- Jul 31, 2013
Luxury Cars Command Top Dollar On Black Market
Chinese nationals have been advertising on Craigslist and luring unsuspecting Americans into helping them smuggle luxury cars out of the United States and then selling them on the black market in China.
This is, of course, illegal in both countries. But it’s also highly lucrative. The Automotive News recently did a detailed investigation of the practice.
It basically works like this: A buyer in the U.S. purchases the car in cash and registers the car here, then a go-between ships the car to China. The buyer makes a few hundred dollars for their efforts. But the real money to be made in this endeavor is by the proprietors of the scam.
Read on to find out how much luxury cars cost in America, and how much profit they can bring in China:
Price in U.S. dollars: $70,000
On the black market: $160,000
An investigation brought together Homeland Security, New Hampshire State Police and major auto dealerships, according to the Exeter, N.H. Patch.
New Hampshire was a favorite place for the export ring to operate because it is the only U.S. state that has no sales tax on vehicles and it also does not require insurance on new purchases.
Price in U.S. dollars: $50,575
On the black market: $148,750
Authorities seized 14 vehicles they say are valued at more than $5.5 million dollars that the two people arrested in the case, Frank Ku and Danny Tsu, are in the process of losing via forfeiture laws. But that's also a small portion of the 93 cars that authorities say made it overseas and into the hands of willing buyers.
Price in U.S. dollars: $60,725
On the black market: $171,500
Police said the people responding to the Craigslist ads unwittingly broke the law when they resold the car, and that many had no idea their actions were illegal. Authorities said they only made a few hundred dollars, and would not face prosecution because they cooperated.
Price in U.S. dollars: $112,500
On the black market: $220,000
Authorities said the cars were shipped either from Newark, N.J., or Long Beach, Calif., but that their registrations from other states, such as New Hampshire, made them appear used.
"This is a first-of-its-kind prosecution, and I hope it will not be the last," U.S. Attorney John Kacavas tells the Automotive News. "These rings are far-reaching."