Towing Company Illegally Auctioned Troops’ Cars Including a Deployed Navy SEAL’s, Justice Department Alleges

Government court documents allege that as early as April 2019 Steve's Towing Inc. began a pattern of violating the Servicemembers Civil Relief Act.

By Jonathan Lehrfeld

A towing company in Virginia Beach, Virginia, illegally auctioned, sold or trashed the vehicles and personal belongings of at least seven U.S. service members, including two cars owned by a Navy SEAL deployed overseas, according to a lawsuit filed April 15 by the Justice Department.

Government court documents allege that as early as April 2019 Steve's Towing Inc. began a pattern of violating the Servicemembers Civil Relief Act, or SCRA, which guarantees certain financial and housing protections to active-duty members, when the company failed to recognize military ownership of multiple vehicles and obtain a court order before putting them up for bid.

Want to read more stories from Military.com? Download the Military.com News App today.

The DoJ is seeking damages for the Navy SEAL and the other impacted service members in a Virginia district court.

"The Department of Justice is taking action to ensure that all servicemembers harmed by unscrupulous actions receive just compensation," Assistant Attorney General Kristen Clarke of the department's civil rights division said in a press release.

This is not the first time the DoJ has come down on businesses for selling troops' vehicles in their absence. Towing companies must receive a court order to dispose of property owned by a service member during their military service, or for 90 days after they separate, thanks to the SCRA, which was enacted in 2003.

DoJ court documents identify an unnamed Navy petty officer first class from the elite SEAL Team 2, based at Joint Expeditionary Base Little Creek-Fort Story in Virginia Beach, Virginia, who parked his two cars in a lot across from headquarters while he was deployed overseas from roughly October 2019 to April 2020.

Both his 1992 Toyota Land Cruiser HZJ73 -- containing a duffel bag of military uniforms, plus a Navy challenge coin -- and his 1987 Toyota 4Runner had Arizona license plates and registrations, the state where his parents live.

Around Jan. 3, 2020, Steve's Towing towed the two vehicles, and about a month later filed with the Virginia Department of Motor Vehicles to take ownership of the property, shortly after purchasing both vehicles from itself for $500 each.

Although the car service company contacted the Virginia DMV, the state where the cars were collected, it reportedly did not do so in Arizona, where the vehicles were actually registered.

The filing on Friday came as a "complete shock" to Lee Gilliam, general manager at Steve's Towing.

"We love our military and would never auction off an active-duty military vehicle knowingly," Gilliam said in an interview.

The case was filed in the Eastern District Court of Virginia, Norfolk Division, and no court date has been set.

The DoJ advises service members and dependents who think their SCRA rights have been violated to reach out to their nearest Armed Forces Legal Assistance Program Office.

As of Monday afternoon Steve’s Towing had not been served the court paperwork, Gilliam said, but the company continues to tow vehicles for the military police.

-- Jonathan Lehrfeld is a fellow at Military.com. Follow him on Twitter @lehrfeld_media.