Frank Ozga did not consider the Philadelphia court system a joke.

Yet, every time the admitted chop-shop operator was hauled before a local judge to face such charges as receiving stolen property or altering automobile serial numbers, he walked out a free man. It happened to Ozga and his business partners a half-dozen times during 1996 and '97.

Police raids on two salvage yards owned by Ozga, a Somerton resident, and Patrick Smith Sr., of Hammonton, N.J., in those years yielded numerous pieces of implicating evidence, such as stolen cars and parts, as well as cutting torches and hoses used in chop shops.

Still, Ozga knew he probably wasn't going to jail. And if he did, it wouldn't be for very long. The cops knew it, too.

"(Police investigators) knew Ozga was a thief. They knew what he was doing," said Capt. Jack McGinnis, who in October 1997 was appointed by then-Police Commissioner Richard Neal to command the department's major crimes division.

"(In court) nothing was really occurring. There were no real penalties for what they were doing. (Police) would go in and find stolen parts or find them in the process of chopping cars. They would charge them . . . (but) they stayed in operation. It was a temporary inconvenience."

WHAT A FINE MESS

According to McGinnis, who spoke to the Northeast Times last week following the federal indictment of 50 people allegedly involved in the chop-shop business -- including some allegedly connected directly with Ozga and Smith -- the partners might as well have considered attorney's fees and fines as overhead, the cost of doing business.

Considering the profitability of the stolen-auto parts business, "It was very cheap for them," McGinnis said.

To this day, five months after he pleaded guilty to five federal crimes related to the chop-shop business, money laundering and tax fraud, Ozga agrees that he might never have been brought to justice had federal investigators not gotten involved. He believes that local authorities simply weren't getting the job done.

"The local police don't take care of it. They don't follow through with anything," Ozga said last week from his Southampton Road home, where he spends his days under house arrest while awaiting a sentencing hearing.

Unlike Smith, who is in prison, Ozga wears an electronic monitoring device around his ankle.

Prior to the chop-shop convictions, he had no criminal record. Now, he is facing a possible 88-year prison sentence, $2.5 million fine and forfeiture of property, including his home, according to documents provided by the U.S. Attorney's Office.

He is permitted to leave his residence only for doctor visits, meetings with his lawyer and court appearances.

Ozga was busted in August 1999 as part of the first round of federal indictments stemming from an ongoing investigation of Philadelphia's auto-parts black market.

According to the charges, two Frankford salvage yards owned by Ozga and Smith handled tens of millions of dollars worth of stolen vehicles over a nine-year period beginning in 1991.

WHAT A RACKET

Essentially, authorities say, the racket works like this: a body shop calls the salvage yard to place an order for specific parts off of a particular vehicle. The salvage yard calls the thieves, who find and steal the specific make and model of the car required.

The car is brought to the salvage yard or another location, such as a garage, where it is torn apart, piece-by-piece. The "chop" can take as little as 20 minutes, McGinnis said.

The process includes removal of vehicle identification numbers -- which essentially is the fingerprint of the stolen car -- from various parts. Then the salvage yard ships the requested parts to the body shop.

Sometimes, the salvage yard keeps the leftover parts in stock. Ozga did, McGinnis said.

"Ozga was like a whaler. He used every part of that car," McGinnis said. "And the shell that was left, he would shred it up and use it as scrap."

The participants maintained close contact through a network of speaker phones called an "Elite Line." The systems can connect more than 100 offices at once with the push of a button. Orders were placed on the system, often in a verbal "code," McGinnis said.

BIG THREE NETWORKS

Such networks have been used by the auto-repair industry for decades, Ozga said. He had three networks feeding into his office with a combined 260 members. Many dealt in illegal parts, but many others didn't, he said.

According to Ozga, those shops wishing to stay "legitimate" knew what was going on with illegal parts. They could hear it on the speakers. But they wouldn't deal with those engaged in the illegal trade.

According to McGinnis, the participants in the illegal organization benefited from high profit margins on the stolen goods. A thief might get $300 from a chop shop for a stolen car. The shop would package the entire body of the car and sell it to the salvage yard for $1,500, then get hundreds more from another customer for the engine and transmission.

The salvage yard could sell the front end of the car to the body shop for $1,500, leaving the rear end, side panels, doors and other parts for profit.

The division of labor isn't always as such, however. Often, the salvage yards run their own chop shops, or the chop shops deal directly with the body shops, according to Ozga, who admits buying and selling the stolen parts but denies running his own chop shop.

Although described by authorities as an organization, the stolen-parts business differs from other crime syndicates. There is no true hierarchy and no "muscle" involved.

HOLDING THE PUNCHES

"We're talking about organized crime without the violence," said Assistant U.S. Attorney Robert Reed, the lead prosecutor in the chop-shop investigation. "These were businesses. There were workers. They were paid wages. There were shifts and (production) expectations. There were Christmas bonuses.

"It was a corrupt shadow economy."

Many agencies on the federal, state and local level have participated in the probe, including the FBI and the Philadelphia Police Department. More than 40 defendants, including Ozga, have been charged and convicted. All pleaded guilty before taking their cases to trial. Last week's indictments brought the total number of people charged to more than 90.

Although McGinnis concedes that Philadelphia police faced many limitations in building cases against the chop-shop operators, the local police were crucial, by all accounts, in getting the investigation off the ground.

When McGinnis took over major crimes, local auto-theft tallies were soaring off the charts. There were almost 24,000 reported in 1996.

"One of the tasks that I had was to reduce auto theft," the captain said.

Major crimes drafted a list of seven strategies for auto-theft reduction in the city. No. 1 was to eliminate the practice of detectives taking stolen-car reports over the telephone without visiting the scene.

"That sort of made Philadelphia the insurance (fraud) capital of the world," McGinnis said, explaining that very little was done to investigate claims by car owners or those who lease that their vehicles had been ripped off.

A MATTER OF COURSE

In 1998, Police Commissioner John Timoney, who replaced Neal that year, authorized a program to teach plainclothes officers how to investigate the alleged crimes in person. Now, 50 officers receive the 24-hour course every month. The program is taught by major crimes detectives.

"A police officer (should not be) a report taker. You can hire a civilian for that," McGinnis said. "A police officer is one who goes out and does a preliminary investigation."

Before the training began, police recovered just one car for every two reported stolen, McGinnis said. Now, the recovery rate on stolen cars is 106 percent: 89 percent of Philadelphia's stolen cars are recovered here, another 17 percent are cars reported stolen from other jurisdictions.

Another strategy laid out by McGinnis' unit was to develop partnerships and exchange information among the six geographically based detective divisions within the police department, as well as among municipal, state and federal authorities throughout the region.

Technologywise, the major crimes auto squad was the first unit to participate in the computer crime mapping program that was introduced by Timoney shortly after his arrival in Philadelphia.

Using data supplied by the mapping unit, as well as information obtained from actual reports, the auto squad now maintains a computer database of all auto thefts. Variables include locations of the theft and recovery, type of vehicle and condition in which it is found.

NUMBERS ARE DOWN

This "smarter policing" helped drive a downward trend in the city's auto theft rate. The total dropped to 22,500 in 1997 and 19,500 in 1998, but local authorities still weren't able to snag the big fish.

According to Reed, the U.S. attorney, the Internal Revenue Service was actually the first federal agency to develop an interest in Ozga, Smith and their two salvage yards -- A-OK Auto Parts, at 2520 Orthodox St., and Frankford Auto Salvage, at 4235 Leiper St. That began as far back as 1995.

The FBI picked up the case in 1997.

"A-OK and Frankford Auto Salvage had been searched numerous times (by local authorities). I don't think the people who are now convicted chop-shop operators took it seriously then," Reed said.

The FBI used informants to build the foundation of its investigation.

"We had a lot of people assisting us," Reed said. "Informants told us that A-OK and Frankford Auto Salvage never did anything legitimate. That was our starting point."

Ozga contends that trade in stolen vehicle parts was only a portion of his otherwise legitimate businesses. Ozga says he ordered "maybe two (stolen cars) a week and sometimes not that many."

Most of the illegal cars that came through his yard were actually given to him as part of insurance-fraud schemes, he contends. Of the 50 people charged last week, 16 are accused of the insurance-fraud scam.

COMMON THREADS

According to McGinnis, there are several common motives for the crime. For some, it's a way of escaping a costly end-of-lease bill for excess mileage. In other cases, it's a way for the person to escape an auto-loan obligation he cannot afford.

The investigation of Ozga and Smith led the FBI to other similar operations in the region.

"Essentially, you had four chop shops operating independently," Reed said, referring to the August 1999 indictments. "Nobody went to trial. There were forty convictions. Everybody (except one defendant) pleaded guilty to at least one count of conspiracy and operating a chop shop."

Said Ozga: "A lot of those people had nothing to do with me."

He and Smith also admitted to money laundering and filing false tax returns. Reed said that both Ozga and Smith failed to file personal tax returns, and corporate returns that they filed were fraudulent.

Authorities say that the partners concealed $1.2 million in illegal income from the venture from 1991 to 1995.

Ozga doesn't dispute the figure, but contends that much of the money went toward business expenses, including a mortgage on the salvage yards and insurance.

He says that the people who chopped the cars and operated out of small garages were the ones making the "real money" because they had minimal expenses.

He believes that the money will continue to drive similar car- theft organizations in the future, although the indictments have caused many thieves and chop-shop operators to cool it for now.

"If it wasn't for the feds, it wouldn't make a difference," Ozga said. "But once they end the investigation, it'll come back."

According to Reed and McGinnis, there are no current plans to shut down the investigation.