Original Article AUCTION BLOCKHEADS By BRAD HAMILTON and ANGELA MONTEFINISE August 28, 2005 -- The NYPD is auctioning off cars to people, and then arresting them for owning them, The Post has learned. Car dealers say that after they buy cars at police auctions, they have been told by cops the cars were stolen, then get locked up, have their cars confiscated and are turned away when they ask for their money back. "I've been doing this for eight years," said Pierre Loiseau, a Queens dealer who co-owns Elie & Jimmy Auto Repair Shop. "It's very common. It happens all the time." Police auction cars once a week, offering vehicles that have been abandoned or that they've seized from felons, ticket scofflaws and drunken drivers. Many of the cars have problems with their vehicle identification numbers, which can be altered or removed, a favorite tactic of thieves. Cops are supposed to verify the car's history of ownership to make sure it's not stolen but often don't, dealers say, and the problem isn't usually discovered until the new owner tries to register the car or get a new title. By then a bureaucratic boomerang has begun: Cops go after buyers often their own auction customers charging them with possession of stolen property. Queens dealer Joey Chou knows the process all too well. He was jailed last year for possessing a stolen vehicle, a BMW 740 he purchased at a police auction for $14,000 in 2002. He put $9,000 into fixing it up and intended to resell it, but when he didn't get a price he liked, he kept the vehicle, registering it at his home so his wife could drive around in style. His luck didn't hold. In March 2004, police paid him an unfriendly visit. "The NYPD's Auto Crime Division came into my place of business and asked if I had a BMW. They said it was stolen," recalled Chou, who owns Joey Tai's Auto Repair in Jamaica and has been buying city-auctioned cars for a decade. "I said, 'I bought it from you guys, but if you'd like to see it, it's in my garage.' "So I took them to my house and said, 'There it is.' They said, 'Turn around, you're under arrest.' " The charges were eventually dropped, but Chou says cops won't return the BMW or give him his money back, even though a Carfax vehicle-history check showed the car to be clean and the Queens District Attorney's Office gave him a release to retrieve the car, he says. When he went to pick it up at the police pound in College Point recently, an officer told him, "If you're going to pursue this, we're going to lock your ass up again," he said. So he's suing the city for $27,000 to recoup his losses. "They don't notify the original owners they just turn around and sell the vehicles," Chou said. "They don't check it enough, and we get the s--- end of the stick." Loiseau was arrested last year when he bought a car with a stolen engine at a sheriff's auction and resold it a day later to a customer who'd been hurt in a mugging. Cops investigating the attack inspected the car, discovered the stolen engine and accused Loiseau and his partner of illegally installing it. "I sold that car in one day," he said. "How can you put an engine in a car in one day? It's just impossible." Loiseau is still stuck in that legal battle and has a trial date set for Sept. 21. He has had plenty of other bad luck with police. Two years ago, he purchased a 1997 Jeep Cherokee at an auction in Queens for about $3,000. In February 2004 the car was confiscated by state cops after a DMV inspection revealed it to have been stolen. Cops then reauctioned the car a few months later, he said. "I went to an auction, and there it was," Loiseau said. "I was like, 'Hey, that's my car!' "It turned out it became the property of the state, so the stolen car they just took from me, they put a new VIN number on it, turned around and sold it." He asked the city for a refund on the SUV, which had a vehicle identification number that had been tampered with when he bought it. "They refused," he said. So he went to court and won a $3,000 judgment, but the city appealed and the matter hasn't been resolved. At least in that case, he didn't end up in jail. But one of his buyers did after Loiseau sold him a Chevy van he'd obtained at a police auction in 2002. A month later, the hapless motorist was pulled over and arrested for driving a stolen car. "He spent the night in jail," Loiseau said. "He came to me, and I said, 'Hey, I got this car from the police.' I gave him the bill of sale, and eventually it got worked out. He even got to keep the car. But it took a long while." Queens used-car buyer Barry Weisman thought he had a steal when he bought a dinged-up 1997 Lexus SUV for just $2,600 he did, but the wrong kind of steal. He believed the only problem with the luxury ride, other than some front-end damage, was a missing VIN number. It had only 12,000 miles on it and had sat in a police pound for six years. So he put in $1,000 to fix it up and submitted the car for a "salvage exam" a search by the state DMV done when a buyer wants to retitle his car. The Lexus turned out to have been stolen from an owner in Michigan. The state confiscated the car, and the cops refused to give Weisman a refund, citing a disclaimer that "all auction items are sold 'as is.' " They also argued that Weisman bought the car just for parts. He sued in Small Claims Court, where a lawyer for the city didn't deny that the car was hot. Still, an arbitrator ruled against Weisman. "Unfortunately, the Police Department is not adult enough to admit they made a mistake or has the decency to refund the purchase price," Weisman said. "The arbitrator said, 'I wonder whether the Police Department is under any obligation to investigate to determine the true VIN number of a the car.' "You don't have to answer that question. The fact remains that the car was stolen, and you cannot convey title to stolen property." The fixed-up Lexus eventually went back to Allstate Insurance, which had paid out on a theft claim, and the carrier resold the vehicle. Asked about the foul-up, a spokeswoman for the insurance giant said, "We have no idea what might have occurred with that vehicle." Weisman says he would have made his money back if he'd chopped up the car and sold it for parts and no one would ever have known it was stolen. He doesn't think police are selling stolen cars intentionally, but he's angry that dealers like him have no recourse when they buy a swiped vehicle. "The police made an honest mistake," he said. "But someone could very well have been arrested for this vehicle." Calls to a police spokesman were not returned.