Compliance scorecard

Foiling organized retail theft


Law enforcement in central Florida recently shut down an elaborate retail theft ring responsible for shoplifting thousands of cans of powdered baby formula. Twenty-one suspects were arrested for stealing from six different counties and transporting the loot out of state.

It is just one example of the rampant growth of organized retail crime despite the best efforts of state and local law enforcement authorities - particularly as police budgets are trimmed. Some 72 percent of respondents to a December 2008 survey by the Retail Industry Leaders Association (RILA) say they see an increase in organized retail crime. "Anonymity of the Internet enables the fencing of stolen goods throughout the world," says Casey Chroust, RILA executive vice president, retail operations. "Thieves are encouraged by the higher return on investment compared to selling them at a pawn shop or flea market."

"This is not your average Joe who runs in to steal a pack of gum," Chroust adds. "These are large, sophisticated crime rings that are moving from store to store. There are cases when someone is apprehended in a parking lot, and there are thousands of dollars of merchandise from various stores in their car."

Impact on a local community includes the toll of additional crimes that are financed by the proceeds, loss of billions of dollars in tax revenue, and public health risks emanating from the danger of using products - from infant formula to diabetic test strips - that may have been mishandled, stored in improper conditions or relabeled with new expiration dates.

Several bills introduced in Congress in 2009 - three in the House and one in the Senate - seek to increase penalties, facilitate enforcement and put proactive measures in place to prevent sale and transportation of stolen merchandise across all channels, including the Internet:

- The E-fencing Enforcement Act of 2009 (HR 1166), introduced by Chairman Robert C. "Bobby" Scott (D-Va.), would impose reasonable duties on online marketplaces when there is a good reason to believe that items listed for sale were acquired illegally.

- The Organized Retail Crime Act of 2009 (HR 1173), introduced by Rep. Brad Ellsworth (D.-Ind.), modifies the federal criminal code to include organized retail crime activities and makes their facilitation a crime; it also imposes practical reporting requirements.

- The Organized Retail Crime Prevention and Enforcement Act of 2009 (HR 4011), introduced by Rep. Lamar Smith (R-Tex.) and Rep. Robert Goodlatte (R-Va.), modifies Federal law to cover "whoever transports, transmits or transfers in interstate or foreign commerce any goods, wares or merchandise [valued at $1,000 or more] for sale on an online marketplace, knowing the goods have been stolen, converted or taken by fraud."

- The Combating Organized Retail Crime Act of 2009 (S 470), introduced by Sen. Dick Durbin (D-Ill.), would clarify existing law to give law enforcement the tools to fight organized retail crime, require online and off-line marketplaces to investigate suspicious sales, and place basic disclosure requirements on online marketplaces.

States have also worked to address problems of organized retail theft, but jurisdictional elements make it difficult to process crimes across state lines. In 34 states, the felony theft level is more than $500; 17 of those states have a threshold of $1,000 or more. Thieves take advantage of current laws by moving from store to store, stealing just below the felony threshold at each store, thus risking only a misdemeanor charge. "These people are moving up interstates hitting stores," Chroust says.

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