The Alameda County District Attorney has filed charges against a notorious East Bay towing company for predatory towing, falsifying documents and tax evasion. Despite the charges and an upcoming trial, the company appears to still be in business.
In a two-part cover series in 2018, the East Bay Express reported on Private Property Impound’s predatory towing for dollars in the East Bay cities of Oakland, San Leandro and Alameda. The reporting on “PPI,” and complaints by at least 13 victims, led to an investigation by the Consumer and Environmental Protection Division of the Alameda County District Attorney’s Office.
The first complaint came on June 4, 2018 and led to an eight-month investigation and a dozen more victims of “predatory tow,” according to the probable-cause declaration filed by Inspector Michael Carter. Law enforcement agencies executed a search warrant at PPI’s San Leandro Boulevard location in Oakland in February 2019. PPI uses OMADI Software, a towing-management technology. With a follow-up warrant for OMADI records, investigators reviewed the records of the original 13 victims and claimed they found “systemic fraud.” Multiple drivers towed vehicles without authorization, signed authorizations across multiple properties and even obtained signatures days and weeks in advance of tows, according to the declaration. State law requires towing companies to obtain authorization from a property owner, manager and onsite security at the site and time of the tow. The lack of authorization violates state law.
“Private property tow truck drivers, and by extension their employers, only get paid if they tow cars. There is a built-in incentive to produce as many tows as possible, to maximize income,” Carter wrote. Private Property Impound LLC, or PPI, is owned and operated by couple Daniel W. Russo and Stephanie M. Gipson. Russo, Gipson and PPI drivers were aware of the law, Carter suggests. During the raid, PPI obtained a larger poster with relevant towing laws, according to the declaration.
In addition to unauthorized tows, investigators claim owners Russo and Gipson were part of a “conspiracy.” OMADI tracks changes to towing records and revealed “hundreds of alterations” to records after the initial warrant by “System Update,” “DG” (Daniel Russo) and “SG” (Stephanie Gipson), according to the declaration.
In addition to tampering with evidence, Russo and Gipson allegedly falsified bank records and tax filings. A forensic analysis by Michael Woo, a retired IRS criminal investigator, found large discrepancies in PPI’s banking records, the declaration stated. Much of PPI’s business is conducted with cash. Woo found evidence of “structuring,” a money-laundering practice to hide sources of funding for criminal activities. Sean Leid, a special agent of the state’s Franchise Tax Board’s Criminal Investigative Bureau, found numerous instances of tax evasion. According to the declaration, Russo, Gipson and PPI, Inc. filed fraudulent returns in the years 2017, 2018 and 2020. PPI’s tax deficiency totalled $117,289, while Russo and Gipson had differences of $33,332 and $53,979, respectively.
In all, the DA charged the couple and their company on 21 counts. The company was charged with nine counts: three counts of felony tax evasion and six counts of false filing to promote criminal activity. Gipson was charged on nine counts: three felony counts of tax evasion, two conspiracy charges for false tax documents and removing lawful parked vehicles, misdemeanor evidence tampering and three felony charges of filing false financials to promote criminal activity. Russo was charged with three counts of tax evasion.
It’s unclear when PPI opened for business. Gipson and Russo filed a Fictitious Business Name in September 2010 as a partnership. Between 2014 and 2016, they formed a Limited Liability Partnership, and formed a Corporation in 2017.
Each time a tow company removes a vehicle from private property, they are required to contact local law enforcement. This generates a record within the police department’s Calls for Service. Analysis of calls for private tow records received from the Alameda Police Department through a Public Records Act request reveals the extent of PPI’s towing in Alameda and its concentration on the city’s West End.
As the East Bay Express previously reported, over half of private tows in the City of Alameda occurred at the Summerhouse Apartments, a 615-unit Wall Street-owned apartment complex with a history of displacement. Despite the 2019 raid and investigation, PPI’s activities in Alameda increased. PPI towed 369 vehicles in 2016 and 360 in 2017. In 2018, the year of the first complaint and the expose by the East Bay Express, PPI towed 347 vehicles. In 2019, PPI towed 430 cars, and it towed 307 in 2020. Through May of this year, it appears that PPI only towed eight vehicles.
However, in 2019, PPI attempted to rebrand itself as Pro Towing. According to documents filed with the California Secretary of State, Russo formed Pro Towing and Auto Body LLC in March 2019. Pro Towing removed 22 Alameda vehicles in 2020 and towed 128 vehicles between January and May of this year, with 91% of them from the Summerhouse Apartments. Since 2013, 70% of PPI and Pro Towing’s business in Alameda has been in this one gated community. PPI also has contracts with other strip malls and apartment complexes, including those owned or managed by the Alameda Housing Authority.
Since 2013, nearly three in four cars towed in Alameda were towed by Russo and Gipson’s companies.
Russo dissolved both Private Property Impound LLC and Pro Towing LLC in June 2020. Yet the staff member who answered PPI’s listed number identified the company as “Private Property Impound.” Alameda Police records show drivers at both companies have still towed cars since the legal dissolution of both Limited Liability Companies. An Alameda Police call for service record for an Oct. 26, 2020 tow in front of Ruby Bridges Elementary School in West Alameda lists “Pro Towing (PPI)” as the towing company.
Despite the reporting by the East Bay Express and an investigation by law enforcement, the companies are still towing cars.
For years, vehicle owners have complained about PPI to the Better Business Bureau, on Yelp and more recently, to the courts. Two plaintiffs have been successful in taking PPI to court, but the company refused to pay until one contacted the Sheriff’s Office to enforce the court order for reimbursement. Victims contacted by the East Bay Express declined to comment due to the investigation.
Alameda Police and the City Attorney’s Office did not investigate PPI, despite state law enabling law enforcement and city attorneys to examine the company’s towing contracts without a warrant.
The Alameda District Attorney would not comment since the case is pending, but provided the complaint and the declaration to the East Bay Express. Management for Summerhouse Apartments repeatedly declined to comment. PPI did not respond to an email requesting comment.
Earlier this year,the consumer watchdog group California Public Interest Group, or CalPIRG, published a report on the problem of predatory towing and found an absence of protections for consumers, and unclear or non-existent laws. The report encourages states to strengthen towing laws. While California requires towing companies to post tow-away signage and notify vehicle owners and law enforcement of tows—which enabled this investigative reporting—other protections are lacking. For example, the report finds California does not have a maximum towing rate, and towing companies are able to patrol or scan private property for illegally parked cars. Since companies are not required to photograph parked vehicles before towing them, owners often lack evidence of illegal tows.
PPI, Russon and Gipson’s pre-trial hearing is scheduled for Oct. 20.