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Tow company says truck seizure will drive it out of business

Posted by Jason Johnson | Oct 30, 2019 | Bay Briefs | 0 |

Owners of the only business charged in the Mobile Police Department’s probe of the towing industry claim the seizure of four wrecker trucks was a disproportionate and “unconstitutional” response to their alleged offenses that could ultimately shut the 20-year-old business down for good.

As Lagniappe has reported, Gary Smith Jr., who owns and operates SOS Towing in Mobile, was arrested on five counts of insurance fraud on Sept. 17 along with his father, Gary Smith Sr. Upon their arrest, officers confiscated all four of the company’s trucks — allegedly being used to execute the fraud.

The arrest was the culmination of a months-long investigation MPD launched into several local towing companies that allegedly violated portions of a city ordinance that governs what wrecker services can charge motorists when they’re responding to accidents handled by MPD officers.

The department suspended SOS Towing and four other companies from a rotating list of the wrecker services it uses for 60 days in July, but reinstated them as it became clear members of the Mobile City Council were growing concerned about the effect the suspension was having on the businesses.

All five were reinstated, but MPD went on to raid SOS Towing — arresting Smith and his father.

In addition to the criminal charges, the Mobile County District Attorney’s office filed a civil forfeiture action last month seeking to permanently take  SOS’ tow trucks. Now, Smith’s attorneys are asking a judge to force MPD to return the trucks until the forfeiture proceeding is decided in court.

In the filing, Attorney William K. Bradford argued that, by taking Smith’s only means of making a living, MPD is effectively putting SOS Towing out of business and damaging the business beyond repair.

“It’s not just that they’re going to lose the wreckers, they’re going to lose a family business, and the longer this goes on, the chances of them digging themselves out of that hole and repairing the business goes down,” Bradford said. “Even if they win this case a year down the road, the only thing they could possibly do would be to sell the wreckers and try to recoup some money because the business is gone.”

Bradford said SOS Towing has lost long-standing contracts to tow vehicles for car dealerships and other law enforcement agencies. Bradford said MPD is getting no use from the trucks and wouldn’t incur any harm were they returned to the Smiths while the case is pending, with the exception of wear and tear.

According to Smith, his business generated around $20,000 a month before the trucks were seized.

At a hearing last week, Circuit Judge Wesley Pipes questioned Assistant District Attorneys Clay Rossi and Chris McDonough about the seizure and why the state is bringing insurance fraud charges when no insurer has filed a criminal complaint about the alleged fraud.

Rossi said the Smiths committed fraud when they submitted invoices to insurance companies that included charges outside of what they were allowed to bill under the city’s towing ordinance — a decades-old document the city is rewriting entirely and that MPD itself has admitted to violating.

Pipes asked what authority the state had to bring charges under these particular circumstances, and Rossi ultimately agreed “it would be fair to say [this situation is unique].”

Chase Dearman, who is representing the Smiths in their criminal proceedings, said his clients “tried their best to follow the law in every possible way.” He also questioned why four other companies were publicly suspended for violating the same ordinance but have yet to face criminal charges.

The ordinance at the center of these charges has been problematic for local towing companies and for MPD, which acknowledged in August that its own impound yard had been overcharging some motorists for fees not permitted by the city’s ordinance, dating back to at least 2015.

Forfeiture laws allow claimants to pay a bond equal to two times the value of contested property so it can be returned to them while the court makes a final decision. However, Bradford said the financial hardship losing the trucks has caused the Smiths makes paying a bond nearly impossible for the family. There’s still a dispute over their exact value, but Bradford said the Smiths can’t afford the bond regardless.

He also argued the trucks should have never been seized because they weren’t purchased with proceeds from a crime and weren’t substantially connected to the alleged insurance fraud — two things the government would need to prove in order to permanently seize them through civil forfeiture.

In his motion asking Pipes to step in, Bradford argued “the act of submitting a claim, not towing a vehicle” was the basis of the crimes his clients are accused of, and thus, the trucks are “inconsequential.”

In court, McDonough downplayed Smith’s claims about the impact on his business, saying he’d created a “hue and cry in the media.” He said Smith isn’t required to pay the bond for all four trucks and could pay the bond for one or two. He also argued Smith’s lawyers should have made their plea to the court sooner.

“They’ve known about this option since before the [forfeiture] complaint was filed,” McDonough said. “They say ‘this is an emergency, we’re going out of business,’ but they’ve sat on their hands for weeks.”

Dearman rejected that characterization and said he filed a motion in the criminal case attempting to have the trucks returned. A hearing on it was scheduled for Oct. 3 in District Judge Joe Basenberg’s courtroom, but prosecutors filed a civil action the night before, which put the matter out of his jurisdiction. Smith said he was served with a civil subpoena for the first time when he walked into that hearing.

At the time, Dearman went on to accuse the state of purposely delaying the matter — stating in court the prosecution intended to “put [Smith] out of business.” The state has denied those allegations, and it’s worth noting it wouldn’t be uncommon for prosecutors to pursue a civil forfeiture action at the same time a related criminal case is being adjudicated. 

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About The Author

Jason Johnson

Jason Johnson

Jason Johnson originally hails from Elba, Alabama, and graduated summa cum laude from Troy University in 2011. He’s been a reporter for Lagniappe since 2014, where he covers an array of topics with a focus on county government, local courts and education. Previously, Jason worked for the Southeast Sun (Enterprise, Alabama), the Alexander City Outlook and 94.7 WTBF FM (Troy, Alabama). He’s also been recognized by the Alabama Press Association with designations in general excellence, photography and education reporting. In his spare time, Jason is a guitarist and drummer who enjoys the benefit of regularly playing with musicians better than himself.

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