January 4, 2024 • 32 mins
We're taking a break this week, here's an episode you might have missed.
Catalytic converters are a vital part of emissions reduction in gas-powered vehicles. But that’s not why they’ve been making headlines. Thieves across the US have been sawing them off cars because they contain precious metals like platinum, palladium and rhodium. Bloomberg Businessweek contributor Evan Ratliff is here to tell the tale of a $500 million catalytic converter theft ring—and how local police departments and federal law enforcement brought it down.
Read more: How Cops Cracked a $500 Million Catalytic Converter Crime Ring
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This episode was produced by: Supervising Producer: Vicki Vergolina, Senior Producer: Kathryn Fink, Producers Michael Falero and Mo Barrow. Sound Design/Engineer: Raphael Amsili.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Hi, it's Westkasova. The Big Take is taking a break
this week, so here's an episode you might have missed.
You may remember a couple of years ago there were
all these news stories in the US about people going
to start their cars and finding thieves had stolen their
(00:24):
catalytic converter. And then tons of videos popped up on
YouTube and the evening news. They showed people brazenly crawling
under cars in parking lots and sawing off catalytic converters
in broad daylight.
Speaker 2 (00:37):
These sixteen cars at Drivers Village in Cicero are now
sitting in park after two sneaky thieves stole each of
the vehicle's catalytic converters.
Speaker 3 (00:45):
Back in mat Onya, this crew was captured on camera
by the car's owner. Look at them, jack up the
car and off they go. The owner said they had
a catalytic converter in the hand.
Speaker 2 (00:55):
Turns out, unfortunately, even police vehicles are not safe from
catalytic converter thieves.
Speaker 1 (01:02):
It was happening all over the country, and it kept happening.
That made Bloomberg BusinessWeek contributor Evan Ratleff wonder was this
just an uptick in petty crime? Or was there something
more going on here? So he went to find out
the short answer, yeah, there was a lot more going
on here.
Speaker 4 (01:20):
People are bringing U hauls and trucks full of them,
and you know, they stand there and they price them out,
they pay them in cash, and then they're gone.
Speaker 1 (01:35):
I'm West Casova today on the big take, Your catalytic
converter is worth its weight in gold or platinum to
be per sixt Evan. What is a catalytic converter.
Speaker 4 (01:53):
Well, a catalytic converter is essentially a device, mechanical device.
Before your exams pipe, there's this little structure. It's like
a fat pipe connected to skinny pipes. So inside the
fat pipe there's what they call in the trade a core.
Speaker 3 (02:09):
It's usually like a.
Speaker 4 (02:10):
Ceramic core, or they call it a honeycomb core because
it sort of looks like a honeycomb from a beehive.
And inside of that there are catalysts. And what those
catalysts do is they clean the exhaust coming from your
engine before it exits the tailpipe. So it takes really
horrible gases like nitrous oxide and carbon monoxide and converts
(02:30):
them to relatively harmless gases, including carbon dioxide, which is
not harmless to the environment but in terms of smog
and ground pollution. So the catalytic converter serves this important
function and the actual catalyst the chemical reactions are catalyzed
by these three metals that are included in a catalytic converter,
(02:51):
which are roodium, palladium, and platinum. They're part of this
group called platinum group metals or PGMs. You'll hear all
the time PGMs in terms of catalytic convert and so
those metals exist in sort of trace amounts less than
a quarter ounce in inside a catalytic converter, and that
is where the value lies for someone trying to steal
a converter.
Speaker 1 (03:14):
And what's so fascinating about that is, for a lot
of years, as you say, like trace amounts of these
metal e who cares they go to the junk yard,
No one give them a second thought, or maybe scrap
metal places would take come and see what they could get.
But that changed during the pandemic.
Speaker 4 (03:29):
Right, the metal prices fluctuate on the open market, and
they're pretty rare metals, especially palladium and rodium, Platinum a
little less so, but platium and rodium are hard to mine,
their kind of byproducts of platinum mines and other minds,
so in pre pandemic times they just weren't worth all
that much.
Speaker 3 (03:47):
And then the pandemic struck, a lot of the mines.
Speaker 4 (03:50):
Were closed, particularly in South Africa, which is the predominant
place where these metals are mined, and there were also
infrastructure logistics problems, supply chain problems, so the prices shot up.
Of the metals shut up in an extraordinary way in
some cases. So as the prices started going up, it
became more and more valuable to have a catalytic converter,
(04:11):
so those prices went up correspondingly, because if you have
a used catalytic converter, you can, through a pretty complicated process,
extract the metals and sell them back to the market.
Speaker 1 (04:22):
So Evan, you said, when you first started looking into this,
it was kind of a local crime. But then you
started looking a little deeper, and that's when you found, No,
those people on the street are the beginning of this
really big long global supply chain for the metals inside
these converters.
Speaker 4 (04:40):
The place where I really discovered that this was a
much bigger story. I was actually piggybacking on the back
of an investigation that was started by the police department
in Tulsa, Oklahoma. And in Tulsa they had the same
problem they had all over the United States, which is
there were a lot more catalytic convert beginning in twenty twenty.
(05:01):
They tried to figure out what to do about it,
and within the Tulsa PD, there was one particular detective
who decided that not only should they look at the
local thefts and what they call cutters, people cutting them
off the cars, but also where did they all go,
Like where were they selling them, where was the money
coming from? And he started investigation where they ended up
(05:25):
investigating the whole supply chain of these stolen converters. And
so I sort of decided to tell the story of
how that developed.
Speaker 1 (05:34):
So your story starts at in Tulsa, Oklahoma, and it's
with a traffic stop, right like so many other stories
like this begin.
Speaker 4 (05:43):
Yeah, basically pretty routine traffic stop. Someone called in. It
was actually an off duty cops saw a pickup truck
full of catalytic converters called it in. Because after all
these thefts started happening, it became suspicious to be driving
around with a bunch of catalytic converters in the back
of the truck. It turned out there were one hundred
and twenty something in there. They pulled the truck over.
At the wheel was a guy named Tyler Curtis. And
(06:05):
Tyler Curtis's I think at the time he was maybe
twenty four twenty five.
Speaker 3 (06:09):
He had grown.
Speaker 4 (06:11):
Up in Oklahoma and he had gotten into the catalytic
converter business. And when he was pulled over, what he
said in response to why do you have all these
catalytic converters was I'm a legitimate catalytic converter dealer. I'm
a scrap metal dealer. And they didn't actually charge him
with the catalytic converters. He happened to also have a
small amount of drugs in his car and an unlicensed gun,
(06:32):
so they charged him with that, but they didn't charge
him with the catalytic converters. That traffic stop was sort
of the beginning of tracing this whole network because of
what they found out about Tyler Curtis.
Speaker 1 (06:43):
Next, and so Curtis really did have this business.
Speaker 4 (06:47):
Yeah, And that's one of the tricky things about this
whole industry was that Tyler Curtis had actually worked. He
had learned about the business at a legitimate scrap metal
recycling catalytic converter recycling outfit outside of Tulsa, and that's
where he learned the business. And then he said, wow,
this business is booming. He started his own business. But
the question with catalytic converters is how much due diligence
(07:09):
are you doing when people show up with these catalytic converters.
And if someone shows up with the truckload, then if
they don't have paperwork, they don't show where they came from,
you might be buying stolen converters. Now, what the authorities
allege was that Tyler Curtis and the people up the
chain from him, they really leaned into buying from anyone,
no matter how sketchy, even encouraging people to bring stolen
(07:33):
catalytic converters. That's the allegation. But it's very difficult to
tell if you just look at the catalytic converters where
they came from.
Speaker 1 (07:44):
Yeah, let's talk about that for a minute, because we
talked about how you get underneath the caring and take
this thing off, but how do you take off a
catalytic converter if you're going to steal one.
Speaker 4 (07:53):
Usually if they're going to steal one, they will pull
up to a parking lot driveway.
Speaker 3 (07:57):
Someone will hop out.
Speaker 4 (07:58):
They'll have a jack, like a hydraulic jack, or at
least a floor jack. They'll jack up the car really quickly,
crawl underneath, take out what's called a sawzle, which is
a reticular saw. It's a handheld battery powered saw, and
they'll saw the pipe on either end of the converter
and then they'll pull it out. They can do it
in a couple minutes, throw in the back of the car,
drive off.
Speaker 3 (08:18):
That's the standard theft.
Speaker 4 (08:20):
But once you have it off the car, there's actually
no indication where it came from. You cannot look at
a catalytic converter and say it came from this specific car.
Speaker 3 (08:29):
You can say the make and model.
Speaker 4 (08:31):
They have a parts number essentially that you can use
to figure out, oh, this was from a Toyota Tundra,
this was from a Toyota Prius.
Speaker 1 (08:38):
There's not only a VIN number on the converter.
Speaker 3 (08:41):
There's not They don't come with that. So that means
if you have a.
Speaker 4 (08:45):
Whole box full or truck full or warehouse full of
catalytic converters. Someone can't go through them and say, oh,
these are stolen in these aren't now. A lot of
cops will say I can tell because they're rough cut,
which means they look like they were cut with a
saw instead of unbolted from the car. But the reality
is a lot of junk yards where they legitimately cut
(09:05):
them off.
Speaker 3 (09:06):
They also use sazzles.
Speaker 4 (09:07):
They might cut it a little more carefully, but it's
very difficult to sort of take someone in a serious
case in front of a court and use like the
saw mark as the evidence that you're using to try
to put them away, right, because if it's in.
Speaker 1 (09:20):
A junkyard and the car is junked anyway, and you
legitimately want to get the kind of a converter, why
would you take time to carefully unbolt the thing. Just
take it off.
Speaker 4 (09:28):
Yeah, all they're going to do is recycle it. They're
going to crush it and take the inner core dust out,
and that's going to be smelted and eventually refined back
into the metals.
Speaker 3 (09:39):
So it doesn't matter how you cut it.
Speaker 4 (09:41):
And not only is that a legitimate business, it's an
important business, like the recycling of these metals is actually
very important, and I think a quarter of all PGMs
are actually recycled, and it should be more.
Speaker 3 (09:53):
And so you have this strange mixture of this.
Speaker 4 (09:56):
Legitimacy and then the illegal side of it, kind of
infiltrating into a legitimate business.
Speaker 1 (10:03):
And that's exactly what drew you to Tyler Curtis. He's
running this business and the converters he's getting are probably
coming from all kinds of places, but the cops are
really suspicious, and so they decide, all right, we're going
to put our eyes on this guy.
Speaker 3 (10:18):
Yeah.
Speaker 4 (10:18):
I mean they get suspicious of Tyler Curtis in part
because they started arresting a lot of cutters street cutters,
people who they catch cutting them off cars. And some
of those people lead them to another intermediate buyer. They're
selling to a guy, and that guy shows up at
Tyler Curtis's place. So they put a GPS on this
guy's car, and he shows up at Tyler Curtis's place
and they say, well, maybe Tyler Curtis is bigger than
(10:40):
we thought.
Speaker 3 (10:41):
They get a warrant for his iPhone and iPad.
Speaker 4 (10:44):
And then they discover oh, he's got links to some
larger network allegedly, and then they get a warrant for
what's called a pole camera, which is like it sounds
a camera that you put on a pole, but surreptitiously,
so probably like a utility guy goes out and climbs
a pole, puts it outside of his place, and then
they're watching his facility twenty four hours a day, and
(11:07):
they start to see.
Speaker 3 (11:08):
The volume that are coming in.
Speaker 4 (11:11):
Pickup trucks pulling up, U haul's pulling up, people with
trailers attached pulling up, and they've got fifty one hundred
two hundred converters in the back and he's pricing them,
or someone he works for him is pricing them. They're
paying them in cash, and they eventually calculate that he's
handling five thousand to six thousand converters per week.
Speaker 3 (11:32):
So that's just people showing up pretty much all the.
Speaker 4 (11:35):
Time with loads of converters. So he's really running a
booming business. There's millions of dollars coming through. And the
crazy thing is that all of it is in cash,
Like they're really operating in cash. It's a cash business.
And so now that's not all profit he's not making
millions of dollars of profit, but he's in the seven
to eight figures range in terms of what he's doing
(11:57):
over the course of less than a year. So that's
a lot of cash that you need to be dealing
with and have around all the time.
Speaker 1 (12:06):
So Tulsa is in a very big place. These converters
have to be coming from all over the place.
Speaker 4 (12:11):
Then, yeah, they quickly discover that they're coming from all
over the Southwest. They're coming from Texas, they're coming from Oklahoma, obviously,
but they're coming from the Midwest, like some from California.
Like they're driving in. People are bringing U hauls and
trucks full of them, and you know, they stand there
and they price them out, they pay them in cash,
and then they're gone. So then it creates this additional question, well,
(12:35):
where's all this.
Speaker 3 (12:35):
Cash coming from?
Speaker 4 (12:37):
And one of the things they discover is that they're
packaging them up in these boxes and then shipping them
to New Jersey.
Speaker 1 (12:45):
After the break, what happened to those catalytic converters in
New Jersey? Evan, So the cops are now tracing up
the chain. I think the phrase you use in the
pieces that they wanted to kind of get the head
(13:05):
of the snake.
Speaker 4 (13:07):
Yeah, that's what the detective in Tulsa PD, whose name,
by the way is Kansas Core, which is an incredible
name for someone who's investigating catalytic converter theft, where the
prize thing that you're getting is the core and everyone
calls it the core in the business. So Kansas Corps
was the person who really spearheaded the investigation out of
Tulsa PD. He was the person who essentially said, like,
(13:30):
we can get to the top, and yeah, his superior
told me, we want to cut the head off the snake.
Speaker 1 (13:36):
So Kansas Core traces these catalytic converters from Tulsa to
New Jersey and what do they find there?
Speaker 3 (13:45):
In New Jersey?
Speaker 4 (13:45):
They found this company called DJ Auto, which was operated
by a pair of brothers. The older one, his name
is Lovin Kanna. Lovin's sort of his nickname, everyone calls him.
And the two of them had been in the scrap
metal business for a lot long time, you know, recycling
all kinds of things, batteries, air conditioners, that sort of thing,
and they shifted into entirely dealing with catalytic converters in
(14:10):
twenty twenty when the prices went up and it was
clear that this was a huge business. And then pretty
quickly they started receiving converters from all around the country.
So they figured out how to sort of network with
regional players like a Tyler Curtis, who would sort of
gather up all the local catalytic converters, put them in
(14:30):
a box, ship a bunch of palettes of those catalytic
converters to them in New Jersey, and then they would
take it the next step. They built a significant business,
not just selling the converters, but also this app that
they launched where you could price catalytic converters. So one
of the hard things about legitimate or illegitimate business in
catalytic converters is that the metal prices fluctuate, so by
(14:53):
the time you go to sell it, the price may
be different than when you either obtained it legally or
stole it, and so on their app, you could actually
check the prices day by day. You could even lock
in prices, so you could say I want to lock
in this many converters at this price. It's called hedging,
so if the price goes down, then you're good and
you're not going to lose your shirt over whatever lot
(15:15):
you have of catalytic converters. So they were sophisticated operation.
And they also were just making money hand over fist.
I mean, this is where the money gets really big.
We're talking five hundred and forty five million dollars alleged
by the Justice Department over the course of essentially less
than three years.
Speaker 3 (15:33):
Again in revenue.
Speaker 4 (15:34):
That's not their profits, but that's the amount of cash
that was passing through this business.
Speaker 1 (15:41):
And so they were getting these converters from all over,
like when Kansas Core is talking about trying to trace
up the line. So you have these guys who are
either selling them legitimately from junk yards or other places.
We're chopping them off cars and then selling them to
another person and then selling them to an intermediary like
(16:02):
Tyler Curtis and Tulsa, And there are Tyler Curtises all
over the place, and then they're all funneling to New Jersey.
Speaker 4 (16:11):
Yeah, So the Conna Brothers had and Digiato, they had
a facility. I went there and I interviewed some of
the other people that worked next to it, and they
said they were just coming in twenty four hours a day,
like we're talking to tractor trailers full of catalytic converters.
And also they were getting shipments through major freight companies,
so they're getting pallettes and palettes of these. Eventually they
(16:32):
bought a junk yard, which was a larger place for
them to receive the catalytic converters. And also a junk
yard is sort of a natural place where you would
also get legal catalytic converters, so I think the authorities
would allege that they did that kind of as a cover,
but it's a great place to receive catalytic converters. So
they had these facilities, they would receive them from all
around the country, and then they take them to the
(16:52):
next step, which is they have in the end four
decanning machines, which are essentially things that you take the
catalytic converter and you stick it in there and it's
like a guillotine and it slices it open and then
it crushes it and all the dust from the ceramic
core falls into a box. So then you have what's
called catalytic converter dust, which is the metals are in there.
They're amidst that dust. In fact, they have a special
(17:14):
vacuum that vacuums up the dust that kind of drifts
into the air. Because that dust that just drifts off
of it is also valuable.
Speaker 3 (17:21):
You need to collect it all. So they had four
of these machines.
Speaker 4 (17:24):
They're running them all the time, and they're taking all
these converters and they're putting them in boxes and they're
sending them on to a refiner based in New Jersey.
So that's where the process kind of like moves on
to its next step. And these guys were really I mean,
they were really living the high life.
Speaker 3 (17:40):
You know.
Speaker 4 (17:40):
They bought Ferrari McLaren, you know, the highest end cars
for hundreds.
Speaker 3 (17:46):
Of thousands of dollars.
Speaker 4 (17:47):
They bought a big house in New Jersey on a
big plot of land, and they were basically scrap metal
dealers made good, you know, they were at the top
of the industry.
Speaker 1 (17:58):
With Gigi Audo. The cops who are pursuing this case
have the same kind of question as they do with
Tyler Curtis back in Tulsa, which is, how do you
tell whether this is a legit operation? How are you
able to tell where a crime may have been committed?
So how do they start to zero in on their case.
Speaker 4 (18:21):
The complicated question for the cops here is they have
some intuition that these people are dealing in stolen Caldic.
Speaker 3 (18:28):
Converters, but you have to be able to prove it.
Speaker 4 (18:30):
And first of all, you have to prove that a
certain number of them are stolen, and then you have
to be able to prove that they knew they were stolen.
Both of those things have to be true if you're
going to win the case or get indictments. Even so,
proving that there were stolen converters in there involved essentially
tracking who showed up at different places, and then they
(18:50):
combine that with sending confidential informants in to sell to
these places, and the confidential informance would often come in
and tell some story about how I picked these up
off a guy who he was chased by the cops
and then he hit him in the woods and then
he got him back out, you know, elaborate story about
how sketchy they were, in order to establish a sort
of trail of evidence that they were buying catalytic converters
(19:14):
that they knew had a sketchy origin or knew were
explicitly illegal.
Speaker 3 (19:18):
You know, they were stolen out of a warehouse, so
that sort of thing.
Speaker 1 (19:21):
So they sent these guys in there, and did they
buy from them?
Speaker 3 (19:25):
They did.
Speaker 4 (19:26):
It's hard to tell if there were more cases, and
I'm sure if it goes to trial, the defense might
offer more cases where they might have rejected that. It
may be the case that they sent in a bunch
and they rejected them and they.
Speaker 3 (19:36):
Said, oh, I don't want to buy those.
Speaker 4 (19:38):
But they certainly were able to document cases where people
came in trying to sell sketchy converters and they bought
them all gleefully, according to the indictments.
Speaker 1 (19:51):
So Evan, how did this ultimately all unravel Well.
Speaker 4 (19:56):
The investigation became extremely sprawling, involved the Department of Homeland Security,
It involved police departments all over the United States.
Speaker 3 (20:05):
The investigation became.
Speaker 4 (20:07):
So large, so unwieldy that all of these different organizations,
these police departments and the FEDS and everyone else, the
important players, had to get together in Philadelphia for three
days to sort of plot the end game of how
they were going to take these places down, because they
had locations all over the country to sort of pick
and choose from, and they wanted to do them all simultaneously,
(20:29):
so they came up with a code name, because cops
loved to come up with a code name.
Speaker 3 (20:33):
They called it Operation Heavy Metal, and.
Speaker 4 (20:35):
They picked a day in early November of twenty twenty
two when they were going to take everybody down at
the same time. The day came and I interviewed actually
the next door neighbor to Tyler Curtis's business, and he
had actually rented the warehouse to Tyler Curtis and believed
from all outward appearances it's a completely legitimate business. And
(20:57):
he was sort of described that morning in November where
he was getting a coffee and he just looked out
his window and there was a tank outside and there
were like shooters on their roof next door, and he
was sort of like, what is going on? And he thought, oh,
this guy rerounded the warehouse who must be dealing with
drugs and weapons or something. And then he sort of
(21:18):
went out and talked to the cops and they told
him it was catalytic converters, and he said, well, I
don't know, it seems like a little overkill with the
swat teams that they brought, but they did that all
over the country. They brought in sort of their heaviest tools.
They raided the warehouse in Tulsa. They also in Nevada,
in Wisconsin, they did a rate of Virginia. They did
(21:39):
multiple raids in New Jersey for the Kanas, So that
included their facility and also their home where they had
all the fancy cars and their six car garage. This
Ferrari is one of several luxury car seas from this
one point seven million dollar home. Wednesday, it's where federal
agents say DG Auto LLC is based.
Speaker 3 (21:56):
You're in Oklahoma.
Speaker 2 (21:57):
All raid took place at a facility and Whyner County
this morning.
Speaker 3 (22:01):
Analytic converter theft ring.
Speaker 1 (22:03):
This might be happening in your neighborhood, it's happening all
around the country.
Speaker 2 (22:06):
One of these defendants is actually has an Instagram account
with a picture wearing a necklace with a catalytic converter
on it. So big money here, big arrests, a big
case by the Department of.
Speaker 3 (22:17):
Justice around the country.
Speaker 4 (22:18):
They arrested twenty one different people connected to the alleged
network and the allegations are basically like interstate stolen property
and money laundering.
Speaker 1 (22:33):
And so they took Tyler Curtis into custody.
Speaker 3 (22:37):
They took Tyler Curtis into custody.
Speaker 4 (22:38):
Actually he had pulled out right when they came with
their raid, and then he came back maybe to see
what was going on. They arrested everybody without incident, and
then Tyler Curtis was Actually he couldn't even get out
on bail for a good five months after they had
him in, and the Connas to this moment have not
gotten out on bail. They're actually still in jail, winning trial.
Speaker 1 (22:58):
Tyler Curtis was in custody but made bail and is
now out awaiting trial. What does he have to say
about his case?
Speaker 4 (23:05):
Well, he's pleaded not guilty, and I spoke to him briefly.
He seemed eager to talk about what had happened. I
think he does have a defense that he could put
on here.
Speaker 3 (23:17):
But then when he came back.
Speaker 4 (23:19):
He said that he'd consulted with his lawyer and he
had to wait till the case was resolved before we
could actually talk.
Speaker 1 (23:25):
What do Tyler Curtis's lawyers say about their client.
Speaker 3 (23:29):
His lawyer declined to speak on his behalf.
Speaker 1 (23:33):
And what about the Khana brothers, what do they say
about the charges against them.
Speaker 4 (23:38):
The Kanna brothers both have pleaded not guilty in California
to the federal charges against them. Love and Kanna's attorney
emphasize that he is innocent until proven guilty, of course,
that applies to both of them, and that he has
the support of the community. It's worth making sure everyone
understands that everyone involved here is not guilty until proven otherwise.
Speaker 1 (24:02):
I'm curious. You have so many details about what was
going on inside the investigation and what they knew. How
do you know all this stuff?
Speaker 4 (24:11):
Well, some of what I know comes from the indictments,
so the indictments are pretty detailed. But then in looking
for court documents around the case, I sort of happened
upon the reality that a number of search warrant affidavits
and seizure affidavits which are filed with federal judges, were
(24:32):
available through the Federal Court Document system which called PACER.
They were not sealed, and typically in cases like this
they would be sealed. And then I also spent time
on the ground in Tulsa just interviewing people and talking
to people about what Tyler Curtis's business was like and
even the Tulsa PD like what they sort of went
through in trying to figure.
Speaker 1 (24:52):
It out when we come back where all that dust
ends up. So after the police had moved in and
rounded up all these people, then the question became, where
did all that dust that contained these precious metals go,
(25:15):
that generated all that cash that was able to pay
for these converters all the way down the line, and
that's where the next step of your story went up.
Speaker 4 (25:25):
From DG, there's another organization and that organization is in
the court tak position is called a refiner in Burlington,
New Jersey, and it's actually a company called Doa that's
based in Japan, and they were buying the dust that
was being sold by DG, and their expertise is taking
(25:46):
that dust, shipping it to Japan where they have facilities
that smelt and then refine that dust back into pgm's
platinum group metals, which they then sell to the market.
So they're ultimately where all the science lives. That's where
they really can take the inside of a catalytic converter
and turn it back into the thing that's valuable. And
(26:08):
again that is an important business because the recycling business
depends on smelters and refiners being able to get the
metals out. Now, in this case, DOA was buying from DG.
I mean they were buying also some catalytic converters too,
but they were buying all this dust.
Speaker 3 (26:25):
And if you think about the dust, the.
Speaker 4 (26:27):
Dust is so far from the catalytic converter that was
on the car in terms of what you could do,
like you literally could not possibly trace this dust back
to where it came from.
Speaker 3 (26:35):
It's dust. And that company is not indicted in this case.
Speaker 1 (26:41):
And we should also say that company is not accused
of any wrongdoing. Its name was redacted in the indictments
and prosecutors refer to it only as an unindicted co conspirator.
Speaker 4 (26:54):
Now, I went down to the company to see what
was going on there.
Speaker 3 (26:58):
I talked to and assistant purchasing manager there.
Speaker 4 (27:01):
He didn't really want to talk about the business, and
he didn't really want to talk about stolen catalytic converters,
and he said we would talk more later, and then
he sent me to the press liaison, who then never
responded to any of my requests. But people in the
recycling business, refiners, everybody has this problem, which is that
if you get a box of dust that's catalytic converter dust.
(27:23):
There's a pretty good chance that's somewhere in there fractionally
there's a stolen converter that is part of that dust,
But how could you possibly figure out where it came from,
which one it was. And so that's where the challenge
of sort of trying to pull apart the illegal business
that's infiltrated illegal business, trying to pull it back out
becomes incredibly challenging the further up the chain you go.
Speaker 1 (27:46):
So Tyler Curtis and DG Mike claim, well, we didn't
do anything wrong, we were just buying a legal product
on the market. Does that argument actually hold any weight?
Speaker 4 (27:57):
Well, I think there are people in the industry who
say they're just being made an example of because this
is such a huge problem and they were dealing with
it the way everyone else was dealing with it. They
were buying a ton of converters. Yes, But also I
had one person tell me if you look at the
number of stolen catalytic converters, which is anywhere from the
(28:18):
low end, like sixty five thousand a year to up
to one hundred and fifty thousand a year in the
United States, and you kind of.
Speaker 3 (28:25):
Run the math on.
Speaker 4 (28:27):
Even if they had a majority of those that were
running through let's say DG Auto, it's still not most
of their business, like most of their business was still legal.
And so the question becomes, how many illegal converters infiltrating
your business turns you into a criminal? And I think
the law is not really set up to try and
(28:49):
confront that. And the industry is also struggling with that
because people in the legitimate catalytic converter recycling industry, they
also want this problem dealt with.
Speaker 3 (28:59):
They don't want to feel like criminals. You know.
Speaker 4 (29:01):
Some of them said, I don't even tell people what
I do anymore because people think that I'm connected with
this thing that got stolen off.
Speaker 3 (29:07):
Their car in their driveway and they hate me.
Speaker 4 (29:10):
And so the legal recyclers are also looking for a
way to kind of get this out of the supply
chain stream, but it's extremely difficult to do. It's a
very strange criminal circumstance.
Speaker 1 (29:23):
So after this dust goes to the refiner and is
turned back into metals, what happens to those metals?
Speaker 3 (29:33):
They make more catalytic converters.
Speaker 4 (29:35):
That's the primary use of the metals going back into
brand new catalytic converters, which was one of the things
that really just stuck with me in the story that
if your catalytic converter gets stolen from your driveway, you
get a new one. There's some chance the actual PGMs
in your catalytic converter came from a stolen catalytic converter.
(29:56):
They go back on the market in a totally legitimate
market and no one knows where they came from.
Speaker 1 (30:01):
Kevin, what is the answer here? You said that legitimate
catalytic converter recyclers want the shady side of the business
to be shut down. But is there an answer to
fixing this problem.
Speaker 3 (30:15):
There's not a great answer.
Speaker 4 (30:16):
First of all, the answers are often state by state,
so states come up with things like people can get
their catalytic converters etched with a serial number so it
is actually traceable to your car.
Speaker 3 (30:26):
If it gets.
Speaker 4 (30:26):
Stolen, you can bolt it on better. There's kind of
a cover that you can put over it.
Speaker 3 (30:31):
But then in terms of the.
Speaker 4 (30:33):
Law, you know, they always kind of fall back on
changing catalytic converter theft from a misdemeanor to a felony,
or making sure that you have to have a certain
kind of paperwork. If you possess a catalytic converter, you
have to be able to say what car did it
come from? And you have to have a license to
possess catalytic converters. But that requires all the way up
the chain people keeping track of the paperwork in a
(30:55):
business that when you're dealing with junk yards muffler shops,
it is kind of tough to do, especially if the
laws are different for every state. Because some of the
dealers work across many states, and one told me something
that I do in one state I can get arrested
for in another state.
Speaker 1 (31:11):
I guess if you look way way down the road,
electric cars don't need catalytic converters.
Speaker 3 (31:17):
That's the answer.
Speaker 4 (31:18):
As long as electric cars continue their rise, maybe that'll
solve the problem, although in the meantime the problem arguably
gets worse because the higher admission standards you have, the
higher concentration of PGMs you have in.
Speaker 3 (31:32):
The catalytic converters.
Speaker 4 (31:33):
So as the United States and other countries institute these
emission standards higher and high and hire, the catalytic converters
become worth more, so you might have a short term
problem and a long term solution.
Speaker 1 (31:46):
Evan right left, Thanks so much for coming on the show.
Speaker 3 (31:49):
Thank you really enjoyed it.
Speaker 1 (31:53):
Thanks for listening to us here at The Big Take.
It's a daily podcast from Bloomberg and iHeartRadio. For more
shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or
wherever you listen, and we'd love to hear from you.
Email us questions or comments to Big Take at Bloomberg
dot net. The supervising producer of the Big Take is
Vicky Virgalina. Our senior producer is Catherine Fink. Our producers
(32:16):
are Michael Falero and Moberrow ruffelm Sely is our engineer,
with additional production support from Abrea Ruffin. Our original music
was composed by Leo Sidrin. I'm west Kasova. We'll be
back tomorrow with another Big Take.
Hi, it's Westkasova. The Big Take is taking a break
this week, so here's an episode you might have missed.
You may remember a couple of years ago there were
all these news stories in the US about people going
to start their cars and finding thieves had stolen their
(00:24):
catalytic converter. And then tons of videos popped up on
YouTube and the evening news. They showed people brazenly crawling
under cars in parking lots and sawing off catalytic converters
in broad daylight.
Speaker 2 (00:37):
These sixteen cars at Drivers Village in Cicero are now
sitting in park after two sneaky thieves stole each of
the vehicle's catalytic converters.
Speaker 3 (00:45):
Back in mat Onya, this crew was captured on camera
by the car's owner. Look at them, jack up the
car and off they go. The owner said they had
a catalytic converter in the hand.
Speaker 2 (00:55):
Turns out, unfortunately, even police vehicles are not safe from
catalytic converter thieves.
Speaker 1 (01:02):
It was happening all over the country, and it kept happening.
That made Bloomberg BusinessWeek contributor Evan Ratleff wonder was this
just an uptick in petty crime? Or was there something
more going on here? So he went to find out
the short answer, yeah, there was a lot more going
on here.
Speaker 4 (01:20):
People are bringing U hauls and trucks full of them,
and you know, they stand there and they price them out,
they pay them in cash, and then they're gone.
Speaker 1 (01:35):
I'm West Casova today on the big take, Your catalytic
converter is worth its weight in gold or platinum to
be per sixt Evan. What is a catalytic converter.
Speaker 4 (01:53):
Well, a catalytic converter is essentially a device, mechanical device.
Before your exams pipe, there's this little structure. It's like
a fat pipe connected to skinny pipes. So inside the
fat pipe there's what they call in the trade a core.
Speaker 3 (02:09):
It's usually like a.
Speaker 4 (02:10):
Ceramic core, or they call it a honeycomb core because
it sort of looks like a honeycomb from a beehive.
And inside of that there are catalysts. And what those
catalysts do is they clean the exhaust coming from your
engine before it exits the tailpipe. So it takes really
horrible gases like nitrous oxide and carbon monoxide and converts
(02:30):
them to relatively harmless gases, including carbon dioxide, which is
not harmless to the environment but in terms of smog
and ground pollution. So the catalytic converter serves this important
function and the actual catalyst the chemical reactions are catalyzed
by these three metals that are included in a catalytic converter,
(02:51):
which are roodium, palladium, and platinum. They're part of this
group called platinum group metals or PGMs. You'll hear all
the time PGMs in terms of catalytic convert and so
those metals exist in sort of trace amounts less than
a quarter ounce in inside a catalytic converter, and that
is where the value lies for someone trying to steal
a converter.
Speaker 1 (03:14):
And what's so fascinating about that is, for a lot
of years, as you say, like trace amounts of these
metal e who cares they go to the junk yard,
No one give them a second thought, or maybe scrap
metal places would take come and see what they could get.
But that changed during the pandemic.
Speaker 4 (03:29):
Right, the metal prices fluctuate on the open market, and
they're pretty rare metals, especially palladium and rodium, Platinum a
little less so, but platium and rodium are hard to mine,
their kind of byproducts of platinum mines and other minds,
so in pre pandemic times they just weren't worth all
that much.
Speaker 3 (03:47):
And then the pandemic struck, a lot of the mines.
Speaker 4 (03:50):
Were closed, particularly in South Africa, which is the predominant
place where these metals are mined, and there were also
infrastructure logistics problems, supply chain problems, so the prices shot up.
Of the metals shut up in an extraordinary way in
some cases. So as the prices started going up, it
became more and more valuable to have a catalytic converter,
(04:11):
so those prices went up correspondingly, because if you have
a used catalytic converter, you can, through a pretty complicated process,
extract the metals and sell them back to the market.
Speaker 1 (04:22):
So Evan, you said, when you first started looking into this,
it was kind of a local crime. But then you
started looking a little deeper, and that's when you found, No,
those people on the street are the beginning of this
really big long global supply chain for the metals inside
these converters.
Speaker 4 (04:40):
The place where I really discovered that this was a
much bigger story. I was actually piggybacking on the back
of an investigation that was started by the police department
in Tulsa, Oklahoma. And in Tulsa they had the same
problem they had all over the United States, which is
there were a lot more catalytic convert beginning in twenty twenty.
(05:01):
They tried to figure out what to do about it,
and within the Tulsa PD, there was one particular detective
who decided that not only should they look at the
local thefts and what they call cutters, people cutting them
off the cars, but also where did they all go,
Like where were they selling them, where was the money
coming from? And he started investigation where they ended up
(05:25):
investigating the whole supply chain of these stolen converters. And
so I sort of decided to tell the story of
how that developed.
Speaker 1 (05:34):
So your story starts at in Tulsa, Oklahoma, and it's
with a traffic stop, right like so many other stories
like this begin.
Speaker 4 (05:43):
Yeah, basically pretty routine traffic stop. Someone called in. It
was actually an off duty cops saw a pickup truck
full of catalytic converters called it in. Because after all
these thefts started happening, it became suspicious to be driving
around with a bunch of catalytic converters in the back
of the truck. It turned out there were one hundred
and twenty something in there. They pulled the truck over.
At the wheel was a guy named Tyler Curtis. And
(06:05):
Tyler Curtis's I think at the time he was maybe
twenty four twenty five.
Speaker 3 (06:09):
He had grown.
Speaker 4 (06:11):
Up in Oklahoma and he had gotten into the catalytic
converter business. And when he was pulled over, what he
said in response to why do you have all these
catalytic converters was I'm a legitimate catalytic converter dealer. I'm
a scrap metal dealer. And they didn't actually charge him
with the catalytic converters. He happened to also have a
small amount of drugs in his car and an unlicensed gun,
(06:32):
so they charged him with that, but they didn't charge
him with the catalytic converters. That traffic stop was sort
of the beginning of tracing this whole network because of
what they found out about Tyler Curtis.
Speaker 1 (06:43):
Next, and so Curtis really did have this business.
Speaker 4 (06:47):
Yeah, And that's one of the tricky things about this
whole industry was that Tyler Curtis had actually worked. He
had learned about the business at a legitimate scrap metal
recycling catalytic converter recycling outfit outside of Tulsa, and that's
where he learned the business. And then he said, wow,
this business is booming. He started his own business. But
the question with catalytic converters is how much due diligence
(07:09):
are you doing when people show up with these catalytic converters.
And if someone shows up with the truckload, then if
they don't have paperwork, they don't show where they came from,
you might be buying stolen converters. Now, what the authorities
allege was that Tyler Curtis and the people up the
chain from him, they really leaned into buying from anyone,
no matter how sketchy, even encouraging people to bring stolen
(07:33):
catalytic converters. That's the allegation. But it's very difficult to
tell if you just look at the catalytic converters where
they came from.
Speaker 1 (07:44):
Yeah, let's talk about that for a minute, because we
talked about how you get underneath the caring and take
this thing off, but how do you take off a
catalytic converter if you're going to steal one.
Speaker 4 (07:53):
Usually if they're going to steal one, they will pull
up to a parking lot driveway.
Speaker 3 (07:57):
Someone will hop out.
Speaker 4 (07:58):
They'll have a jack, like a hydraulic jack, or at
least a floor jack. They'll jack up the car really quickly,
crawl underneath, take out what's called a sawzle, which is
a reticular saw. It's a handheld battery powered saw, and
they'll saw the pipe on either end of the converter
and then they'll pull it out. They can do it
in a couple minutes, throw in the back of the car,
drive off.
Speaker 3 (08:18):
That's the standard theft.
Speaker 4 (08:20):
But once you have it off the car, there's actually
no indication where it came from. You cannot look at
a catalytic converter and say it came from this specific car.
Speaker 3 (08:29):
You can say the make and model.
Speaker 4 (08:31):
They have a parts number essentially that you can use
to figure out, oh, this was from a Toyota Tundra,
this was from a Toyota Prius.
Speaker 1 (08:38):
There's not only a VIN number on the converter.
Speaker 3 (08:41):
There's not They don't come with that. So that means
if you have a.
Speaker 4 (08:45):
Whole box full or truck full or warehouse full of
catalytic converters. Someone can't go through them and say, oh,
these are stolen in these aren't now. A lot of
cops will say I can tell because they're rough cut,
which means they look like they were cut with a
saw instead of unbolted from the car. But the reality
is a lot of junk yards where they legitimately cut
(09:05):
them off.
Speaker 3 (09:06):
They also use sazzles.
Speaker 4 (09:07):
They might cut it a little more carefully, but it's
very difficult to sort of take someone in a serious
case in front of a court and use like the
saw mark as the evidence that you're using to try
to put them away, right, because if it's in.
Speaker 1 (09:20):
A junkyard and the car is junked anyway, and you
legitimately want to get the kind of a converter, why
would you take time to carefully unbolt the thing. Just
take it off.
Speaker 4 (09:28):
Yeah, all they're going to do is recycle it. They're
going to crush it and take the inner core dust out,
and that's going to be smelted and eventually refined back
into the metals.
Speaker 3 (09:39):
So it doesn't matter how you cut it.
Speaker 4 (09:41):
And not only is that a legitimate business, it's an
important business, like the recycling of these metals is actually
very important, and I think a quarter of all PGMs
are actually recycled, and it should be more.
Speaker 3 (09:53):
And so you have this strange mixture of this.
Speaker 4 (09:56):
Legitimacy and then the illegal side of it, kind of
infiltrating into a legitimate business.
Speaker 1 (10:03):
And that's exactly what drew you to Tyler Curtis. He's
running this business and the converters he's getting are probably
coming from all kinds of places, but the cops are
really suspicious, and so they decide, all right, we're going
to put our eyes on this guy.
Speaker 3 (10:18):
Yeah.
Speaker 4 (10:18):
I mean they get suspicious of Tyler Curtis in part
because they started arresting a lot of cutters street cutters,
people who they catch cutting them off cars. And some
of those people lead them to another intermediate buyer. They're
selling to a guy, and that guy shows up at
Tyler Curtis's place. So they put a GPS on this
guy's car, and he shows up at Tyler Curtis's place
and they say, well, maybe Tyler Curtis is bigger than
(10:40):
we thought.
Speaker 3 (10:41):
They get a warrant for his iPhone and iPad.
Speaker 4 (10:44):
And then they discover oh, he's got links to some
larger network allegedly, and then they get a warrant for
what's called a pole camera, which is like it sounds
a camera that you put on a pole, but surreptitiously,
so probably like a utility guy goes out and climbs
a pole, puts it outside of his place, and then
they're watching his facility twenty four hours a day, and
(11:07):
they start to see.
Speaker 3 (11:08):
The volume that are coming in.
Speaker 4 (11:11):
Pickup trucks pulling up, U haul's pulling up, people with
trailers attached pulling up, and they've got fifty one hundred
two hundred converters in the back and he's pricing them,
or someone he works for him is pricing them. They're
paying them in cash, and they eventually calculate that he's
handling five thousand to six thousand converters per week.
Speaker 3 (11:32):
So that's just people showing up pretty much all the.
Speaker 4 (11:35):
Time with loads of converters. So he's really running a
booming business. There's millions of dollars coming through. And the
crazy thing is that all of it is in cash,
Like they're really operating in cash. It's a cash business.
And so now that's not all profit he's not making
millions of dollars of profit, but he's in the seven
to eight figures range in terms of what he's doing
(11:57):
over the course of less than a year. So that's
a lot of cash that you need to be dealing
with and have around all the time.
Speaker 1 (12:06):
So Tulsa is in a very big place. These converters
have to be coming from all over the place.
Speaker 4 (12:11):
Then, yeah, they quickly discover that they're coming from all
over the Southwest. They're coming from Texas, they're coming from Oklahoma, obviously,
but they're coming from the Midwest, like some from California.
Like they're driving in. People are bringing U hauls and
trucks full of them, and you know, they stand there
and they price them out, they pay them in cash,
and then they're gone. So then it creates this additional question, well,
(12:35):
where's all this.
Speaker 3 (12:35):
Cash coming from?
Speaker 4 (12:37):
And one of the things they discover is that they're
packaging them up in these boxes and then shipping them
to New Jersey.
Speaker 1 (12:45):
After the break, what happened to those catalytic converters in
New Jersey? Evan, So the cops are now tracing up
the chain. I think the phrase you use in the
pieces that they wanted to kind of get the head
(13:05):
of the snake.
Speaker 4 (13:07):
Yeah, that's what the detective in Tulsa PD, whose name,
by the way is Kansas Core, which is an incredible
name for someone who's investigating catalytic converter theft, where the
prize thing that you're getting is the core and everyone
calls it the core in the business. So Kansas Corps
was the person who really spearheaded the investigation out of
Tulsa PD. He was the person who essentially said, like,
(13:30):
we can get to the top, and yeah, his superior
told me, we want to cut the head off the snake.
Speaker 1 (13:36):
So Kansas Core traces these catalytic converters from Tulsa to
New Jersey and what do they find there?
Speaker 3 (13:45):
In New Jersey?
Speaker 4 (13:45):
They found this company called DJ Auto, which was operated
by a pair of brothers. The older one, his name
is Lovin Kanna. Lovin's sort of his nickname, everyone calls him.
And the two of them had been in the scrap
metal business for a lot long time, you know, recycling
all kinds of things, batteries, air conditioners, that sort of thing,
and they shifted into entirely dealing with catalytic converters in
(14:10):
twenty twenty when the prices went up and it was
clear that this was a huge business. And then pretty
quickly they started receiving converters from all around the country.
So they figured out how to sort of network with
regional players like a Tyler Curtis, who would sort of
gather up all the local catalytic converters, put them in
(14:30):
a box, ship a bunch of palettes of those catalytic
converters to them in New Jersey, and then they would
take it the next step. They built a significant business,
not just selling the converters, but also this app that
they launched where you could price catalytic converters. So one
of the hard things about legitimate or illegitimate business in
catalytic converters is that the metal prices fluctuate, so by
(14:53):
the time you go to sell it, the price may
be different than when you either obtained it legally or
stole it, and so on their app, you could actually
check the prices day by day. You could even lock
in prices, so you could say I want to lock
in this many converters at this price. It's called hedging,
so if the price goes down, then you're good and
you're not going to lose your shirt over whatever lot
(15:15):
you have of catalytic converters. So they were sophisticated operation.
And they also were just making money hand over fist.
I mean, this is where the money gets really big.
We're talking five hundred and forty five million dollars alleged
by the Justice Department over the course of essentially less
than three years.
Speaker 3 (15:33):
Again in revenue.
Speaker 4 (15:34):
That's not their profits, but that's the amount of cash
that was passing through this business.
Speaker 1 (15:41):
And so they were getting these converters from all over,
like when Kansas Core is talking about trying to trace
up the line. So you have these guys who are
either selling them legitimately from junk yards or other places.
We're chopping them off cars and then selling them to
another person and then selling them to an intermediary like
(16:02):
Tyler Curtis and Tulsa, And there are Tyler Curtises all
over the place, and then they're all funneling to New Jersey.
Speaker 4 (16:11):
Yeah, So the Conna Brothers had and Digiato, they had
a facility. I went there and I interviewed some of
the other people that worked next to it, and they
said they were just coming in twenty four hours a day,
like we're talking to tractor trailers full of catalytic converters.
And also they were getting shipments through major freight companies,
so they're getting pallettes and palettes of these. Eventually they
(16:32):
bought a junk yard, which was a larger place for
them to receive the catalytic converters. And also a junk
yard is sort of a natural place where you would
also get legal catalytic converters, so I think the authorities
would allege that they did that kind of as a cover,
but it's a great place to receive catalytic converters. So
they had these facilities, they would receive them from all
around the country, and then they take them to the
(16:52):
next step, which is they have in the end four
decanning machines, which are essentially things that you take the
catalytic converter and you stick it in there and it's
like a guillotine and it slices it open and then
it crushes it and all the dust from the ceramic
core falls into a box. So then you have what's
called catalytic converter dust, which is the metals are in there.
They're amidst that dust. In fact, they have a special
(17:14):
vacuum that vacuums up the dust that kind of drifts
into the air. Because that dust that just drifts off
of it is also valuable.
Speaker 3 (17:21):
You need to collect it all. So they had four
of these machines.
Speaker 4 (17:24):
They're running them all the time, and they're taking all
these converters and they're putting them in boxes and they're
sending them on to a refiner based in New Jersey.
So that's where the process kind of like moves on
to its next step. And these guys were really I mean,
they were really living the high life.
Speaker 3 (17:40):
You know.
Speaker 4 (17:40):
They bought Ferrari McLaren, you know, the highest end cars
for hundreds.
Speaker 3 (17:46):
Of thousands of dollars.
Speaker 4 (17:47):
They bought a big house in New Jersey on a
big plot of land, and they were basically scrap metal
dealers made good, you know, they were at the top
of the industry.
Speaker 1 (17:58):
With Gigi Audo. The cops who are pursuing this case
have the same kind of question as they do with
Tyler Curtis back in Tulsa, which is, how do you
tell whether this is a legit operation? How are you
able to tell where a crime may have been committed?
So how do they start to zero in on their case.
Speaker 4 (18:21):
The complicated question for the cops here is they have
some intuition that these people are dealing in stolen Caldic.
Speaker 3 (18:28):
Converters, but you have to be able to prove it.
Speaker 4 (18:30):
And first of all, you have to prove that a
certain number of them are stolen, and then you have
to be able to prove that they knew they were stolen.
Both of those things have to be true if you're
going to win the case or get indictments. Even so,
proving that there were stolen converters in there involved essentially
tracking who showed up at different places, and then they
(18:50):
combine that with sending confidential informants in to sell to
these places, and the confidential informance would often come in
and tell some story about how I picked these up
off a guy who he was chased by the cops
and then he hit him in the woods and then
he got him back out, you know, elaborate story about
how sketchy they were, in order to establish a sort
of trail of evidence that they were buying catalytic converters
(19:14):
that they knew had a sketchy origin or knew were
explicitly illegal.
Speaker 3 (19:18):
You know, they were stolen out of a warehouse, so
that sort of thing.
Speaker 1 (19:21):
So they sent these guys in there, and did they
buy from them?
Speaker 3 (19:25):
They did.
Speaker 4 (19:26):
It's hard to tell if there were more cases, and
I'm sure if it goes to trial, the defense might
offer more cases where they might have rejected that. It
may be the case that they sent in a bunch
and they rejected them and they.
Speaker 3 (19:36):
Said, oh, I don't want to buy those.
Speaker 4 (19:38):
But they certainly were able to document cases where people
came in trying to sell sketchy converters and they bought
them all gleefully, according to the indictments.
Speaker 1 (19:51):
So Evan, how did this ultimately all unravel Well.
Speaker 4 (19:56):
The investigation became extremely sprawling, involved the Department of Homeland Security,
It involved police departments all over the United States.
Speaker 3 (20:05):
The investigation became.
Speaker 4 (20:07):
So large, so unwieldy that all of these different organizations,
these police departments and the FEDS and everyone else, the
important players, had to get together in Philadelphia for three
days to sort of plot the end game of how
they were going to take these places down, because they
had locations all over the country to sort of pick
and choose from, and they wanted to do them all simultaneously,
(20:29):
so they came up with a code name, because cops
loved to come up with a code name.
Speaker 3 (20:33):
They called it Operation Heavy Metal, and.
Speaker 4 (20:35):
They picked a day in early November of twenty twenty
two when they were going to take everybody down at
the same time. The day came and I interviewed actually
the next door neighbor to Tyler Curtis's business, and he
had actually rented the warehouse to Tyler Curtis and believed
from all outward appearances it's a completely legitimate business. And
(20:57):
he was sort of described that morning in November where
he was getting a coffee and he just looked out
his window and there was a tank outside and there
were like shooters on their roof next door, and he
was sort of like, what is going on? And he thought, oh,
this guy rerounded the warehouse who must be dealing with
drugs and weapons or something. And then he sort of
(21:18):
went out and talked to the cops and they told
him it was catalytic converters, and he said, well, I
don't know, it seems like a little overkill with the
swat teams that they brought, but they did that all
over the country. They brought in sort of their heaviest tools.
They raided the warehouse in Tulsa. They also in Nevada,
in Wisconsin, they did a rate of Virginia. They did
(21:39):
multiple raids in New Jersey for the Kanas, So that
included their facility and also their home where they had
all the fancy cars and their six car garage. This
Ferrari is one of several luxury car seas from this
one point seven million dollar home. Wednesday, it's where federal
agents say DG Auto LLC is based.
Speaker 3 (21:56):
You're in Oklahoma.
Speaker 2 (21:57):
All raid took place at a facility and Whyner County
this morning.
Speaker 3 (22:01):
Analytic converter theft ring.
Speaker 1 (22:03):
This might be happening in your neighborhood, it's happening all
around the country.
Speaker 2 (22:06):
One of these defendants is actually has an Instagram account
with a picture wearing a necklace with a catalytic converter
on it. So big money here, big arrests, a big
case by the Department of.
Speaker 3 (22:17):
Justice around the country.
Speaker 4 (22:18):
They arrested twenty one different people connected to the alleged
network and the allegations are basically like interstate stolen property
and money laundering.
Speaker 1 (22:33):
And so they took Tyler Curtis into custody.
Speaker 3 (22:37):
They took Tyler Curtis into custody.
Speaker 4 (22:38):
Actually he had pulled out right when they came with
their raid, and then he came back maybe to see
what was going on. They arrested everybody without incident, and
then Tyler Curtis was Actually he couldn't even get out
on bail for a good five months after they had
him in, and the Connas to this moment have not
gotten out on bail. They're actually still in jail, winning trial.
Speaker 1 (22:58):
Tyler Curtis was in custody but made bail and is
now out awaiting trial. What does he have to say
about his case?
Speaker 4 (23:05):
Well, he's pleaded not guilty, and I spoke to him briefly.
He seemed eager to talk about what had happened. I
think he does have a defense that he could put
on here.
Speaker 3 (23:17):
But then when he came back.
Speaker 4 (23:19):
He said that he'd consulted with his lawyer and he
had to wait till the case was resolved before we
could actually talk.
Speaker 1 (23:25):
What do Tyler Curtis's lawyers say about their client.
Speaker 3 (23:29):
His lawyer declined to speak on his behalf.
Speaker 1 (23:33):
And what about the Khana brothers, what do they say
about the charges against them.
Speaker 4 (23:38):
The Kanna brothers both have pleaded not guilty in California
to the federal charges against them. Love and Kanna's attorney
emphasize that he is innocent until proven guilty, of course,
that applies to both of them, and that he has
the support of the community. It's worth making sure everyone
understands that everyone involved here is not guilty until proven otherwise.
Speaker 1 (24:02):
I'm curious. You have so many details about what was
going on inside the investigation and what they knew. How
do you know all this stuff?
Speaker 4 (24:11):
Well, some of what I know comes from the indictments,
so the indictments are pretty detailed. But then in looking
for court documents around the case, I sort of happened
upon the reality that a number of search warrant affidavits
and seizure affidavits which are filed with federal judges, were
(24:32):
available through the Federal Court Document system which called PACER.
They were not sealed, and typically in cases like this
they would be sealed. And then I also spent time
on the ground in Tulsa just interviewing people and talking
to people about what Tyler Curtis's business was like and
even the Tulsa PD like what they sort of went
through in trying to figure.
Speaker 1 (24:52):
It out when we come back where all that dust
ends up. So after the police had moved in and
rounded up all these people, then the question became, where
did all that dust that contained these precious metals go,
(25:15):
that generated all that cash that was able to pay
for these converters all the way down the line, and
that's where the next step of your story went up.
Speaker 4 (25:25):
From DG, there's another organization and that organization is in
the court tak position is called a refiner in Burlington,
New Jersey, and it's actually a company called Doa that's
based in Japan, and they were buying the dust that
was being sold by DG, and their expertise is taking
(25:46):
that dust, shipping it to Japan where they have facilities
that smelt and then refine that dust back into pgm's
platinum group metals, which they then sell to the market.
So they're ultimately where all the science lives. That's where
they really can take the inside of a catalytic converter
and turn it back into the thing that's valuable. And
(26:08):
again that is an important business because the recycling business
depends on smelters and refiners being able to get the
metals out. Now, in this case, DOA was buying from DG.
I mean they were buying also some catalytic converters too,
but they were buying all this dust.
Speaker 3 (26:25):
And if you think about the dust, the.
Speaker 4 (26:27):
Dust is so far from the catalytic converter that was
on the car in terms of what you could do,
like you literally could not possibly trace this dust back
to where it came from.
Speaker 3 (26:35):
It's dust. And that company is not indicted in this case.
Speaker 1 (26:41):
And we should also say that company is not accused
of any wrongdoing. Its name was redacted in the indictments
and prosecutors refer to it only as an unindicted co conspirator.
Speaker 4 (26:54):
Now, I went down to the company to see what
was going on there.
Speaker 3 (26:58):
I talked to and assistant purchasing manager there.
Speaker 4 (27:01):
He didn't really want to talk about the business, and
he didn't really want to talk about stolen catalytic converters,
and he said we would talk more later, and then
he sent me to the press liaison, who then never
responded to any of my requests. But people in the
recycling business, refiners, everybody has this problem, which is that
if you get a box of dust that's catalytic converter dust.
(27:23):
There's a pretty good chance that's somewhere in there fractionally
there's a stolen converter that is part of that dust,
But how could you possibly figure out where it came from,
which one it was. And so that's where the challenge
of sort of trying to pull apart the illegal business
that's infiltrated illegal business, trying to pull it back out
becomes incredibly challenging the further up the chain you go.
Speaker 1 (27:46):
So Tyler Curtis and DG Mike claim, well, we didn't
do anything wrong, we were just buying a legal product
on the market. Does that argument actually hold any weight?
Speaker 4 (27:57):
Well, I think there are people in the industry who
say they're just being made an example of because this
is such a huge problem and they were dealing with
it the way everyone else was dealing with it. They
were buying a ton of converters. Yes, But also I
had one person tell me if you look at the
number of stolen catalytic converters, which is anywhere from the
(28:18):
low end, like sixty five thousand a year to up
to one hundred and fifty thousand a year in the
United States, and you kind of.
Speaker 3 (28:25):
Run the math on.
Speaker 4 (28:27):
Even if they had a majority of those that were
running through let's say DG Auto, it's still not most
of their business, like most of their business was still legal.
And so the question becomes, how many illegal converters infiltrating
your business turns you into a criminal? And I think
the law is not really set up to try and
(28:49):
confront that. And the industry is also struggling with that
because people in the legitimate catalytic converter recycling industry, they
also want this problem dealt with.
Speaker 3 (28:59):
They don't want to feel like criminals. You know.
Speaker 4 (29:01):
Some of them said, I don't even tell people what
I do anymore because people think that I'm connected with
this thing that got stolen off.
Speaker 3 (29:07):
Their car in their driveway and they hate me.
Speaker 4 (29:10):
And so the legal recyclers are also looking for a
way to kind of get this out of the supply
chain stream, but it's extremely difficult to do. It's a
very strange criminal circumstance.
Speaker 1 (29:23):
So after this dust goes to the refiner and is
turned back into metals, what happens to those metals?
Speaker 3 (29:33):
They make more catalytic converters.
Speaker 4 (29:35):
That's the primary use of the metals going back into
brand new catalytic converters, which was one of the things
that really just stuck with me in the story that
if your catalytic converter gets stolen from your driveway, you
get a new one. There's some chance the actual PGMs
in your catalytic converter came from a stolen catalytic converter.
(29:56):
They go back on the market in a totally legitimate
market and no one knows where they came from.
Speaker 1 (30:01):
Kevin, what is the answer here? You said that legitimate
catalytic converter recyclers want the shady side of the business
to be shut down. But is there an answer to
fixing this problem.
Speaker 3 (30:15):
There's not a great answer.
Speaker 4 (30:16):
First of all, the answers are often state by state,
so states come up with things like people can get
their catalytic converters etched with a serial number so it
is actually traceable to your car.
Speaker 3 (30:26):
If it gets.
Speaker 4 (30:26):
Stolen, you can bolt it on better. There's kind of
a cover that you can put over it.
Speaker 3 (30:31):
But then in terms of the.
Speaker 4 (30:33):
Law, you know, they always kind of fall back on
changing catalytic converter theft from a misdemeanor to a felony,
or making sure that you have to have a certain
kind of paperwork. If you possess a catalytic converter, you
have to be able to say what car did it
come from? And you have to have a license to
possess catalytic converters. But that requires all the way up
the chain people keeping track of the paperwork in a
(30:55):
business that when you're dealing with junk yards muffler shops,
it is kind of tough to do, especially if the
laws are different for every state. Because some of the
dealers work across many states, and one told me something
that I do in one state I can get arrested
for in another state.
Speaker 1 (31:11):
I guess if you look way way down the road,
electric cars don't need catalytic converters.
Speaker 3 (31:17):
That's the answer.
Speaker 4 (31:18):
As long as electric cars continue their rise, maybe that'll
solve the problem, although in the meantime the problem arguably
gets worse because the higher admission standards you have, the
higher concentration of PGMs you have in.
Speaker 3 (31:32):
The catalytic converters.
Speaker 4 (31:33):
So as the United States and other countries institute these
emission standards higher and high and hire, the catalytic converters
become worth more, so you might have a short term
problem and a long term solution.
Speaker 1 (31:46):
Evan right left, Thanks so much for coming on the show.
Speaker 3 (31:49):
Thank you really enjoyed it.
Speaker 1 (31:53):
Thanks for listening to us here at The Big Take.
It's a daily podcast from Bloomberg and iHeartRadio. For more
shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or
wherever you listen, and we'd love to hear from you.
Email us questions or comments to Big Take at Bloomberg
dot net. The supervising producer of the Big Take is
Vicky Virgalina. Our senior producer is Catherine Fink. Our producers
(32:16):
are Michael Falero and Moberrow ruffelm Sely is our engineer,
with additional production support from Abrea Ruffin. Our original music
was composed by Leo Sidrin. I'm west Kasova. We'll be
back tomorrow with another Big Take.
Hosts And Creators
Sarah Holder
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