Louisiana OMV audit: Two employees allegedly steal $200,000-plus from customers in 3 years _lowres

Advocate staff photo by HILARY SCHEINUK -- Customers line up at the counter of the unusually empty main Office of Motor Vehicles office near State Police Headquarters on Independence Boulevard.

Hoping to cash in on $444 million in outstanding debts, the Louisiana Office of Motor Vehicles last week issued a mass mailing of 1.2 million letters to drivers with lapsed insurance, warning them a collections agency might be deployed if fines of up to $525 go unpaid.

The snail-mail blast is the first effort by the OMV to capitalize on a new provision of a law allowing the department to collect money through the 2-year-old Office of Debt Recovery, the state’s collection agency of sorts, said Rep. Barry Ivey, R-Baton Rouge, who authored the new part of the measure this year.

[Scroll down to the bottom of the story to read the letter.]

But the flood of letters is being derided by recipients as a money grab by a state thirsty for dollars. Some drivers feel they’re being shaken down for trivial paperwork issues from as far back as 29 years ago that they were never notified about until now.

“It’s kind of threatening. This is an administrative oversight from 11 years ago,” said Brandon Friedman, a 37-year-old Army veteran who moved away from Louisiana in 2004. The Virginia resident said he got a notice — the first of its kind — at his parents’ Shreveport home demanding $525 for an insurance interruption on a vehicle he claims he lawfully reregistered in a new state.

Col. Mike Edmonson, head of the State Police, which oversees the OMV, said the solicitations are an honest effort to recoup liabilities owed. Some drivers, he said, knowingly allow their auto insurance to expire and continue to drive in Louisiana, which isn’t allowed. Until now, the OMV didn’t have a way of collecting the money through the Office of Debt Recovery, he said.

“If we didn’t do anything, people wouldn’t pay anything,” he said. Even though some penalties arise from infractions as far back as 1986, the debt doesn’t disappear, he said.

Friedman said he’d react differently if the letter were phrased as a request for missing documentation, rather than a collections notice.

The letter reads, “You now have sixty (60) days from the date of this notice to submit proof of current insurance or documentation of vehicle disposition (sold, traded, junked etc.) along with the appropriate payment for your delinquent debt.” A fee schedule outlining penalties of up to $525 is followed by payment instructions, including a list of accepted credit cards.

“One of the things you learn in the military is never give an order you can’t enforce,” he said.

Questions to OMV Commissioner Stephen Campbell were referred to State Police spokesman Lt. J.B. Slaton, who said he hadn’t read any version of the letter Tuesday.

Slaton noted that many of the warnings were the first notifications to drivers, and some people may have received multiple notices at once, meaning it’s not necessarily true that half of Louisiana’s 2.96 million drivers received the notices. The OMV can’t collect the debts until they become final, after two further notices — after 30 and 60 days — have been sent, Edmonson said.

Both Slaton and Edmonson emphasized the OMV would be amenable to canceling the debts if drivers provide documentation explaining legitimate insurance lapses.

But that’s not what happened to Jennifer Simoneaux, a 57-year-old Rayne resident who said that after receiving a notice last week, she provided her local OMV with proof she sold a vehicle this year to a dealer. The dealer had told her it would process any auto registration issues.

Despite the documentation of the sale, Simoneaux said, a woman at the OMV counter told her she still owed the fine, warning her that nonpayment would eventually ruin her credit. Frightened, Simoneaux paid $132.

“Now I’m upset, because I want my money back. I did my job, and the used car place says they did their job,” she said. “Somebody is screwing up somewhere.”

Slaton did not respond to the problem posed by Simoneaux late Tuesday. He said earlier Tuesday that to avoid confusion, drivers should mail the OMV their old Louisiana license plates when no longer in use, something that’s supposed to be done by out-of-state OMVs when residents file for new auto registration.

“It could have been handled with a little more clarity, and I think they’re trying to bring that now,” said Ivey, referring to the State Police and OMV. Ivey said that when the legislation was being formulated, he hadn’t thought about how extensive the mailings would be or how retroactively they’d be enforced.

Ivey said the OMV hadn’t been sending letters for smaller fines because the cost of issuing the notices outweighs the possible debts owed.

But with an estimated $444 million in outstanding liabilities, as outlined in his bill’s fiscal note, he said, the cost of at least $500,000 to send 1.2 million letters was justified. Ivey said he was using a ballpark figure of about 50 cents for the cost of sending and printing a letter.

“The state is trying to get back money that’s owed to them, the way any business would do. When you’re owed money, you’ve got to try to collect it,” Edmonson said.

Simoneaux’s daughter Tracy DeLatte, a 34-year-old journalist in Dallas, said she’s another casualty of OMV’s mass mailing. She said her notice probably results from her move from Louisiana to Texas in 2005.

“Maybe I didn’t tell the state that I was leaving,” she said. “I can’t really prove what happened to the car. I’ll pay you the money, but I still don’t think it’s fair.”

[Having trouble reading the letter? Click here.]

Louisiana OMV letter

Follow Maya Lau on Twitter, @mayalau.