Cunning criminals scare reps out of trade
FBI and local police are teaming up to combat a little noted but highly lucrative crime: robberies by gangs that target traveling jewelry and precious gem sales representatives.
Jewelry and gem salespersons reported 117 such robberies nationwide in the first nine months of this year, putting the industry on track for its lowest number of annual attacks since about 1990, according to a report by the industry group Jewelers' Security Alliance (JSA).
However, ripping off sales reps, who typically travel by car and carry hundreds of thousands of dollars worth of goods in small pieces of rolling luggage, remains a highly lucrative crime. The average theft this year has netted about $224,000. By contrast, the average bank robbery netted about $4,220 in 2004, the FBI estimated.
"It's a crime that's below the radar, and doesn't get nearly the attention of say, bank robbery," says John Kennedy, president of the JSA. "But in the past 10 years or so, it's become a fact of life for an industry where it had pretty much been unknown."
Interrogations of captured robbers have shown that most are illegal immigrants, usually Colombian or Ecuadorean, who have worked their way up in ethnic gangs by performing less serious robberies, says Daniel McCaffrey, an FBI agent in New York City who specializes in jewel theft.
After 1999, when sales reps endured a record 323 robberies and more than $76 million in losses, the FBI began to partner with local police task forces in New York City, Los Angeles, Houston, Miami and other jewel theft hot spots. Using stakeouts, stings and other methods, they've helped boost arrests and lower dollar losses each year since 2000. Figures kept by the Jewelers' Security Alliance show local, state and federal arrests increased 25%, from 456 in 2003 to 570 in 2004. Those included crimes against retailers as well as sales reps.
Brotherhood of salesmen
The targeting of traveling jewelry and gem sales people has taken a toll on the trade.
Joseph Menzie, a former traveling salesman who is now a gem wholesaler in New York City, estimates that sales reps, who once numbered in the thousands, now are down to about 600 to 800 full-time workers and declining each year. About 15% are women, he estimates.
"It used to be a great job for a young guy," Menzie says. "But now, forget it. Nobody young is coming in, and a lot of the old guys would get out if they could. ... All of them have been hit (by robbers)."
When Menzie started in the mid-1970s, representing his grandfather's gem company out of New York City, going on the road to sell was a time-honored way of breaking into the jewelry business. The job featured travel, fellowship with other sales reps, and some prestige. Commissions of 4% to 15% afforded a decent living.
Because of the nature of their product, jewel and gem reps seemingly were impervious to changes that the Internet brought to the sales industry.
"The customer wants to hold the piece in her hand, so the retailer wants to see it and feel it, too," Menzie says. "That's where the salesman comes in."
Sales reps kept their product line of diamonds, watches, finished jewelry and gemstones such as emeralds and sapphires in small off-the-rack travel cases. They formed groups such as the Brotherhood of Traveling Salesmen, which collected annual dues and passed the hat when a sales rep died on the road to pay for return shipping of both the body and the product line.
Crime was an occasional problem. In more than 10 years on the road, Menzie remembers being followed once, on a freeway in Alabama. He eluded the chase car and found refuge at a small town police station.
Gangs use GPS, databases
For reasons that aren't clear, Ecuadorean and Colombian gangs began to target sales reps, FBI agent McCaffrey says.
They use Mapquest, Global Positioning System devices, cellphones, and telephone and property databases to identify and follow sales reps. It's not unusual for 20 or more crewmembers using several cars to follow prospective "scores" for days or weeks, McCaffrey says.
Some of the thieves' favorite methods, says McCaffrey, who has interviewed captured robbers, include:
*Cutting brake lines or spiking tires on a sales rep's car, then trailing him until he breaks down.
*Breaking into the parked car while the salesman is having coffee.
*Surprising the sales rep as he leaves his motel or home.
The robberies, which have netted nearly $600 million since 1995, according to the JSA, are forcing changes in the industry. Manufacturers and wholesalers, beset with rising insurance premiums, increasingly are using large trade shows to reach retailers. Reps who continue to travel carry more product, to compensate for higher gas and hotel costs.
In a sure sign of the times, the Brotherhood of Traveling Salesmen disbanded about a year ago, Menzie notes. The group, which dated from the 1930s, was down to about 100 members and had few new applicants. Those who remained, Menzie says, decided to cash out the group's account and get a check now rather than wait for each other to die off.