A supersized limousine that crashed and killed 20 people had failed a safety inspection last month and should not have been on the road, and the driver was not properly licensed, New York’s governor has said.

The state moved to shut down the owner, Prestige Limousine, as state and federal authorities investigated the cause of Saturday’s wreck in Schoharie.

The company said it was taking its cars off the road while conducting its own probe into the crash.

The crash, about 170 miles north of New York City, came three years after another deadly stretch limo wreck in New York state spurred calls for governor Andrew Cuomo to examine such vehicles’ safety. There is no evidence the state took any steps to do so.

As victims’ relatives tried to come to grips with the tragedy that happened as a group of friends and family were on their way to a 30th birthday party, authorities had yet to say how fast the limo was going or determine what caused it to run a stop sign.

Friends of victims at the scene
Friends of victims at the scene (Hans Pennink/AP)

The 19-seater vehicle had some seatbelts, but it was unclear whether anyone was wearing them, National Transportation Safety Board chairman Robert Sumwalt said.

Investigators plan to examine the mangled limo’s data recorders and mechanical systems as well as the road, which has a history as a danger spot.

They are also looking into the driver’s record and qualifications and conducting a post-mortem to see if drugs or alcohol were factors.

Mr Cuomo said: “The driver didn’t have the necessary commercial licence, and the vehicle failed a state inspection that examined such things as the chassis, suspension and brakes.

“In my opinion, the owner of this company had no business putting a failed vehicle on the road. Prestige has a lot of questions to answer.”

He also said the limo — built by cutting apart a heavy-duty SUV and lengthening it — had been created without federal certification, though NTSB officials said they had not yet determined whether the vehicle met federal standards.

Prestige Limousine issued a statement on Monday expressing condolences to victims’ families and saying it was conducting “a detailed internal investigation”, while also meeting with state and federal authorities, according to The New York Times.

The Gansevoort, New York-based company said it pulled its cars from the road voluntarily. But state police say they seized four Prestige cars, including the one that crashed.

Federal records show Prestige has undergone five inspections in the past two years and had four vehicles pulled from service.

Federal transportation records show Prestige is owned by Shahed Hussain, who worked as an informant for the FBI after the September 11 attacks, infiltrating Muslim groups by posing as a terrorist sympathiser in at least three investigations.

In one case, he helped convict men accused of plotting to bomb New York synagogues.

His role at the FBI was attacked by civil liberties groups, who accused him of helping the FBI entrap people.

Asked on Monday about Mr Hussain, the FBI said it would not confirm or deny who is or is not an informant.

The limousine, built from a 2001 Ford Excursion, ran a stop sign at a T-junction at the bottom of a hill and slammed into an unoccupied SUV at the Apple Barrel Country Store and Cafe.

Investigators have yet to determine whether the driver, whose name has not been released, tried to brake.

The wreck killed two pedestrians and all 18 people in the limousine, including four sisters who were heading with friends and relatives to a brewery for a party for one of the sisters.

The four sisters’ aunt, Barbara Douglas, said they had felt “they did the responsible thing getting a limo so they wouldn’t have to drive anywhere”.

Amanda Halse
Amanda Halse and boyfriend Patrick Cushing (Karina Halse/AP)

“My heart is sunken. It’s in a place where I’ve never felt this type of pain before,” said Karina Halse, who lost her 26-year-old sister Amanda.

More than 1,000 people jammed into a park in Amsterdam to honour the victims and their families on Monday night.

“We are crushed with you. We are crushed for you,” US Representative Paul Tonko told a crowd that spilled on to a bridge spanning the Mohawk River.

Some relatives shed tears as a woman sang Amazing Grace. The ceremony ended with everyone lifting their candles above their heads in unity.

Limousine Crash
Family members and friends gather for a candlelight vigil memorial (Hans Pennink/AP)

The crash appeared to be the deadliest land-vehicle accident in the US since a bus full of Texas nursing home patients fleeing 2005’s Hurricane Rita caught fire, killing 23.

It was also the nation’s deadliest transportation accident of any kind since a 2009 plane crash near Buffalo, New York, killed 50 people.

Ford said it has never made its own stretch version of the Excursion. The company did certify outside companies to modify them to Ford specifications for up to 14 seats during the 2001 model year, but it was not clear who modified the SUV that crashed Saturday.

“At this time, Ford does not have any information about the vehicle involved in this accident, but we are ready to cooperate with agencies who are investigating,” the company said in a statement.