sort of plot the end game of how
Speaker 4: they were going to take these places down, because they
Speaker 4: had locations all over the country to sort of pick
Speaker 4: and choose from, and they wanted to do them all simultaneously,
Speaker 4: so they came up with a code name, because cops
Speaker 4: loved to come up with a code name.
Speaker 3: They called it Operation Heavy Metal, and.
Speaker 4: They picked a day in early November of twenty twenty
Speaker 4: two when they were going to take everybody down at
Speaker 4: the same time. The day came and I interviewed actually
Speaker 4: the next door neighbor to Tyler Curtis's business, and he
Speaker 4: had actually rented the warehouse to Tyler Curtis and believed
Speaker 4: from all outward appearances it's a completely legitimate business. And
Speaker 4: he was sort of described that morning in November where
Speaker 4: he was getting a coffee and he just looked out
Speaker 4: his window and there was a tank outside and there
Speaker 4: were like shooters on their roof next door, and he
Speaker 4: was sort of like, what is going on? And he thought, oh,
Speaker 4: this guy rerounded the warehouse who must be dealing with
Speaker 4: drugs and weapons or something. And then he sort of
Speaker 4: went out and talked to the cops and they told
Speaker 4: him it was catalytic converters, and he said, well, I
Speaker 4: don't know, it seems like a little overkill with the
Speaker 4: swat teams that they brought, but they did that all
Speaker 4: over the country. They brought in sort of their heaviest tools.
Speaker 4: They raided the warehouse in Tulsa. They also in Nevada,
Speaker 4: in Wisconsin, they did a rate of Virginia. They did
Speaker 4: multiple raids in New Jersey for the Kanas, So that
Speaker 4: included their facility and also their home where they had
Speaker 4: all the fancy cars and their six car garage. This
Speaker 4: Ferrari is one of several luxury car seas from this
Speaker 4: one point seven million dollar home. Wednesday, it's where federal
Speaker 4: agents say DG Auto LLC is based.
Speaker 3: You're in Oklahoma.
Speaker 2: All raid took place at a facility and Whyner County
Speaker 2: this morning.
Speaker 3: Analytic converter theft ring.
Speaker 1: This might be happening in your neighborhood, it's happening all
Speaker 1: around the country.
Speaker 2: One of these defendants is actually has an Instagram account
Speaker 2: with a picture wearing a necklace with a catalytic converter
Speaker 2: on it. So big money here, big arrests, a big
Speaker 2: case by the Department of.
Speaker 3: Justice around the country.
Speaker 4: They arrested twenty one different people connected to the alleged
Speaker 4: network and the allegations are basically like interstate stolen property
Speaker 4: and money laundering.
Speaker 1: And so they took Tyler Curtis into custody.
Speaker 3: They took Tyler Curtis into custody.
Speaker 4: Actually he had pulled out right when they came with
Speaker 4: their raid, and then he came back maybe to see
Speaker 4: what was going on. They arrested everybody without incident, and
Speaker 4: then Tyler Curtis was Actually he couldn't even get out
Speaker 4: on bail for a good five months after they had
Speaker 4: him in, and the Connas to this moment have not
Speaker 4: gotten out on bail. They're actually still in jail, winning trial.
Speaker 1: Tyler Curtis was in custody but made bail and is
Speaker 1: now out awaiting trial. What does he have to say
Speaker 1: about his case?
Speaker 4: Well, he's pleaded not guilty, and I spoke to him briefly.
Speaker 4: He seemed eager to talk about what had happened. I
Speaker 4: think he does have a defense that he could put
Speaker 4: on here.
Speaker 3: But then when he came back.
Speaker 4: He said that he'd consulted with his lawyer and he
Speaker 4: had to wait till the case was resolved before we
Speaker 4: could actually talk.
Speaker 1: What do Tyler Curtis's lawyers say about their client.
Speaker 3: His lawyer declined to speak on his behalf.
Speaker 1: And what about the Khana brothers, what do they say
Speaker 1: about the charges against them.
Speaker 4: The Kanna brothers both have pleaded not guilty in California
Speaker 4: to the federal charges against them. Love and Kanna's attorney
Speaker 4: emphasize that he is innocent until proven guilty, of course,
Speaker 4: that applies to both of them, and that he has
Speaker 4: the support of the community. It's worth making sure everyone
Speaker 4: understands that everyone involved here is not guilty until proven otherwise.
Speaker 1: I'm curious. You have so many details about what was
Speaker 1: going on inside the investigation and what they knew. How
Speaker 1: do you know all this stuff?
Speaker 4: Well, some of what I know comes from the indictments,
Speaker 4: so the indictments are pretty detailed. But then in looking
Speaker 4: for court documents around the case, I sort of happened
Speaker 4: upon the reality that a number of search warrant affidavits
Speaker 4: and seizure affidavits which are filed with federal judges, were
Speaker 4: available through the Federal Court Document system which called PACER.
Speaker 4: They were not sealed, and typically in cases like this
Speaker 4: they would be sealed. And then I also spent time
Speaker 4: on the ground in Tulsa just interviewing people and talking
Speaker 4: to people about what Tyler Curtis's business was like and
Speaker 4: even the Tulsa PD like what they sort of went
Speaker 4: through in trying to figure.
Speaker 1: It out when we come back where all that dust
Speaker 1: ends up. So after the police had moved in and
Speaker 1: rounded up all these people, then the question became, where
Speaker 1: did all that dust that contained these precious metals go,
Speaker 1: that generated all that cash that was able to pay
Speaker 1: for these converters all the way down the line, and
Speaker 1: that's where the next step of your story went up.
Speaker 4: From DG, there's another organization and that organization is in
Speaker 4: the court tak position is called a refiner in Burlington,
Speaker 4: New Jersey, and it's actually a company called Doa that's
Speaker 4: based in Japan, and they were buying the dust that
Speaker 4: was being sold by DG, and their expertise is taking
Speaker 4: that dust, shipping it to Japan where they have facilities
Speaker 4: that smelt and then refine that dust back into pgm's
Speaker 4: platinum group metals, which they then sell to the market.
Speaker 4: So they're ultimately where all the science lives. That's where
Speaker 4: they really can take the inside of a catalytic converter
Speaker 4: and turn it back into the thing that's valuable. And
Speaker 4: again that is an important business because the recycling business
Speaker 4: depends on smelters and refiners being able to get the
Speaker 4: metals out. Now, in this case, DOA was buying from DG.
Speaker 4: I mean they were buying also some catalytic converters too,
Speaker 4: but they were buying all this dust.
Speaker 3: And if you think about the dust, the.
Speaker 4: Dust is so far from the catalytic converter that was
Speaker 4: on the car in terms of what you could do,
Speaker 4: like you literally could not possibly trace this dust back
Speaker 4: to where it came from.
Speaker 3: It's dust. And that company is not indicted in this case.
Speaker 1: And we should also say that company is not accused
Speaker 1: of any wrongdoing. Its name was redacted in the indictments
Speaker 1: and prosecutors refer to it only as an unindicted co conspirator.
Speaker 4: Now, I went down to the company to see what
Speaker 4: was going on there.
Speaker 3: I talked to and assistant purchasing manager there.
Speaker 4: He didn't really want to talk about the business, and
Speaker 4: he didn't really want to talk about stolen catalytic converters,
Speaker 4: and he said we would talk more later, and then
Speaker 4: he sent me to the press liaison, who then never
Speaker 4: responded to any of my requests. But people in the
Speaker 4: recycling business, refiners, everybody has this problem, which is that
Speaker 4: if you get a box of dust that's catalytic converter dust.
Speaker 4: There's a pretty good chance that's somewhere in there fractionally
Speaker 4: there's a stolen converter that is part of that dust,
Speaker 4: But how could you possibly figure out where it came from,
Speaker 4: which one it was. And so that's where the challenge
Speaker 4: of sort of trying to pull apart the illegal business
Speaker 4: that's infiltrated illegal business, trying to pull it back out
Speaker 4: becomes incredibly challenging the further up the chain you go.
Speaker 1: So Tyler Curtis and DG Mike claim, well, we didn't
Speaker 1: do anything wrong, we were just buying a legal product
Speaker 1: on the market. Does that argument actually hold any weight?
Speaker 4: Well, I think there are people in the industry who
Speaker 4: say they're just being made an example of because this
Speaker 4: is such a huge problem and they were dealing with
Speaker 4: it the way everyone else was dealing with it. They
Speaker 4: were buying a ton of converters. Yes, But also I
Speaker 4: had one person tell me if you look at the
Speaker 4: number of stolen catalytic converters, which is anywhere from the
Speaker 4: low end, like sixty five thousand a year to up
Speaker 4: to one hundred and fifty thousand a year in the
Speaker 4: United States, and you kind of.
Speaker 3: Run the math on.
Speaker 4: Even if they had a majority of those that were
Speaker 4: running through let's say DG Auto, it's still not most
Speaker 4: of their business, like most of their business was still legal.
Speaker 4: And so the question becomes, how many illegal converters infiltrating
Speaker 4: your business turns you into a criminal? And I think
Speaker 4: the law is not really set up to try and
Speaker 4: confront that. And the industry is also struggling with that
Speaker 4: because people in the legitimate catalytic converter recycling industry, they
Speaker 4: also want this problem dealt with.
Speaker 3: They don't want to feel like criminals. You know.
Speaker 4: Some of them said, I don't even tell people what
Speaker 4: I do anymore because people think that I'm connected with
Speaker 4: this thing that got stolen off.
Speaker 3: Their car in their driveway and they hate me.
Speaker 4: And so the legal recyclers are also looking for a
Speaker 4: way to kind of get this out of the supply
Speaker 4: chain stream, but it's extremely difficult to do. It's a
Speaker 4: very strange criminal circumstance.
Speaker 1: So after this dust goes to the refiner and is
Speaker 1: turned back into metals, what happens to those metals?
Speaker 3: They make more catalytic converters.
Speaker 4: That's the primary use of the metals going back into
Speaker 4: brand new catalytic converters, which was one of the things
Speaker 4: that really just stuck with me in the story that
Speaker 4: if your catalytic converter gets stolen from your driveway, you
Speaker 4: get a new one. There's some chance the actual PGMs
Speaker 4: in your catalytic converter came from a stolen catalytic converter.
Speaker 4: They go back on the market in a totally legitimate
Speaker 4: market and no one knows where they came from.
Speaker 1: Kevin, what is the answer here? You said that legitimate
Speaker 1: catalytic converter recyclers want the shady side of the business
Speaker 1: to be shut down. But is there an answer to
Speaker 1: fixing this problem.
Speaker 3: There's not a great answer.
Speaker 4: First of all, the answers are often state by state,
Speaker 4: so states come up with things like people can get
Speaker 4: their catalytic converters etched with a serial number so it
Speaker 4: is actually traceable to your car.
Speaker 3: If it gets.
Speaker 4: Stolen, you can bolt it on better. There's kind of
Speaker 4: a cover that you can put over it.
Speaker 3: But then in terms of the.
Speaker 4: Law, you know, they always kind of fall back on
Speaker 4: changing catalytic converter theft from a misdemeanor to a felony,
Speaker 4: or making sure that you have to have a certain
Speaker 4: kind of paperwork. If you possess a catalytic converter, you
Speaker 4: have to be able to say what car did it
Speaker 4: come from? And you have to have a license to
Speaker 4: possess catalytic converters. But that requires all the way up
Speaker 4: the chain people keeping track of the paperwork in a
Speaker 4: business that when you're dealing with junk yards muffler shops,
Speaker 4: it is kind of tough to do, especially if the
Speaker 4: laws are different for every state. Because some of the
Speaker 4: dealers work across many states, and one told me something
Speaker 4: that I do in one state I can get arrested
Speaker 4: for in another state.
Speaker 1: I guess if you look way way down the road,
Speaker 1: electric cars don't need catalytic converters.
Speaker 3: That's the answer.
Speaker 4: As long as electric cars continue their rise, maybe that'll
Speaker 4: solve the problem, although in the meantime the problem arguably
Speaker 4: gets worse because the higher admission standards you have, the
Speaker 4: higher concentration of PGMs you have in.
Speaker 3: The catalytic converters.
Speaker 4: So as the United States and other countries institute these
Speaker 4: emission standards higher and high and hire, the catalytic converters
Speaker 4: become worth more, so you might have a short term
Speaker 4: problem and a long term solution.
Speaker 1: Evan right left, Thanks so much for coming on the show.
Speaker 3: Thank you really enjoyed it.
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