Retail theft legislation introduced in Congress

Earlier this month, Rep. Brad Ellsworth of Indiana and Rep. Jim Jordan of Ohio introduced a bill in the House that would make organized retail crime a federal offense.

According to the Federal Bureau of Investigation, organized theft costs the retail industry between $30 billion and $37 billion each year.

Joe LaRocca, vice president of loss prevention for the National Retail Federation said the Organized Retail Crime Act of 2008 would make it more difficult for criminals to hide behind state laws and the Internet.

"The rampant growth of organized retail crime is outpacing state and local authorities’ ability to combat it. Criminals increasingly sell stolen goods online and transport stolen merchandise across state lines to avoid tougher criminal penalties," LaRocca said. "State and local law enforcement cannot always chase criminals across state lines and onto the Internet—and criminals know it."

The act defines organized retail crime as fraudulently obtaining "retail merchandise in quantities that would not normally be purchased for personal use or consumption for the purpose of reselling or otherwise reentering such retail merchandise in commerce."

Those found guilty of engaging in organized retail crime would be subject to existing fines and prison sentences, however, the proposed legislation would require the U.S. Sentencing Commission to review its guidelines and make changes as it deems necessary.

"I think that (the legislation) will make people take shoplifting more seriously. Right now there’s a public perception that shoplifting, while its not a good thing to do, its maybe something that kids do or punks do and it’s not something that’s really worthy of concern," said Liz Martinez, a state investigator and author of the book "The Retailers Guide to Crime and Loss Prevention." "People just don’t get that a lot of these organized gangs are funneling their profits into terrorist activities, it’s not in the public consciousness that shoplifting is quite dangerous."

Though similar to the Racketeer Influenced and Corrupt Organizations Act, The Organized Retail Crime Act has several key differences, according to Curtis Baillie, president of Security Consulting Strategies.

"Theft is covered under RICO, but possession of stolen property is not covered under RICO. In order to charge under the RICO statutes you need to actually catch the thieves in possession of the stolen goods and in the act of stealing the goods," Baillie said. "There are other requirements to charge under the RICO statutes that do not necessarily fit with organized retail theft."

The act would also hold "online marketplaces" such as Internet auction sites, liable unless they take steps to ensure that the goods being traded on their site were not obtained through fraudulent means. Under the act, when credible evidence present itself that stolen goods are potentially being sold, these online marketplaces would be required to investigate the seller and if it is determined that the goods are likely stolen, the site owner would have to either remove the sellers or eliminate access to their merchandise. The Web sites would be required to keep records of all such investigations for up to three years.

Similar legislation was introduced in the Senate last week. In addition to holding online marketplaces accountable for fenced goods on their Web sites, the Combating Organized Retail Crime Act of 2008, introduced by Sen. Richard Durbin of Illinois, would also clarify existing laws to help authorities prosecute incidents of organized retail theft.

"Having legislation at the congressional level is an indication that it’s not just a petty crime and that’s very important for people to understand," Martinez added. "I think that the average Joe consumer says 'oh well Sears got ripped off or Macy’s got ripped off, too bad I have my own problems. They don’t see that someone ripped off Macy’s and they're now funneling that profit into terrorist activities and that has a potential impact on me and my family so (the new legislation) may help connect the dots."

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