Industry groups and law enforcement officials are fighting to break apart organized retail theft rings that move from community to community and across state lines to steal merchandise for resale.
The problem, estimated to cost retailers more than $15 billion a year, was brought before Congress last month by groups like the National Retail Federation and the FBI, which are working together to curtail organized retail theft.
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“Organized retail theft is a growing problem because technology is more sophisticated, with the Internet and the networking equipment available that make it easy for thieves to keep in contact with one another,” said Joseph LaRocca, vice president of loss prevention for the National Retail Federation.
In a local case last month, Hopkinton police broke up an organized theft scam by arresting five Fall River and Brockton residents who were allegedly using counterfeit checks to buy items at chain stores in Rhode Island, Connecticut and Massachusetts.
The alleged criminals were pulled over for speeding by a Hopkinton police officer who then found numerous fake IDs and Wal-Mart bags with items purchased with what turned out to be false checks, police reports show.
Products like razors, toothbrushes, dental floss and prepaid phone cards were allegedly stolen and bought with the checks – items commonly stolen for resale. They are estimated to have stolen tens of thousands of dollars of merchandise from stores in the region since December of last year, which police presume was stolen for resale. The case is still under investigation.
In another case last year, Massachusetts State Police and investigators under Attorney General Tom Reilly’s office worked for months to uncover an organized theft ring that had been operating throughout New England. The investigation ended with the arrest of four people who were sentenced in Massachusetts in December for schemes to steal nearly $300,000 in retail merchandise, cash and store credits from retail chains in Rhode Island, Massachusetts, Connecticut and New York.
The leader of the ring would pay his conspirators between $40 and $200 per day for their work in various schemes and then re-sell the items, Reilly’s office reports.
Organized retail theft rings like this recruit gangs of shoplifters, give them lists of high-value items to steal from retailers, such as razor blades, batteries, over-the-counter drugs, infant formula and designer clothing, and sell the items for resale. Some organized retail theft rings collaborate with “fences” – retailers and wholesalers that buy stolen goods at a discount. Many of these items get sold at flea markets, out of the trunks of cars, on the streets and the Internet.
Retailers whose items are stolen ultimately make up for the loss by raising prices, and the public pays. Consumers are also harmed because many of these thefts involve consumable goods that are re-packaged and sold past their expiration date, LaRocca said.
Thefts occur wherever the best products can be stolen without getting caught. Small retailers that don’t have surveillance are targeted, and at big retail stores, shoplifters can hide among the masses while shoplifting, LaRocca said.
It is difficult to prosecute these thieves for major crimes because many times they steal items that don’t add up to much, and if caught working alone, they aren’t easily traced back to a bigger network of thieves.
Retailers who sell items with a high street value are working to prevent losses from organized theft rings by urging legislators to pass uniform laws for punishing these crimes.
“The problem is that in State A, stealing over $1,500 is considered a felony and in State B, over $500; so these thieves stay in State A where they can steal the most for the least punishment,” said Ernie Deyle, vice president of asset protection for Woonsocket-based CVS Corp. and chair of the Industry Loss Reduction Team, a group of major retailers and suppliers that organized two years ago to combat the growing theft problem.
The team will meet again in July and plan to move a number of anti-theft initiatives forward by the end of the year.
Legislation to make retail theft a federal crime has been introduced in Congress but has not passed. Legislation is expected to be introduced again in Congress this session.
Thefts are currently prosecuted under state shoplifting laws that treat such crimes as a petty misdemeanor. Making organized retail theft a federal crime would allow major theft rings to be punished in federal court with heftier sentences.
In Rhode Island, passing on counterfeit money, checks or designing false receipts is punishable by two to 10 years in prison, reports Michael Healey, public information officer for Rhode Island Attorney General Patrick Lynch.
The initiative launched by the National Retail Federation and the FBI last year.
