New Calif. law aims to halt catalytic converter theft

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SACRAMENTO, Calif. - All it takes is a saw, some muscle and a few minutes. Day or night, it doesn't matter -- maybe they strike while you're in the mall. You don't know anything's wrong until your vehicle starts with a thunderous VAROOM.

And there you are, another hapless car owner ripped off by a catalytic converter thief.

The crime, uncommon until just a few years ago, is now so widespread that California lawmakers earlier this year unanimously -- that's right, unanimously -- passed a bill aimed at deterring criminals who steal converters, which are prized for the tiny amounts of precious metals that they contain.

The law, written by Sen. Ron Calderon, D-Montebello, took place Jan. 1 and mandates that recyclers create a paper trail for all converter transactions to deter criminals from selling stolen units as scrap.

"It's a rubber-meets-the-road issue," said Calderon spokesman Rocky Rushing. "The bill's provisions deter bad guys from getting immediate gratification -- cash -- for their ill-gotten gains."

Still, two industry insiders said the measure adds an expensive bureaucratic layer and delay to a business that deals in commodities with daily fluctuating values.

Located on a vehicle's underside as part of the exhaust system, converters contain a few grams of platinum, rhodium or palladium. In pure form, those precious metals run from a few hundred dollars to well over $1,500 per ounce on the commodities market.

A thief with a saw can steal a converter in just a few minutes, then sell it to a scrap yard or a recycler for $30 or more, depending on market demand. Some thieves steal dozens in one vandalizing swoop through a parking lot or a car dealership.

The unlucky car owner is left with a vehicle that sounds as if it is going to explode and a repair bill of $200 to $400 or more, said Sacramento muffler shop owner Colby Sandman.

"We did an enormous number of repairs last summer, literally 15 or 20 per day," said Sandman, who owns Muffler Tech in Sacramento. "I hate to say it, because it was horrible for the car owners, but that business got me through."

Recyclers sell and resell the units to each other in larger and larger batches. Once a recycler that specializes in converters assembles enough for a truckload -- about 3,000 to 4,000 -- the units go to a "decanning" plant that opens the canisters and removes their ash-like contents.

That material is then shipped to smelters, who use extreme heat to extract the precious metals.

The whole process, from the first sale to the end, takes four or five months," said Ashok Kumar, director of A-1 Specialized Services and Supplies Inc., a large decanning company in Croydon, Pa. "And the problem is that there's no title for scrap metal. That makes it hard to track."

Under the new state law, businesses will collect detailed information on converter purchases and keep the records for two years, including the place and date of each transaction and a clear picture or video of the seller.

Converter recyclers must pay for converters with a check mailed to an address or picked up by the seller after a three-day delay.

That rule, Rushing said, gives police time to track down stolen units and puts off a big reason for many converter thefts.

"These crimes are often committed by those looking for quick money to buy drugs," he said. "The three-day wait removes that incentive."

Violators face a first-time misdemeanor fine of $1,000. A second violation doubles the fine and gives a judge the option to suspend the business's operation for up to 30 days. A business that continues breaking the law after that risks at least a $4,000 fine and a court-ordered business shutdown of at least a year.

The new law expands on another enacted last year that mandates junk dealers keep thorough business records when buying or selling scrap, including sellers' fingerprints.

Many states put similar statutes on the books after a red-hot metals market enticed thieves to steal everything from manhole covers to copper pipe for the recycling value.

But California's new law "sounds like a lot of work," shop owner Sandman said, noting that earlier laws forced him to add an employee to deal with state-mandated paperwork and record keeping. He predicted that many converter sales would move out of state to avoid this new law.

The three-day delay presents a problem, too, Kumar said.

"In other states that have done this, a lot of scrap dealers have said, 'We can't afford to hold it,' " he said. "The market can move too fast."

None of the state or local law enforcement agencies contacted by The Bee keep statistics on catalytic converter thefts, but all agreed the problem surged over the last year when precious metal prices soared. Prices have since dropped, and converter theft has cooled somewhat.

In May, for example, Sacramento County sheriff's deputies on a domestic violence call arrested a man after spotting 10 stolen catalytic converters in his vehicle.

A month earlier, Covina police arrested two men on suspicion of stealing a U-Haul truck loaded with 30 converters stolen from company fleet vehicles.

And nationally the problem has become so pervasive that the Institute of Scrap Recycling Industries now alerts members within a 100-mile radius of catalytic converter thefts.

"We've seen people with a hacksaw pop into a car lot and leave with 20 or 30 (catalytic) converters in a fell swoop," said institute spokesman Bruce Savage.

E-mail reporter Jon Ortiz at jortiz(at)sacbee.com

(Distributed by Scripps Howard News Service, www.scrippsnews.com.)

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