City Attorney David Chiu

Chiu suspends unscrupulous towing company after owners are charged with benefits fraud

Auto Towing business owners, who profited from illegally towing parked cars, were recently criminally charged in a welfare fraud scheme

SAN FRANCISCO (February 6, 2024) — City Attorney David Chiu announced today that he suspended Auto Towing and several affiliated individuals and companies. The suspended entities are now prohibited from bidding on or receiving City contracts. City Attorney Chiu previously initiated debarment proceedings against Auto Towing for illegally towing cars of vulnerable individuals from a private commercial parking lot, limiting the times vehicles could be retrieved, and pressuring vehicle owners to pay in cash. Since then, Auto Towing owners, Abigail Fuentes and Jose Badillo, have been criminally charged in a welfare fraud scheme.

City Attorney David Chiu
City Attorney David Chiu

“Auto Towing intentionally misled and scammed people out of hundreds of dollars by illegally towing cars and making them hard to retrieve,” said City Attorney Chiu. “Now we also know that they took advantage of the public and defrauded our safety net programs. Fuentes and Badillo have demonstrated a clear pattern of predatory behavior designed to enrich themselves at the expense of the most vulnerable among us. Our City has no interest in contracting with exploitative businesses engaged in illegal conduct.”

Abigail Fuentes and Jose Badillo jointly operated three towing businesses in San Francisco between 2018 and 2023. The three companies—Auto Towing, Jose’s Towing, and Specialty Towing and Recovery—generated over $2 million in gross annual income. Fuentes and Badillo also have a personal relationship and share multiple children.

In October 2023, the San Francisco District Attorney’s Office charged Fuentes and Badillo with multiple felonies stemming from an alleged welfare fraud scheme. For a period of time, Fuentes worked as a Human Services Agency Senior Eligibility Worker, where she approved applications for public welfare programs. Allegedly, Fuentes improperly approved Badillo’s application without disclosing that she had a personal relationship with Badillo.

Further, both Fuentes and Badillo allegedly lied about their substantial income and assets in order to receive public benefits they were not eligible for. Fuentes and Badillo both received benefits under Medi-Cal, and Fuentes received additional benefits from CalFresh and CalWORKs.

In August 2023, the City Attorney initiated debarment proceedings against Auto Towing after the company violated multiple state and local laws by illegally towing vehicles from private property. Between February and May 2023, Auto Towing employees illegally towed several cars from a bank parking lot in the Portola neighborhood without the permission of the property owner. It is unlawful for a tow company to tow a car from private property without the consent of the property owner.

Auto Towing also made it difficult for vehicle owners to retrieve their vehicles, restricted the hours when vehicles could be retrieved, and pressured vehicle owners to pay in cash. Under the California Vehicle Code, vehicle owners have the right to retrieve their vehicles 24 hours a day, any day of the year, and have the right to pay with cash or major credit card. The victims whose cars were towed were primarily Spanish- and Cantonese-speaking residents, who are especially vulnerable to predatory tows.

Debarment is an administrative enforcement procedure that authorizes the City to ban contractors from applying for or receiving City contracts for up to five years. The debarment process can take time and sometimes requires an administrative hearing before contractors accused of misconduct are prohibited from receiving City funds.

In order to give the City more tools to immediately address corrupt contractors, San Francisco passed legislation in 2020 that, among other things, allows the City to suspend contractors accused of certain crimes relevant to their ability to receive City funding. Suspension immediately bars the contractors from receiving City funds while the separate proceeding is ongoing. Now that the owners of Auto Towing have been criminally charged, the City Attorney is able to suspend them and immediately bar them from receiving City contracts or grants while the criminal case gets resolved.

On February 2, 2024, the City Attorney filed the suspension order, which encompasses the following individuals and companies:

  • Auto Towing, LLC
  • Abigail Fuentes
  • Juan Fuentes, CEO of Auto Towing
  • Jose Badillo
  • Jose’s Towing, LLC
  • Specialty Towing and Recovery, Inc.

In March 2023, Auto Towing submitted a bid for a City contract to provide as-needed towing services and roadside assistance for City-owned vehicles and SFMTA buses, but was not awarded the contract.

The suspension order can be found here.