Three years after the State Commission of Investigation issued a scathing report detailing deceitful and sometimes fraudulent behavior at multi-dealer used-car malls, the business practice remains plagued by "unscrupulous activity," the commission said in a new report Tuesday.

Dealers at auto malls throughout the state have continued to engage in activity ranging from selling dangerously unroadworthy salvaged vehicles to "renting" dealer license credentials on the black market, according to the commission's follow-up report.

Investigators say the behavior has been bolstered by an environment in which family members obtain dealer licenses on behalf of relatives ineligible to receive them, and salvage vehicles are rubber-stamped with "phantom" inspections in Pennsylvania before being resold in New Jersey.

Many of the vehicles are sold without clean titles, leaving buyers waiting months before they're able to legally register their purchases, the report says.

The 2015 report had focused primarily on the New Jersey Dealers Auto Mall, a Bridgeton-based business the SCI said leased space to absentee car dealers to allow them to meet New Jersey's dealer licensing requirements.

In the wake of the report, which highlighted the mall owners' employment of a former Division of Motor Vehicles director to lobby the state Motor Vehicle Commission (MVC), the state's election watchdog agency mandated electronic filing of quarterly disclosure reports by government lobbyists.

The new report offers more sharp criticism of the MVC, which the SCI says undermined some of its own regulatory improvements -- which included hiring more licensing investigators -- by allowing tenant businesses at multi-dealer lots to circumvent certain rules.

"The agency also lacks written guidelines for handling disciplinary action against used-car dealers who violate rules and regulations, relying instead on informal judgment calls by staff," the report says.

The criticisms are far from new. In their 2015 report, state investigators described the MVC as "an enabler of some very troubling business as usual."

Among other reforms, the SCI's new report recommends the Legislature pass stronger consumer protections for buyers of "as-is" used vehicles and that the MVC begin requiring in-state inspection of salvage vehicles before issuing titles.

Thomas Moriarty may be reached at tmoriarty@njadvancemedia.com. Follow him on Twitter at @ThomasDMoriarty. Find NJ.com on Facebook.

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