The owner of the licensing agency at the center of the investigation said it must all be a mistake, but investigators say his employees have already admitted that they knew the vehicle paperwork was fraudulent.
Computers and records were confiscated at the Vehicle Licensing Office in White Center. The business handles state licensing, but is privately owned and operated by Neal Lockett.
"It's really awfully hard for me to comprehend, first of all." Lockett said. "I'm still in a state of shock since yesterday."
Lockett has operated the business for 27 years, but the state recently shut it down and two of Lockett's longtime employees have been arrested. They're accused of knowingly approving fake vehicle registrations.
"Very trusted people," Lockett said of the employees. "I never had a reason to doubt them."
Police say the employees admitted that they knew the paperwork they were submitting was fraudulent.
The Washington Auto Theft Authority Task Force points to T & C Premier Auto as the source of those fake documents. They claim owners Antonio Lopez Sr and his son, Antonio Jr, have been handling 1,000 transactions a year for as many as six years.
They allegedly helped car buyers get around paying the excise tax by making them look like the cars are gifts.
Police say that's costing taxpayers $500,000 a year in lost revenue. A customer who knows the Lopez family said the claims can't be true.
"Yes, these guys are good people. I don't believe they've done that," said a T & C customer named Eric.
A tipster put police on the dealership's trail while the state was looking at the licensing office.
"We looked at it together and we went 'Oh, wow, this is something. There's something going on here,'" said Lt. Tracy Grossnickle with the Federal Way Police Department.
Police claim the Lopez men were charging $400 for each transaction, and customers didn't know it was illegal. None of that money went to the licensing office employees, but they got bonuses from their employer, Mr. Lockett, for handling a large number of transactions.
The two owners of the car dealership and the two office employees were arrested and released. Police are still looking for third office employee. All three are facing fraud and conspiracy charges.