Imagine deploying overseas to put your life on the line, only to return home to Southern California and find your car is gone. It wasn’t stolen by a street thief. Instead, a local business towed it, ignored federal law, and sold it to the highest bidder.
This is the exact reality faced by dozens of Marines and sailors at Camp Pendleton. A San Clemente-based towing company recently agreed to a $160,000 settlement with the Justice Department. The feds accused S&K Towing Inc. of illegally selling service members' vehicles while those troops were serving their country.
The details of this case are incredibly frustrating. They point to a much larger, systemic problem with how predatory businesses treat active-duty military personnel. This is not just a story about a single bad actor in Orange County. It is a wake-up call about how easily the legal protections of our military can be trampled when nobody is looking.
The shocking details of the S&K Towing settlement
The Department of Justice filed its lawsuit in the U.S. District Court for the Central District of California on March 25, 2026. The complaint laid out a pattern of behavior that spanned nearly five years, from August 2020 through April 2025. During this window, S&K Towing allegedly auctioned off or scrapped up to 148 vehicles belonging to active-duty military members without obtaining the required court orders.
Many of these vehicles were hauled directly from Marine Corps Base Camp Pendleton. S&K Towing had a formal agreement with the base to handle tow requests initiated by base military police. They were trusted to operate on the installation, and their contract explicitly required them to follow all federal and state laws. They chose to ignore those rules.
When cars were towed, S&K Towing did not bother to check if the owners were active-duty military. They did not run names through the Department of Defense’s free, easily accessible database. They did not check vehicle registrations, even when those registrations clearly listed barracks or on-base addresses. In some cases, the cars they auctioned still contained military uniforms, specialized equipment, and personal military awards. It is hard to argue you did not know the owner was a service member when their combat gear is sitting in the back seat.
The financial penalty is relatively light. S&K Towing agreed to pay $160,000 to resolve the lawsuit, which will go toward compensating the victimized service members. The company is also in the process of completely shutting down its operations. They agreed that if they ever decide to open another towing or storage business, they must adopt strict policies to comply with federal military protections.
The infuriating reality of the We do this all the time attitude
Perhaps the most damning part of the entire investigation is how S&K Towing responded when they were caught.
In May 2024, a Military Legal Assistance attorney at Camp Pendleton discovered what was happening. The attorney contacted S&K Towing by phone and letter, explaining in detail that selling these vehicles without a court order violated federal law.
The response from an S&K Towing manager was incredibly bold. He reportedly told the military attorney, "We do this all the time".
Let that sink in. A business owner operating on a military base, serving military personnel, admitted to systematically violating federal law as a standard operating procedure. Even worse, the company did not stop after being warned. They kept auctioning and scrapping military members' cars without court approval anyway.
This tells us everything we need to know. S&K Towing did not make an honest mistake. They did not get tripped up by complex paperwork. They knew the law, they knew they were violating it, and they simply did not care because they assumed they would never be held accountable.
Why the Servicemembers Civil Relief Act exists
To understand why this is such a major issue, you have to look at the law that S&K Towing violated. The Servicemembers Civil Relief Act (SCRA) is a federal law designed to ease the financial and legal burdens on military personnel when they are called to active duty.
When a Marine is deployed on a ship or sent to a combat zone, they cannot defend themselves in local civil court. They cannot show up to a lien sale. They cannot negotiate with a predatory tow yard that is racking up daily storage fees.
The SCRA steps in to level the playing field. Section 3958 of the act is very clear. It states that any person holding a lien on the property of a servicemember—including towing liens, storage liens, or mechanics' liens—cannot foreclose or enforce that lien without first getting a court order.
Normal Towing Process:
[Vehicle Towed] -> [Storage Fees Pile Up] -> [Lien Sale/Auction under State Law]
SCRA-Protected Process:
[Vehicle Towed] -> [Identify Military Status] -> [Apply for Court Order] -> [Judge Reviews Case] -> [Approved Sale OR Delayed Action]
When a towing company goes to court to get this order, a judge looks at the situation. The judge has the power to stay (pause) the proceedings or adjust the amount of the lien to protect the service member while they are deployed. It prevents predatory businesses from taking advantage of a soldier's absence. S&K Towing bypassed this entire judicial guardrail.
A widespread industry problem
If you think S&K Towing is an isolated incident, you are mistaken. This is a quiet, highly profitable racket that happens across the country.
Just a few months ago, in May 2026, the Justice Department settled a remarkably similar lawsuit against a San Antonio-based towing company called Management Solutions Inc. (operating as VMS). That company agreed to pay $280,000 to resolve allegations that they illegally sold or scrapped 93 vehicles owned by service members. In that case, the investigation started after a deployed soldier returned from Kosovo only to find his car had been towed and auctioned off.
Since 2011, the Justice Department's Civil Rights Division has recovered more than $489 million in monetary relief for over 152,000 service members under the SCRA. Think about that number. Hundreds of millions of dollars taken from our troops by banks, landlords, lenders, and tow yards who figured the troops were too busy or too far away to fight back.
Towing companies rely on local state laws that allow rapid-fire lien sales. In California, if a car is left unclaimed, a tow yard can quickly file for a lien sale to recoup towing and storage fees. It is a fast, automated system designed to clear out abandoned junkers. But federal law always trumps state law. The moment a vehicle belongs to an active-duty service member, those state-level fast-track rules are completely paused. The tow yard must pump the brakes and get a federal or state judge's signature.
How service members can protect their vehicles
If you are active-duty military, or if you have a family member preparing for deployment, you cannot assume that local businesses will respect federal law on their own. You have to take proactive steps to guard your property.
- Update your registration details. Never leave your vehicle registration pointing to an old address. If you live on base or in the barracks, make sure your DMV records reflect that. S&K Towing ignored on-base registration addresses, but having this on file makes a future lawsuit against a predatory company open-and-shut.
- Use the SCRA website. You or your family can check your own active-duty status on the official defense database. Keep a printout of your active-duty status in your glove box or with your vehicle's title documents.
- Assign a Power of Attorney. Before deploying, designate a trusted family member or friend with a specific Power of Attorney to manage your vehicle. If it gets towed, they have the legal authority to act immediately, contact military legal assistance, and confront the towing company.
- Take immediate legal action. If your vehicle is towed or threatened with a lien sale, do not try to argue with the tow yard manager yourself. Contact the nearest Armed Forces Legal Assistance Program Office immediately. You can find your local office using the military locator at legalassistance.law.af.mil.
If you believe a towing company or any other creditor has violated your rights, report it. The Justice Department relies on reports from military legal assistance offices to build these cases. Your report could be the catalyst that stops a predatory business from exploiting your fellow service members.
