Do illegal aliens have the same attitude about your "insured" property? "Thou shalt not steal."

Retailers tag-team against shoplifting rings

11:09 PM CDT on Monday, May 11, 2009
By MARIA HALKIAS / The Dallas Morning News
mhalkias@dallasnews.com

Retailers are tired of being ripped off.

Professional shoplifting rings are making partners of fierce retail competitors that previously kept embarrassing losses to themselves.J.C. Penney and Target, Tom Thumb and Kroger, Gap and Pacific Sunwear, Wal-Mart and Home Depot share information and team up on stakeouts. Loss prevention investigative teams from Walgreen and CVS use the same radio frequencies and stay at the same hotels. That kind of close association in any other facet of retailing is verboten.

"Five years ago, it would have been unheard of for retailers to share any information," said James Abney, a Dallas-based organized retail crime manager for Gap Inc.

Investigations by specialty apparel chains working together from Dallas to Houston this year returned $97,000 worth of apparel, he said.

Driving this unlikely cooperation is a growing awareness that chains are getting hit by the same modern-day bands of thieves, called boosters. They blend in with shoppers but end up costing stores billions of dollars.

As retailers collaborate, they're getting the attention of local police and prosecutors. When stores tally losses into the tens and hundreds of thousands of dollars and deliver surveillance evidence showing they were hit by the same people, authorities take notice.

Local enforcement agencies have found that stolen jeans, baby formula and over-the-counter medications sold at flea markets, online and to illegal repackaging warehouses often fund illegal activities.

Cargo theft and fraud, including stolen or cloned credit cards used to buy merchandise or create fake receipts to return shoplifted items, amount to as much as $30 billion a year, according to FBI and industry estimates.

National and state retail trade groups are on an awareness push. The Retail Leaders Industry Association estimates that Texas loses about $77 million in state sales taxes on $1.23 billion of stolen merchandise a year. That's the equivalent of every item sold from 15 Wal-Mart Supercenters in a year.

Joe Wilson, a lobbyist for the Texas Retailers Association, is organizing 15 "community roundtables" in smaller cities. A recent meeting in Lufkin attracted 60 to 70 people, mostly officers from rural police departments.

"We're talking to them about boosters and fencing rings, and how to recognize organized retail crime," Wilson said.

Clearer laws
In February, three bills were introduced in Congress to clarify laws and give police better tools. Bills would also require online sites to investigate suspicious sales, collect information for law enforcement and put disclosure requirements on their Web sites.

Online retailers take offense.

Laws are already in place to combat theft, said Edward Torpoco, senior counsel for eBay Inc. "The sale of stolen goods predates the Internet, and it's always been illegal."

Loss prevention experts point to thousands of entries for items such as over-the-counter Prilosec or Gillette razor blades as anecdotal evidence of stolen goods online. In a National Retail Federation survey of 114 retail companies last year, 68 percent said they identified stolen merchandise or gift cards in the physical and online worlds.

Charlie Tyner, Kroger's Dallas-area security director, said expensive inventory control scanners that were stolen recently from local Kroger and CVS stores were found on eBay. In March, he installed new cases for razor blades, and within days thieves used hot knives to break through the hard plastic.

The industry is frustrated, he said.

EBay says it has 2,000 people devoted to policing the commerce it hosts and shares information with law enforcement. In April 2008, it set up Proact, a formal operation to partner with large retailers, but Torpoco wouldn't identify them.

Last fall, the Dallas Police Department dedicated a detective in its new Fusion Center to work with retailers, other police departments, the FBI and U.S. Immigration and Customs Enforcement on organized retail crime investigations.

Dallas Deputy Chief Brian Harvey, speaking at J.C. Penney's Plano headquarters at a recent conference on organized retail crime, said: "We've come to believe more and more that we need to partner with the private sector. It's helping us connect dots that we didn't know were connected."

Calls last year from Valero Energy, CVS Corp. and Cardtronics Inc. convinced area police departments that the region had a widespread problem with ATM thefts. That's when local law enforcement started working together, Harvey said.

About 85 percent of retailers said their companies were victims of organized retail crime in last year's survey. But in this economy, retailers don't have funds to beef up security details, spurring more cooperation among chains.

On a stakeout
Earlier this month, Robert Sanchez, regional loss prevention manager for Pacific Sunwear stores, went on a two-day stakeout in Austin with 14 peers representing several chains. They gathered enough surveillance to turn over to police.

Sanchez said booster groups of two to five people are becoming bolder and more brazen. Specialty apparel stores fold their newest merchandise on tables in the front of their stores. "We've all had those tables cleared clean without even seeing anyone," he said.

Walgreen's organized retail crime coordinator, Frank Muscato, retired from the Dallas Police Department's intelligence unit in 1993 after he was recruited by Wal-Mart to create its organized retail crime division. He's known as the "godfather of organized retail crime."

"We see a lot of people who had been in the business of dealing drugs but who find out they can make more money in stolen retail property trade with a lot less chance of being sent to prison," Muscato said. Some are addicts who steal $2,000 of merchandise 365 days a year. "That's one person stealing three-quarters of a million dollars a year."

He's also encountered illegal immigrants who have been told by fencing operators that "they really aren't hurting anyone" and that retailers expect theft and have insurance.

"They're just poor and misguided," he said. "If caught, they drop the goods, and no one will chase them."

In Texas and most states, if you're caught with $1,500 worth of merchandise or less, the charge is a misdemeanor.

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