AUSTIN (KXAN) — Four employees with the Travis County Tax Assessor-Collector Office were arrested, along with three others, in a "really big organized scheme" regarding vehicle titles, according to state officials.
Authorities were alerted in March 2018 to the possible fraudulent activities happening in the tax offices for Precinct 1 and Precinct 2 after an audit by the Travis County Auditor's Office. To investigate the anomalies, Travis County District Attorney Margaret Moore requested help from the Texas Department of Public Safety.
"This audit revealed some irregularities that were alarming," DPS Regional Commander Martin Freeman said. Investigators started reviewing videotapes from the two precinct offices in question.
After more than two months of investigating, authorities arrested seven people.
The four Travis County employees ranged from someone who had been there more than two decades to a couple of employees with only a few years with the office. DPS says one of the other suspects is the spouse of an employee. The suspects are:
- Shell Kenneth Prieto-Reese, 43, Theft by Public Servant - Employed as a Tax Specialist II and has been with the county since September 2008.
- Cathy Lynn Wilson, 57, Theft by Public Servant - Employed as a Tax Specialist III and has been with the county since December 1995
- Susie Alvarez Araujo, 43, Theft by Public Servant - Employed as a Tax Specialist II and has been with the county since April 2015
- Steven Hernandez, 35, Theft by Public Servant - Employed as a Tax Specialist I and has been employed with the county since July 2015
- Hipolita Tiquet De Dios, 41, Engaging in Organized Crime
- Cecil Leary, Jr., 61, Engaging in Organized Crime
- Eulalio Hernandez, 72, Engaging in Organized Crime
PHOTOS: Suspects in scheme
Freeman says the suspects were minimizing the taxes they were paying on vehicle title transactions along with other violations.
For example, if a vehicle was purchased for $20,000, the scheme would lower the value of the purchase price so the taxes owed on it would be lower. In some cases, the county employees would take bribes in exchange for a title that shouldn't have been assigned, Freeman explains.
"If you have an employee that doesn't have integrity and is taking bribes, they can pass stamped documents and sign titles that should not be assigned," Freeman says.
Investigators also seized hard drives, cellphones, documents and $72,000 in cash.
During the last legislative session, lawmakers approved funding and staff for the Texas Department of Motor Vehicles to establish its Compliance and Investigations Division.
Executive Director of TxDMV Whitney Brewster says the new division was integral to this case. "The TxDMV takes reports of fraud waste and abuse very seriously. It's critically important to maintain the public's trust while conducting business on behalf of the state," Brewster says.
While the satellite offices remain closed, the TxDMV is providing support to help Travis County at its main Tax Assessor Collector's Office at 5501 Airport Blvd.
A tip from the tax office: if you have a vehicle registration renewal, go online. Monday, employees in the tax office told people to anticipate anywhere from a 2-4 hour wait.
KXAN spoke with Diane Anderson, who was one of the hundreds of others waiting at the main tax office.
"It's a madhouse in there," she said, with lines out the door.
Officials say it could be like this into next week.
"There's lots of questions with government these days and how our tax money is spent and how the government's run and unfortunately this is just a mark on their record," Anderson said. "It'll be interesting to see what really shakes out from it and in the meantime, we're all going to pay the price."
Tax Assessor-Collector Bruce Elfant plans to brief the Travis County Commissioners Court at its Tuesday meeting, to provide details on the contingency plans in place and next steps moving forward.
Commissioner Jeff Travillion says he wants to know what the "core problem" is that led to this alleged fraud, so Travis County can get ahead of the issue even more in the future.
"Anytime this happens, it's disappointing. It's hurtful. But we want the public to know that it was an internal process that caught it, and we will take our time and make sure that we address the core issues so that we can maintain our trust," Travillion said.
Statewide Concerns According to the April 2018 Sunset Advisory Commission staff report for the Texas Department of Motor Vehicles, potential title fraud may be happening across the state.
Sunset staff laid out a number of examples of title fraud cases wherein they reported that "multiple tax assessor-collectors were accused of or admitted to accepting bribes to process fraudulent title applications or registration transactions."
In addition, tax assessor-collector employees allegedly voided legitimate title transactions, reprocessed them with a lower sales price and "pocketed the difference, resulting in loss of fees and sales tax revenue."
The report also notes that "Title fraud not only risks financial harm but endangers the public by allowing potentially dangerous vehicles to remain on the road."
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