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I let someone borrow my car, and the title was in the car. They stole the title and signed it over to themselves and registered the car.

Although the police acknowledge a forgery occurred (if this is true), they say that the DMV is a magical godlike entity that decides the law therefore it is not a criminal offense but a civil issue. Is this correct?

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    I'm not sure what the police said, but they may be saying that it is the DMV's responsibility to determine that the title was (potentially) forged and to recommend charges. Otherwise it is a civil case (he-said/she-said) that you need to take up in court. BTW, you should never leave your title in your car. – Ron Beyer Apr 8 at 19:09
  • It is not he said/she said, you can test the title for fingerprints and also get a expert to prove the signature is fake. Furthermore there is no bill of sale so it cannot be legitimate. – user30887 Apr 8 at 20:02
  • What would "testing the title for fingerprints" do? In either a fraudulent sale or a legitimate one, it would have both your fingerprints anyway. They could also have forged a bill of sale (which supposedly they would need) just as easily as they forged the title... – Ron Beyer Apr 8 at 21:02
  • I doubt they are smart enough, and they stole my mail with the title in it which is a separate issue – user30887 Apr 8 at 21:38
  • If I understand you correctly, this forgery is a crime, you are just trying to interpret what the officer is saying. – user30887 Apr 9 at 2:27
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This is a case of "the wrong police". If someone hotwires your car and drives away, the local police will investigate and make a recommendation to the prosecution. This is a case of document fraud, investigated by the DMV's Compliance Enforcement Division. Here is the form where you would report the forgery. This does not preclude filing a report with local police, though they may insist that you file in person, and may resist taking a complete report since ultimately the issue is investigated by CED. If an officer refuses to take a report of a crime, you can always file a complaint with a superior officer. If it is within the officer's discretion to refuse to take the report, they will just dismiss your complaint against the officer.

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