On Thursday morning the U.S. Congress, House Subcommittee on Crime, Terrorism, and Homeland Security will hear from federal law enforcement officials regarding organized retail crime investigations. Witnesses from the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement, U.S. Secret Service and U.S. Postal Inspection Service are scheduled to testify.
Each of these agencies understand the problem of organized retail crime. There are too many examples to list, but the story is all too familiar. Professional criminals get away with billions of stolen and fraudulently obtained goods each year. Local, State and Federal law enforcement officials working side-by-side with retailers conduct lengthy and expensive investigations to recover a portion of the goods but criminals’ penalties are often limited.
Here is a sample of some of the most recent ORC incidents:
- Earlier this month following an extensive investigation by ICE agents, Hassan Swaid was sentenced to 78 months in prison for conspiring to purchase stolen merchandise from major retailers and shipping the stolen goods to out of state customers, and for structuring his finances to avoid currency transaction reports.
- In June, following an investigation by the FBI and USPIS, John Chass admitted that he was the leader and organizer of a conspiracy to commit wire fraud and to transport stolen property across state lines from February 2005 through December 2007. Chass recruited a group of “boosters,” who would steal merchandise from retail stores and deliver it to Chass, who paid the boosters for the stolen merchandise based upon a percentage of its retail value. Chass then advertised the stolen merchandise on his eBay website known as “stairway to the stars.”
- Also in June, the USSS arrested a woman for stealing credit card information since January 2008 as a supervisor in live answering service based in Riverside, California, and purchasing thousands of dollars in merchandise she then sold on eBay. (The Secret Service is known for protecting the President, but its duties also include safeguarding the payment and financial systems of the United States.)
This is the third hearing in the House of Representatives. In October 2007 and September 2008, retail and local law enforcement testified in support of tough new laws designed to deter and punish major offenders for stealing and fraudulently obtaining merchandise, then selling these goods on street corners, at pawn shops, flea markets and over the internet, using online marketplaces.
The legislation was met with stiff opposition from eBay and online marketplace lobbyists, claiming retailers were to blame due to employee theft or not spending enough on security. They also accused the retail industry of simply being afraid of the online competition.
While I’m encouraged eBay investigators are now answering the phone for select retailers, they continue to profit from each stolen item sold. Simply taking phone calls is far from the “partnership” needed to solve this problem. I hope to see the day when suspected cases are proactively called out to retail investigators and law enforcement while tough new laws either discourage or dismantle professional theft rings nationwide.
While retailers lose billions of dollars a year to organized retail crime, shoppers lose, too. Today, NRF released a warning to consumers of specific products found in retail stores nationwide that are being targeted by organized retail crime rings. When stolen, these items can pose health risks to shoppers, and consumers are left with no way to ensure they are getting the quality they paid for.
To manage expectations, this hearing is a positive step in the process of securing new federal legislation, however we still have a long way to go.
If you are interested in listening to the hearing, it will be webcast live.