COBB COUNTY, Ga. — Wealthy Georgians with garages filled with exotic cars are accused of cheating local taxpayers.
Channel 2's Mark Winne investigated for months, and so did the Georgia Department of Revenue Special Investigations Unit, leading up to local raids that also involved the Federal Aviation Administration, Sandy Springs Police Department and Cobb County Police Department.
Authorities executed search warrants for an investigation focused on two men accused of registering numerous exotic cars in Montana because the state does not charge sales tax or ad valorem tax on cars, unlike Georgia and most other states.
However, the owners of the cars live in Georgia. Winne learned the car owners have avoided millions in taxes.
"It’s costing the state of Georgia millions of dollars a year," Chief Josh Waites, of the Department of Revenue, said.
A 2004 Ferrari Challenge Stradale would cost about $10,290 to register in Georgia if you were to buy it today. A Montana official estimates the same car would cost $213.95 to register in Montana.
The investigation focuses on Ryan Hardwick and Dustin Farthing, who have not been charged, according to Waites.
Hardwick said he had no intention of breaking any law in Georgia and checked with lawyers both in Georgia and Montana. He said exotic cars and RV owners across the country do it.
The story is much bigger than one case. Waites said countless other wealthy Georgians are doing the same thing.
"It's really not fair to every other taxpayer," Waites said.
Our Channel 2 Action News crew spotted exotic cars carrying Montana tags across metro Atlanta: in Dunwoody, in Sandy Springs at car shows, outside a mall restaurant and driving down Peachtree Street.
Montana Motor Vehicle Division Administrator Sarah Garcia said with minimal effort, people can save a lot of money and fully comply with the law in Montana.
"I would say in Montana that per capita, we probably have more Bugattis registered here than any other state in the nation," Garcia said.
"It's fair to us. But we're doing everything aboveboard," Garcia said.
Garcia and Joann Loehr, with her office, said under Montana law, you can set up a limited liability company, a company that doesn't have to make or sell anything.
"It fulfills that Montana residency requirement, yes," Loehr said.
Even with new flat fees for certain vehicles, many people who live elsewhere can still save big money registering expensive cars in Montana.
They said Montana has dozens of firms that will set up the LLC for you and even go to the tag office for you.
Jennifer McCluskey is the manager of Montana Corporate LLC. She said her business and many of her competitors in the state are registering vehicles in Montana for people who do not live there.
“We’ve registered anything from a Toyota Camry to a Bugatti,” McCluskey said. “I’d say the majority probably do not come to the state.”
Waites said his unit is taking a new approach.
“We believe on this scale, this is the first time it’s been done like this,” Waites said.
He said McCluskey's firm is not involved in the criminal investigation he's launched, though one of her competitors is.
“We think it will have an affect throughout the nation,” Waites said.
“This is really the first time that we’ve seen law enforcement boots on the ground going into accomplish something like this and certainly it has sent shock waves,” Ed Bolian said.
Bolian said as founder of the car app Vin Wiki, cannonball run record holder, and former sales director at a Lamborghini dealership, he's got the pulse of the exotic car community, and thinks the Georgia Revenue Investigation is a game changer.
“We’ve always known that a day like this would come at some point, and our advice to anyone who would come in with a Montana LLC for registration was always, ‘You understand that you’re in Georgia and there’s an expectation there’” Bolian said.
Waites said Deer Park Corporate Services, of Helena, Montana, set up the LLCs for at least some of the cars involved in his investigation.
It appears to be connected to LLCTLC in Helena. Employees decided not to speak with Winne when he visited the business.
"We definitely want to talk to them," Waites said.
Michael Willing told Channel 2 Action News that he is the owner of Deer Creek Corporate Services and LLCTLC. He said any citizen of Georgia should be able to use the same kind of mechanisms President Donald Trump and his son-in-law Jared Kushner, have used to protect their assets.
Hardwick said car dealers in Georgia and elsewhere have pointed him toward registering his cars in Montana. Once Georgia dropped its annual sales and use tax on cars in favor of an upfront title tax, he was led to believe going to Montana to get his car titles to save money was legal.
Since the DOR said he needs Georgia tags on cars here for more than 30 days, that's what he's going to do.
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