Chop shops are illegal automobile garages that buy stolen cars, disassemble them, and sell the individual parts for a profit. Chop shops often disassemble a car within hours of purchasing it from the thief who stole it—making it difficult for the police and the rightful owner to find the stolen vehicle. Chop shops are often operated in residential garages and small commercial spaces to avoid detection, but are usually part of a large criminal network or organization.

It is a crime under federal law (18 U.S.C. § 2322) to knowingly own, operate, maintain, or control a chop shop. There are significant fines and penalties under federal law for operating a chop shop—up to 15 years imprisonment for a first conviction, with the maximum fine and imprisonment doubled for any subsequent conviction.

States also have criminal laws (located in the penal or criminal code or statutes) that prohibit the operation of a chop shop. An offender may be prosecuted under state chop shop laws in addition to a federal prosecution, or instead of a federal prosecution.

In Texas, operating a 'chop shop' is a criminal offense under both federal and state law. Under federal law, specifically 18 U.S.C. § 2322, it is illegal to knowingly own, operate, maintain, or control a chop shop, with penalties including up to 15 years imprisonment for a first conviction and potential doubling of fines and imprisonment for subsequent convictions. Texas state law also criminalizes the operation of chop shops, and these laws are found within the Texas Penal Code. The state statutes address offenses related to the theft of motor vehicles, the receipt or possession of stolen vehicles, and the unauthorized use of a vehicle, all of which can be applied to the activities of chop shops. Violators can face severe penalties, including imprisonment, fines, and forfeiture of property. Offenders may be prosecuted under Texas state law either in addition to or instead of federal prosecution, depending on the specifics of the case and the discretion of law enforcement agencies.