A $1M Ferrari – or is it? Insurance investigators face rising fraud claims

W5’s Jon Woodward investigates how criminals are using VIN spoofing to disguise cars and turn the value of one stolen car into multiple insurance payouts.

This is the fourth in a five-part CTV W5 series on re-vinning, a lucrative tactic by car thieves to disguise stolen cars for sale to unwitting drivers.

It’s sleek, it’s red and it has that recognizable engine roar of a top-notch Ferrari sports car.

But when the owner tried to insure it for $1 million as a rare Ferrari 599 GTO, something didn’t sit right with Stefan Nasner, an investigator with Aviva Insurance’s fraud unit.

“That’s a very rare model. But that’s not what it is,” said Nasner with a smile, as he showed the vehicle to W5 in a warehouse north of Toronto.

Under his examination, that carefully crafted image falls apart. The dashboard is revealed to be in disrepair. The display lights up with a different model number.

And under the hood, the engine bears the mark of a different Ferrari: a 599 GTB.

“A GTB is a lot less valuable than the GTO,” Nasner said.

The car was disguised, Nasner believes, as part of an elaborate fraud: It was sold to a new owner who said he wasn’t aware of the car’s real identity.

“Had we paid out on what it was registered for, it would have been over $1 million,” Nasner said.

Those big bucks are what a GTO might be worth. For the GTB – it would have been a few hundred thousand dollars. The difference would have been a smart payday for an industrious fraudster.

And, incredibly, this isn’t the first time a customer has tried to pass off this Ferrari as a much rarer model. Aviva has already paid out a claim on this Ferrari once before.

“We could have lost twice,” Nasner said.

Nasner is at the heart of the cat and mouse game that insurance companies play with the fraudsters trying to trick them into big payouts.

How car thieves use VIN spoofing

The Ferrari is just one audacious example of how car thieves can attempt to turn the value of one stolen car into many insurance payouts, multiplying the value of what they stole.

Key to the disguise is spoofing the unique vehicle identification number, or VIN.

In this case, the Ferrari’s Carfax record points to service records in Montana, Texas, and Michigan, with colours that seem to change with each service.

“It doesn’t make any sense,” Nasner said.

The reason it doesn’t make sense, he says, is that it’s probably a scam – it’s very unlikely that a Ferrari is changing colour that many times in that many places.

• More W5 investigations

That same VIN is probably attached to several different cars, circulating through different mechanics, each of them reporting the work done independently.

The VIN traces back to a real Ferrari GTO on sale across the border, in Detroit.

Tracking those vehicle identification numbers is now a huge part of Aviva’s fraud detection programs, says Mike Cardillo, Aviva’s manager of national investigations.

VIN fraud is up 300 per cent in the last few years, according to his numbers.

Selling stolen cars locally has become more important for thieves, he says, as a government crackdown has made it harder to sell them overseas.

One major challenge is that somehow, many fake numbers are legitimately registered with provincial governments anyway – a sign that they’re not bothering to check across jurisdictions for potential repeats.

“We need to make sure that we’re doing our due diligence when a vehicle is being registered, and close those loopholes in the ministry to make sure that some of these false VINs aren’t being registered,” Cardillo said.

Or, worse, they could be in on the scam. One Service Ontario worker was convicted earlier this year for her part in trafficking three vehicles, and for breach of trust.

Solving the problem of how cars get registered is a crucial part of stopping what could be another stolen car trying to get insured, Cardillo said — a crime that pushes up insurance payments for everybody.

If that’s done, it would be a lot harder for a fraudster to try again with this Ferrari, a third time.

More from this series:

• Part one: They bought a car from a dealership but it turned out to be stolen. This is how it happened.
• Part two: ‘It’s crippled me’: How a car dealer discovered stolen cars being sold out of his shop
• Part three: ‘It never comes back to you’: Corrupt Service Ontario worker brags about her role in a scheme to sell stolen cars
• Part five: Ontario premier vows action on inspecting possibly stolen vehicles after W5 investigation