Undercover sting, rejected car inspections: How emissions testing fraud impacts Austin

AUSTIN (KXAN) — “Do you have one?”

Tucked in a back room at the Travis County Tax Office, Sgt. Jose Escribano walks over to a two-way window after getting a phone call.

“Nineteen,” he said, tapping on the window, pointing to a man who is talking to a teller. “Window 19! Right there!”

On a Monday morning in early October, KXAN was granted rare access to an undercover sting operation conducted by the Travis County Constable Precinct Three’s Clean Air Task Force. Scanning the waiting room, and their laptops, the small team of investigators are searching for bogus vehicle inspection reports.

“This is organized crime,” Escribano said. “There’s no question about it.”

‘Clean scans’

Escribano and his team led the statewide fight to end the fraud tied to Texas’ paper license plates, which became a national concern. He’s now working to clean up what he calls the “invisible” problem of emissions testing fraud.

“Anybody can see the tags,” Escribano said. “This? Regular law enforcement is oblivious, as is the tax office. They can’t see it.”

Within the first 30 minutes, Escribano is already questioning someone suspected of bringing in a fraudulent inspection report. That person is escorted out, along with several others that day.

“That’s a clean scan,” Escribano yells to his team, after getting word a tax office employee spotted another questionable inspection before lunchtime.

A “clean scan” is when a vehicle is given a passing emissions inspection illegally. The test is required in 17 Texas counties annually in order to register, or reregister, your car. The scheme works when an inspector is paid a bribe to “pass” a vehicle that should fail, Escribano said. Typically, that occurs when a car isn’t performing to clean air standards set by the Environmental Protection Agency to reduce smog.

Emissions tests can be bypassed without the car even being present. The system can be cheated with a computer simulator, or by connecting an emissions analyzer to a different car that can pass. The fake results are registered as an official state record with the Texas Commission on Environmental Quality (TCEQ), which makes it difficult to detect. When a tax office teller, for instance, goes to verify that an inspection was done through TCEQ’s website, mytxcar.org, a clean scanned vehicle shows up as being legitimately inspected — even though it wasn’t.

“We’re not going to be able to…completely stop and shut it down,” Precinct Three Constable Stacy Suits said. “But, we can damn sure figure out who the high volume people are marketing these things to the public.”

The high-volume sellers are coming from Dallas, Houston, and El Paso, he said.

Over two days at the Travis County Tax Office, Suits’ task force obtained at least five arrest warrants, with more pending, after fraudulent inspections originating from Dallas and Houston were confiscated.

“On average, there’s very little in the Travis County-Williamson County area because they know that we have a task force and we’re monitoring it,” Suits said. “We’re actively looking for it.”

Rejecting inspections

“On top of everything else, our tax office employees have to be fraud investigators,” said Travis County Tax Assessor-Collector and Voter Registrar Bruce Elfant, who was elected in 2012, and requested the sting operations. “It’s very tedious. The better we get at identifying them, the better the bad guys get at falsifying them.”

The Travis County Tax Office is catching around 50 suspected fraudulent inspections a month, Elfant said, acknowledging the untold number of clean scans that are missed. The problem is so bad, his office quietly refused to accept vehicle inspection reports nearly eight months ago for cars, subject to emissions testing, from outside of Travis and Williamson counties, he revealed exclusively to KXAN.

“We have had to turn people away. I think certainly people are frustrated by it, but we’re dealing with fraud,” Elfant said. “Some day, when the state can get a handle on the statewide fraud, we’d be happy to go back accepting paperwork from around the state. But, until then, we’re just going to limit it to Travis and Williamson.”

KXAN contacted tax offices in Dallas, Harris and El Paso counties to see how other large areas are tackling this fraud. All spoke briefly to their ability to detect counterfeit inspection reports, but didn’t specifically address clean scanning. El Paso County Tax Assessor-Collector Ruben Gonzales said his office doesn’t have a detection program in place at the moment and “generally do[es] not reject inspections.”

• Dallas County: “The Dallas County Tax Office has a Quality Assurance team that works with local and state law enforcement when fraudulent concerns arise to address the situation,” said Dallas County Tax Office Chief Deputy Peggy McCormick. “Employees of the Dallas County Tax Office are similarly trained to detect counterfeit VIRs and any irregularities with out of county inspections.”
• El Paso County: “In response to your inquiry regarding fraudulent inspections on emissions, per se we do not have a detection/inspection program in place currently,” said Gonzalez. “However, we do see on occasion fraudulent VIR’s when owners attempt to renew their annual registration. These VIR inspection forms are picked up by my processing clerks and forwarded to our TAC Enforcement Division for further investigation. On certain occasions we forward these inspections/copies directly to our local DPS Enforcement Compliance Service for their investigation of the issuing inspection station. Many of the ‘red flags’ that we see are incorrect dates and times of inspection, fonts, vehicle descriptions, fees charged, etc. Due to being in Far West Texas, we generally do not reject inspections because of the 90 day window to inspect prior to registering a vehicle, however, we do require that an emissions test be provided to satisfy statute.”
• Harris County: “The Harris County Tax Office has trained its staff to verify an inspection if the state’s RTS system [TxDOT Registration and Title System-Record] cannot find the information,” a Harris County Tax Office spokeswoman said. “Once our employees confirm the receipt of a fraudulent VIR, it is reported to the DPS. *The DMV conducts training on the methods to detect fraudulent inspections.”

Atop Elfant’s large wooden desk in his office is a quote made famous by President Harry Truman: “The Buck Stops Here!”

“We take it seriously,” he said, when asked why he requested the undercover operations. “We want to be out ahead of the fraud, rather than get run over by it.”

The suspected fraud is also coming in as obvious counterfeits. One document, shown to KXAN, was detected because it contained an incorrect inspection cost of $50 for an emissions and safety inspection (it should be $18.50), a tax office official explained. Another counterfeit inspection report misspelled “sticker” in the “Two Steps One Sticker” website. It also listed the inspection station address as the Texas Department of Motor Vehicles headquarters in Austin.

TCEQ data obtained by KXAN through a public information request shows the agency is aware of more than 1.5 million likely clean scans, identified through missing or mismatched Vehicle Identification Numbers (VINs), between Jan. 1 and Oct. 5. That includes:

• Austin-Round Rock: 21,983
• El Paso County: 30,144
• Houston-Galveston-Brazoria: 547,297
• Dallas-Fort Worth: 934,543

‘More than I’d like to count’

To see how it’s supposed to work legally, KXAN went to FlashPoint Auto Inspection in Austin. Karina Pirul, a manager and vehicle inspector, showed KXAN how the emissions analyzer, which is attached by a thin cable to a computer, connects to the vehicle’s sensors through a port underneath the dashboard.

“We have to always match VIN, plate, and everything,” Pirul said. “Usually it tells us right here if it’s previously inspected, when it was last inspected, what it failed for.”

“So, it looks like it failed for the emissions,” she said, pointing to a red computer screen, showing the vehicle she’s inspecting previously didn’t pass.

Station inspectors must type their identification number into the computer, and enter a password, before any information — like the make, model, year, mileage, VIN — can be entered into the system. Once the test is finished, it’s sent to the Texas Information Management System (TIMS), a confidential third-party data system, which contains records for more than 11 million vehicles’ annual inspections.

An average inspection should take around 10 minutes. However, Escribano and his team, and TCEQ’s own website, show some “inspections” are taking place in two minutes or less. KXAN looked up the VIN of one vehicle law enforcement said had been clean scanned. We found inspection times under two minutes. Some inspection stations around the state are cranking out hundreds a day with less than a minute in between, Escribano said.

Experts said that would be impossible.

TCEQ denied KXAN’s public information request for a list of inspection stations that issued more than 150 vehicle inspection reports in a day since the beginning of the year. KXAN asked for the time the inspections started and ended in the Austin, Dallas, Houston and El Paso regions. TCEQ pointed to a previous attorney general’s office ruling, which determined the information is exempt because “records created during a motor vehicle emissions inspection” are considered confidential under the Government Code.

“The OAG confirmed that this information is confidential under Government Code Section 552.129, as it is information that relates to an individual inspection, and therefore an individual vehicle, even if no identifying information is being released,” a TCEQ official said.

FlashPoint owner Jose Carranza wants more done to stop the polluting problem. He said he turns down people “every day” who want him to give their old jalopy a pass.

“I’d say multiple times a day,” said Carranza. “Sometimes three, four times a day. Sometimes, more than I’d like to count. ‘I’ll toss you more money. I’ll give you a hundred bucks. Here’s some more money.’ I always say, ‘no, no thank you.’”

The illegal services are advertised openly online. A quick social media search turned up multiple ads promising “guaranteed” vehicle inspections where “EVERYONE” will “PASS” for a price.

“All we need is your year make model, vin [sic] number, and exact mileage and your inspection will be delivered to your email or imessage [sic] within hours!,” one Instagram ad states, using Texas’ “Official Vehicle Inspection Station” logo.

“Obviously, if it’s an emission issue, it’s an environmental issue, pollution issue,” Carranza said. “We’re in a big city, a bunch of cars with check engine lights polluting the air, I’m sure it’ll affect us eventually, right?”

Safety concerns

For law enforcement, it’s more than just air quality concerns.

In February, a 2-year-old girl was killed in a car accident in Travis County when a Jeep “failed to control speed” and crashed into the back of a Ford Fusion, according to the DPS accident report. The young girl was in a pink car seat in the back at the time.

The Jeep was clean scanned and never should have been allowed on the road, Escribano said. There are “no pending charges” against the driver, according to DPS.

Internal law enforcement records show the Jeep failed inspection in 2018 and appears to have been clean scanned in 2019, 2021, and 2022. TCEQ’s own website shows a 2022 emissions and safety inspection lasting a little over two minutes. A safety inspection in 2019 lasted just one minute and 13 seconds, and an emissions and safety inspection performed two months later took less than three minutes, a search of the Jeep’s VIN shows.

Each time, it “passed.”

We don’t know what, if any, mechanical or safety issues might have been missed if a safety inspection was bypassed. Vehicles are not typically checked for mechanical problems by officers responding to an accident, Escribano said.

Between 2021 and 2022, law enforcement records show at least 73 fatal accidents in Dallas and 104 in Houston involved a vehicle that was clean scanned.

None of those vehicles should have been allowed on the road, Escribano points out.

A third-party audit done in June 2022 identified the “10 worst stations” for likely clean scans based on the percentage of inspections with mismatched VINs. TCEQ Chairman Jon Niermann admits this has been a “challenge that predates 2017.” That has Escribano asking: Why has TCEQ been slow to stop it?

“It takes the FBI helping us on all this stuff,” Escribano said. “This needs to be a statewide task force. Put it together and put an end to this. This is ridiculous.”

The governor’s office did not respond to multiple requests seeking comment about this fraud and the request for a statewide task force.

Escribano points to TIMS, the third-party confidential data management system TCEQ pays a vendor to operate. It’s described as “the telecommunications network and centralized database system supporting the State of Texas Vehicle Inspection and Maintenance (I/M) program.” That system has a “clean scan” filter to pinpoint inspection stations that are likely performing illegal inspections, Escribano said. It’s a feature, however, only his agency, TCEQ and DPS are authorized to see.

He wants other law enforcement, and tax offices across the state, to have the same access — and training — to help ensure more inspection stations compromising the system are cut off and unable to commit fraud in the future.

TCEQ, DPS respond to concerns

No one from TCEQ or DPS would agree to an on-camera interview. In an email, Niermann disputed Escribano’s estimate of five million faked inspections calling it a “dramatic overstatement” and “not credible.” Escribano defends his numbers citing confidential parameters used by law enforcement beyond missing and mismatched VINs, which he said he can’t disclose and which TCEQ doesn’t consider.

There does appear to be some movement towards a potential solution.

In March, DPS began using a tool that “locks inspection stations out” of TIMS when data shows there are “certain indications of potential fraud,” Niermann wrote.

“Importantly, this feature is based on data logged from completed inspections—it cannot interrupt an inspection while it is in progress,” he cautioned. ” This capability was deployed at DPS’s request.”

That same month, DPS continued “Operation Cinderblock,” which was launched last year in an effort to crack down on fraudulent vehicle inspection reports. The agency is focused on stopping fraud “without impacting and inconveniencing a significant number of innocent motorists,” a spokesperson said.

A few weeks ago, TCEQ and DPS jointly “agreed to the outlines of a proposed TIMS tool that we believe is technically and administratively workable” that would stop fraudulent inspections in real-time, Niermann said.

“I personally discussed this matter with DPS Director [Steven] McCraw, including potential legal and administrative challenges to implementation,” wrote Niermann. “We also discussed anticipated limitations, for example, that some number of scans may be misidentified as fraudulent, inconveniencing innocent vehicle owners and inspectors.  At the same time, we cannot expect that this capability would eliminate all fraud.”

The next step is to “vet the idea” with the TIMS vendor, Gordon-Darby, he said.

“We have not yet determined the project budget or source of funding, nor have we developed a project timeline,” he added.  

Niermann declined an interview, citing a “lack” of technical understanding. The agency would not provide anyone else to talk with us on camera about the fraud or the fix.

“TCEQ employs a media relations team to assist news organizations like yours in obtaining the information they deem important to the public. TCEQ also employs program staff who have worked closely with media relations to assemble information for KXAN,” Niermann wrote. “These are subject matter experts with deep understanding of the agency’s many programs, a level of understanding that I typically lack. On technical subjects such as the inspection program and TIMS, complete and accurate answers are necessarily a group effort within TCEQ.”

KXAN also requested to interview McCraw to discuss DPS’ role. The agency turned down our request. A spokesperson did not give a reason why but did provide a statement.

“DPS and TCEQ have worked diligently to find solutions to the various obstacles and challenges related to making substantial changes to the TCEQ system,” DPS spokesperson Ericka Miller said. “As you likely know, TCEQ owns the system that houses the data. DPS’ Regulatory Services Division is responsible for regulating the licensees and taking appropriate action for bad actors within the program.”

“TCEQ does not have legal authority to enforce the inspection and maintenance (I/M) program. The Texas Department of Public Safety (DPS) is responsible for enforcing the I/M program, which includes taking action against inspection stations suspected of fraud,” TCEQ spokesperson Laura Lopez said.

“TCEQ is aware of the data referenced by law enforcement,” Lopez added. “TCEQ and DPS are working together to evaluate various methods for improving I/M program enforcement. Stopping an inspection in real-time at an inspection station when data patterns indicate potential fraud presents a number of challenges that would need to be resolved by both agencies before such a software modification could be implemented. TCEQ won’t comment further on specific methods to identify potential fraud being considered at this time.”

‘Tip of the iceberg’

This summer, state inspectors in Austin and Kyle were arrested, accused of selling fraudulent vehicle inspection reports. In June, the Hays County Tax Assessor-Collector’s office was audited after one of its now former employees was arrested, accused of illegally selling license plates and vehicle registrations for months.

At the time, Escribano warned this was just the “tip of the iceberg” when it comes to vehicle inspection fraud.

Since then, we learned two DPS program inspectors, with the Regulatory Services Division in Dallas, were charged with “organized criminal activity” in August for helping to facilitate fraudulent emissions tests.

William Shepherd, 45, and Destini Spencer, 28, were arrested by the Texas Rangers and charged with third-degree felonies for their roles in the alleged scheme. Shepherd was responsible for “regulatory oversight of Motor Vehicle Inspection stations,” according to court records. He’s accused of being paid more than $110,000 from several inspection stations between 2019 and 2023 in exchange for tipping them off to undercover investigations, unlocking analyzers that were locked out, and helping allow clean scans to take place, according to the complaint, obtained from DPS.

Spencer is accused of accepting payments of at least $525 this year to allow clean scanning to take place, according to court records obtained from DPS. The two employees — both suspended in August pending the results of the investigation — “provided information in exchange for monetary compensation from stations suspected of criminal activity to help them avoid detection,” DPS said.

KXAN left voicemails for multiple phone numbers associated with Shepherd and Spencer. Dallas County court officials said Shepherd does not have an attorney listed but provided one for Spencer. We reached out seeking comment and will update this story if we hear back.

DPS told KXAN in November there is “no new information to provide at this time” when asked if they are still suspended and for an update to their cases.

Four non-DPS employees were also detained for their possible involvement, DPS said in its prior news release.

“DPS strives to maintain the highest level of integrity among its employees and will pursue prosecution for those engaging in any type of criminal activity,” the agency said in a statement. “This is an ongoing investigation and further arrests and/or charges are expected.”

Conducting a fraudulent emissions test is considered “tampering with a government record,” a state jail felony, according to law enforcement.

‘Fix your system now’

TCEQ said data collected through TIMS “cannot confirm whether a vehicle was fraudulently inspected or clean scanned.” Back at the Travis County Tax Office, Escribano said the “clean scan” filter built into TIMS is used to help his team find and investigate fraud. The names of suspected crooked inspection stations are passed along to tax office employees who don’t have access to that system.

During this recent undercover sting, Escribano learned about a new inspection station in Houston he believes is clean scanning vehicles. It’s overwhelming for an agency already stretched thin. Each new lead serves as a frustrating reminder that this problem isn’t going away.

“You’re going to sit here and tell me you can’t do anything about it or point the finger at somebody else?” Escribano said, in a remark aimed at TCEQ. “I’ll tell you right now, it’s unacceptable. You need to fix your system. Now!”

Texas will phase out vehicle safety inspections in 2025 after a bill to eliminate them passed the legislature this year. Emissions tests will still be required in 17 of the more populated counties to ensure federal air quality standards are met under the Clean Air Act.

Steering clear of fraud

The following are tips for steering clear of fraud, obtaining a vehicle inspection and buying a car from a private seller, according to the Travis County Tax Office:

• Don’t buy a vehicle inspection report from social media.
• Complete your safety and emissions inspection in Travis or Williamson counties.
• Don’t let someone else take your vehicle to be inspected.
• Only pay state fees for an inspection. Safety inspections are $7. Emissions inspections are $11.50. A combined safety and emissions inspection should cost $18.50.
• Check the Vehicle Inspection Report to make sure it is accurate. It should list the type of test; license plate number; Vehicle Identification Number (VIN); vehicle make, model, and year; and odometer reading.
• Complaints about inspection stations can be reported to Texas DPS here.
• Don’t buy a vehicle sight unseen.
• Check the VIN on the car and make sure it matches the information on the title.
• Learn more about the vehicle using the VIN and a title check service. The Texas Department of Motor Vehicles provides a list here.
• Click here to find to find out how to have the vehicle transferred in your name.
• Meet the seller at the Travis County Tax Office to transfer the title together.

Photojournalist Todd Bailey, Investigative Photojournalist Richie Bowes, Director of Investigations & Innovation Josh Hinkle, Investigative Photojournalist Chris Nelson, Social Media Producer Jaclyn Ramkissoon, Digital Executive Producer Andrew Schnitker, and Graphic Artist Christina Staggs contributed to this report.