NC contractors can’t account for 234 seized vehicles, audit says

RALEIGH, N.C.  – Contractors hired by North Carolina to tow, store and auction vehicles seized during DWI cases cannot account for 234 vehicles, according to a state audit.

Martin Edwards & Associates, Inc. and Eastway Wrecker Service, Inc. were contracted to handle vehicles as part of North Carolina’s DWI/Felony Speeding to Elude Vehicle Seizure Program.

The vehicles handled by the contractor would be connected to repeat DWI offenses and for felony speeding to elude arrest cases.

Read the audit

The audit states Martin Edwards & Associates can’t account for 221 vehicles of the 4,772 it seized.

Eastway was unable to provide documentation for 13 of the 4,018 vehicles, the audit states.

The vehicles had an approximate value of $634,000.

The audit report includes a six-page list of automobiles that were seized by the state and are now unaccounted for.

“Because contractors were unable to provide documentation supporting the status or location of these vehicles, there is a risk that contractors inappropriately benefited from the contract,” the audit states.

The vehicles were seized between July 1, 2013, and June 30, 2016.

The Department of Public Instruction was in control of the program from Dec. 1, 1997 to Feb. 29, 2016.

The Department of Administration’s State Surplus Property Agency took over the program as of March 1, 2016.

Auditor Beth Wood told CBS North Carolina her investigators had great difficulty in trying to get information from Martin Edwards and Associates.

She says they were “uncooperative and rude” and at one point a company staffer “threw a subpoena at one of her auditors” when they were ordered to produce documents.

According to the audit report, Martin Edwards and Associates

  • Actively hindered the audit
  • Was unwilling to produce requested documentation
  • Had poor record keeping
  • Could not produce over 440 documents

When consumer reporter Steve Sbraccia called the company to try to get answers and said he was as a reporter, a person identifying herself as Nicole said, “let me stop you right there. We have no comment.”

“It is our recommendation that the state of North Carolina not do business with that eastern vendor,” said Wood.

The state seized the cars under a program that takes away vehicles from those arrested repeatedly for DWI or those who flee police during high-speed chases.

Martin and Associates writes on its website that it in fact gets many of the cars it auctions from the state seizure program under its contract with the state.

The auditor wants that contract pulled.

“The bottom line, the DPI did not do their job,” said Wood.

In a response letter attached to the audit report, DPI says it was never set up to oversee a vehicle auction program as this is not part of our core function.”

Some of the money generated by sales from the seized vehicles is supposed to go the state’s public schools, which is why the seizure program was supposed to be overseen by the Department of Public Instruction.

Auditor Wood says the program was moved from DPI to the Department of Administration last year and that DOA is now taking steps to insure a situation like that won’t happen again.

She explained what DOA must do.

“The Dept of Administration needs to look at the number of vehicles seized monthly and tie it back to documentation from the vendor saying it’s been released, sold or on their lot,’’ said Wood

Meanwhile the search is on to locate the hundreds of vehicles that can’t be accounted for.

CBS North Carolina has learned the state License and Theft bureau is now on the case, trying to track down what happened to the vanished vehicles. The auditor says it will be up to that agency to decide if criminal charges need to be filed once it completes its investigation.

The audit report also says Eastway Wrecker Service cooperated fully regarding the investigation into the 13 vehicles it couldn’t account for.

The audit scope included a review of Program activities between July 1, 2011, and June 30, 2016.

The audit recommends the Department of Administration should monitor contractors regularly and determine to what extent the contractors are able to provide these services under current and future state contracts.

The Department of Administration said it began monitoring the program as soon as it was handed to them in March 2016 and agrees with the audit’s findings.

Martin Edwards released the following statement Thursday afternoon:

Martin Edwards is disappointed that we were not given an opportunity to either review or respond to the state’s audit prior to its release to the media. The report currently indicates that the paperwork for 221 vehicles was not provided. Martin Edwards, in fact, complied with requests for document production on four different occasions, sending more than 3500 pages of documents to the state auditor’s office. Martin Edwards has cooperated fully with this audit.

Now that Martin Edwards has the list of reported incomplete files from the audit process, we believe that the appropriate records do exist, and they can and will be provided. We also believe that in most cases, the records already have been produced, in some instances at least nine months ago. However, we are happy to review the files and make sure that the paperwork for these 221 vehicles is properly accounted for as soon as possible.

In the case of these vehicles, it appears that they were either returned to owners, auctioned, released prior to pick-up by Martin Edwards, or are still on the lot pending auction. This issue is one of record keeping and a significant file review. Martin Edwards & Associates has been diligently fulfilling its contract for the state and vehemently denies the implication of any wrongdoing.

Likewise, Eastway Wrecker Service is surprised the state auditor did not provide the opportunity to review or respond to the audit before it was released to the press. After reviewing all allegations, Eastway has accounted for all 13 of the records in question. Most of the vehicles were never in Eastway’s possession, but were released directly to the owner by the original towing company.