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The city’s inspector-general outlined alarming scenarios that veer straight into a zone of lawlessness: Tow-truck drivers running drug trafficking and money-laundering gigs on the side; operators stashing weapons in their vehicles; and consumers being bilked by paying up to eight times the going rate for tows.FÉLIX O. J. FOURNIER

The Hells Angels and other criminal groups control large parts of Montreal's towing industry and have spawned a reign of violence, vandalism and intimidation on the roads, according to a city report.

The city's inspector-general outlined alarming scenarios that veer straight into a zone of lawlessness: Tow-truck drivers running drug trafficking and money-laundering gigs on the side; operators stashing weapons in their vehicles; and consumers being bilked by paying up to eight times the going rate for tows.

"Some sectors are even designated by entrepreneurs as the 'Wild Wild West,'" the inspector-general, Denis Gallant, said in his report made public Monday.

The findings suggest that Montreal has yet to emerge from its struggles against the scourge of corruption that dogged it for years. Some tow-truck owners benefiting from city contracts are themselves directly associated with organized crime or connected through friends and family, the report says.

"The investigation of the inspector-general highlighted the fact that individuals linked to criminal organizations, such as the Hells Angels, Italian Mafia or street gangs, have been – and remain today – present in the world of towing and are operating on the territory of the City of Montreal," says the report from Montreal's Bureau de l'inspecteur général, often referred to as BIG.

Some elements in the report raise eyebrows for their sheer audacity. The owner of several towing firms is a known founder of a biker club linked to the Hells Angels and is in jail on drug and weapons charges, it says. Some towing entrepreneurs openly wear their criminal biker insignia. Some witnesses recounted intimidation tactics such as having up to five tow trucks circle an unco-operative competitor's vehicle to send a message.

Mr. Gallant interviewed more than 70 entrepreneurs in the towing business and virtually all said that companies protected by criminal groups controlled the portion of the industry involved in towing vehicles damaged in accidents.

The situation emerged after a period in the late 1990s and early 2000s known as the "towing war," which featured torched trucks and roughed-up drivers in the fight to control territory, the inspector-general said. In the wake of the hostilities, firms carved up territory in Montreal.

In one case, an operator admitted paying $500 to $700 a week to the Hells Angels to ensure he'd get protection to secure his territory. In effect, the report said, organized crime is in charge of who gets to operate where and imposes its will on the industry.

The problem has become exacerbated since February, 2016, when the city ceased awarding exclusive towing contracts, he wrote. Some entrepreneurs have pulled out of the business or chosen to look outside Montreal altogether, leading to a decrease in competition.

Consumers end up paying the cost: In one case, a vehicle owner was charged $488 to be towed less than five kilometres, a haul that would have cost about $105 had the towing company had an exclusive contract, the report says.

Alex Norris, public-security critic at city hall for the opposition Projet Montréal party, says problems in the towing industry have been an open secret for years and underscore corruption in the city.

"There is ample evidence that corruption remains rife in some key sectors of the city, notably towing," Mr. Norris said in an interview. "The battle against corruption has not been won by any means. Public contracting at city hall is far from squeaky clean and the mayor has not done all that's required to clean things up."

Denis Coderre, who set up the inspector-general's office when he became mayor, said the findings are "very worrisome" but added that city hall has already taken steps to clean up the towing industry. Among other measures, the city requested in 2016 that responsibility for towing be transferred to the police department, he said.

"Whether it's organized crime or anything else, we'll be sure to take adequate steps to protect the interests of Montrealers," he told reporters at City Hall.