Who Pays for Fraudulent Temporary Operating Permits?

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The Hidden Costs of Fraudulent Temporary Operating Permits — $100’s of millions of Dollars lost each year

Temporary operating permits are a critical administrative tool. But when they are fraudulently issued or exploited — especially in the form of temporary license tags — the financial and operational costs hit state and local systems hard. These are costs most DMV leaders know about anecdotally, but which are now documented in real dollar losses.

1. Real Revenue Losses from Unbillable Tolls and Fees

• In New York, enforcement task force data show that vehicles stopped for fraudulent or altered plates owed $45.7 million in unpaid tolls, fees, judgments, and debts in 2024 alone. Through part of 2025, another $4.6M was identified in unpaid amounts tied to similar violations. 
• Independently, analysis has found that the Metropolitan Transportation Authority (MTA) lost about $11.3M in unpaid tolls in 2022 due specifically to bad or fraudulent temporary tags. 
• The Port Authority of NY & NJ loses more than $40M annually in unpaid tolls at bridges and tunnels, a figure that also reflects fraudulent/fake or obscured plates. 

These losses aren’t abstract — they directly reduce funds for road maintenance, transit operations, and safety investments that compliant registrations are meant to support.

2. Large-Scale Fraudulent Permit Issuance

• Federal prosecutions in Texas documented schemes where at least 550,000 fraudulent temporary buyer tags were sold nationwide by a single ring, undermining registration systems and enforcement. 
• In another Texas case, a wholesaler of fake tags was ordered to pay just $316,820 in restitution — a drop in the bucket compared to the scale of the fraud and the collateral impacts on unpaid tolls and lost enforcement revenue. 

3. Local Estimates of Broader Economic Impact

• Harris County, TX analysis estimated over $80M in potential lost revenue from unbilled tolls and uncollected fees linked to fraudulent temporary tags — a conservative estimate focused only on a single county. 

4. DMV Operational Burdens and Enforcement Costs

Beyond direct financial effects, fraudulent permits impose significant operational costs on DMVs, including:

• Time and resource drains from investigations, audits, and compliance reviews
• Coordination with law enforcement and tolling authorities
• Public complaints and reputation costs when fraud leads to enforcement gaps

For example, New York DMV investigations of false license plates resulted in hundreds of citations, seized plates, and towed vehicles — each an administrative cost with limited direct revenue return. 

In Summary for DMV Leaders:

• Fiscal Impact Is Real: Tens of millions of dollars in unpaid tolls, fees,      taxes, and registrations are linked to fraudulent temporary tags. 
• Fraud Is Systemic, Not Random: Hundreds of thousands of fraudulent tags can      be issued under weak controls and minimal penalties. 
• DMV Operational Costs Are Rising: Enforcement, audit, and interagency      coordination efforts divert scarce staff time and budget. 

This isn’t just an enforcement issue — it’s an operational and revenue integrity challenge requiring stronger controls, better verification, and interagency strategies that preserve the integrity of vehicle documentation systems.