When people say “Montana license plate loophole,” they’re generally talking about rich people registering their supercars to a nonsense LLC formed in Montana instead of to themselves, to skip paying sales tax and registration fees. There are ways to do this legally and somewhat legitimately, but not every alleged tax-dodger has time to proceed tactfully. The California Attorney General’s office just posted a “56-count complaint” charging 14 people with varying degrees and a mix of “conspiracy, filing false sales tax returns, failing to file tax returns, perjury, and money laundering.”
Suspicious Montana tags can be spotted on cars all over the country, but even a casual observer can spot a high concentration of them in California. You’ve probably seen at least one other news story along the lines of “California’s cracking down on Montana plates” in the last few years, too.
The California Department of Tax and Fee Administration (CDTFA) and the CA DMV have identified “close to 500 California dealers involved in more than 2,500 sales since 2023 to customers claiming to use the vehicle in Montana.” The government posits, “These sales, many of which involve luxury or exotic cars, cost the state more than $10 million a year in lost tax revenue.”
Busts from investigations so far have reportedly recovered $2.3 million in revenue for the state. Car buyers who get caught fraudulently claiming their cars are used out-of-state can be hit with serious penalties, including being forced to pay 50% of the tax on the vehicle’s purchase price.
That brings us to this week’s news: a 56-count felony complaint brought against 14 individuals. The allegations, laid out in a press release from California Attorney General Rob Bonta and detailed in a 56-page complaint, include “conspiracy, money laundering, perjury, and filing false tax returns to evade $1.8 million in taxes on over $20 million in luxury vehicle purchases.” Basically, some car buyers allegedly bought fake bills of lading (a legal shipping document) and submitted false DMV and CDTFA forms claiming the cars were shipped out of state, but the cars never actually left California.
Cars in the mix include some heavy hitters (Porsche 918, Ferrari TDF) and Camrys of the crypto-class (Lamborghini Urus, Merc GLE). The California AG Bonta’s official Facebook page shared a few pictures of high-end cars, but it’s not clear if those specific vehicles are part of this complaint filing. Here’s what I was able to pull out of the legal docs:
- 2022 Lamborghini Urus
- 2022 Lamborghini Huracan LP 610-4 STO
- 2023 Lamborghini Huracan STO
- 2021 Lamborghini Huracan LP 610-4 EVO Spyder
- 2023 Lamborghini Huracan Tecnica
- 2022 Lamborghini Aventador LP 780-4 Ultimae
- 2023 Lamborghini Aventador Ultimae
- 2015 Lamborghini Aventador LP700-4 Roadster
- 2016 Ferrari F12tdf
- 2018 Ferrari F8 Spider
- 2020 Ferrari 488 Pista (Erroneously referred to as “588 Pista” in a document)
- 2023 Ferrari SF90
- Porsche 918 Spyder
- 2018 Porsche 911 GT2RS
- 2019 Porsche Speedster
- 2019 Porsche 911 GT3 RS (Erroneously referred to as “Porsche 311” in a document)
- 1960 Porsche 356
- McLaren Elva
- 2022 McLaren 765LT Spider
- 2020 BMW M2
- 2020 BMW X7
- 2022 BMW X7
- 2021 Mercedes-AMG GLE 63 S
- 2015 Aston Martin Vantage V12S
The state has not released its master list of the “close to 500” dealers it has its eye on for this type of fraud. But the outfits implicated in this big recent bust are not small-time sketchy-lot operations; some of these are big stores. Here’s the list:
- Ferrari of San Francisco (Mill Valley, CA)
- San Francisco Exotic Cars LLC
- San Francisco Sports Cars
- BMW of Murray (Murray, UT)
- Lewisville Autoplex LLC (Dallas, TX)
So, how did this particular batch of alleged tax dodgers get caught? And why them and not every fancy car with an MT tag on it? After a quick scroll through the official complaint, I think the short answer is that these people put a lot of their crimes in writing—allegedly.
One defendant texted that another conspirator “made me provide a fake bill of lading which cost $200 but did allow me to pickup the Urus.”
When coordinating a bill of lading, one text instructed, “just gotta throw some generic signatures” (to create a legitimate-looking legal document).
Another message simply asked a co-conspirator, “Can you put some scribbles please and pdf it.”
My favorite is this one: “am buying car. need to do Montana thing. Wuout. he is AWESOME!!!!!!!” (Wuout refers to a co-conspirator allegedly at the center of creating fake documentation to make it look like cars were in Montana when, in fact, they were not.)
The state’s AG office also cited some pretty damning texts talking about logistics and explicit intent to evade taxes and proper registration.
As the AG also explained: “The [state Department Of Justice] 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.”
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