Day Two - Organized Retail Crime: Tackling a Multi-Billion Dollar Problem
Following the general session this morning a series of forums were held discussing a wide range of issues. One forum discussed the world of organized retail crime (ORC). Featured on the panel were Bill Suthard, CFI, Lowe’s Companies, Inc., Elizabeth Oesterle, National Retail Federation and Scott Springer, U.S. Department of Homeland Security.
Scott Springer was the was first to speak and gave a case study on a recent organized retail theft investigation. Scott reiterated the point that when law enforcement and retail LP work together to share information things will happen. Scott works for the US Immigration and Customs Enforcement (ICE). Typically they work on cases like drugs, money laundering, weapons trafficking, or in broad terms, if it comes across the border they have jurisdiction.
In 1996 Scott began to work a case involving infant formula. It involved the SAADAT organization. They would steal infant formula, repackage it and sell it overseas. One key issue is that some of the money was possibly funding terrorist organizations. The first case had the verdict abdicated by the judge. Scott was determined to do it right the next time.
The second time around his goals were:
- Identify, disrupt and dismantle the organizations
- Identify, seize and remove property
- Coordinate the investigate efforts to mutually benefit Federal, State and Local law enforcement
- Reduce number of thefts and losses by retailers
- Remove unsafe products from the supply chain
- Target all levels of the organizations for prosecution.
Beside baby formula, the groups would also target beauty products and cigarettes.
Scott jokingly pointed out that in any case involving Federal organizations that things will get bogged down, but it’s a process and if you know how it works and have a good partnership things will get done.
In Scott’s investigations he found a number of organizations operating in the US that fed money overseas, all of them operated black market retail theft organizations.
Scott and his team would have not made the progress they did without the cooperation of LP professionals. Scott encouraged law enforcement to seek out those LP partners since they have resources that law enforcement doesn’t have.
Also when you involve the Federal agencies it can assist with the large interstate organizations and help get the heads of those organizations.
Next to speak was Bill Suthard, with Lowe’s. Bill addressed the topic of ORC from the retailer’s perspective. A quick flow-chart of ORC
Retailer -> Booster -> Level One Fence -> Level Two Fence -> Level Three Fence/Repacker -> Level Four Fence/Wholesaler -> Retailer
All to often the stolen product in ORC is resold to the retailer, so in other words, what you shrink out, you buy back. For Bill and his team they often provide law enforcement completed cases, or as complete as they can get.
As a retailer, Bill often can’t wait on state and federal agencies, he needs to react immediately to stop the shrink.
Where to start?
- Identify the method of operation and targeted merchandise
- Immediately bring store awareness
- Identify a solution to stop the immediate shrink
- Review the case with legal counsel
- Collect evidence to support a criminal case
- Focus on product recovery and restitution
- Focus on education and training with exit interviews
Investigate and collect the evidence:
- Physical evidence (stolen cards, tools, etc)
- Documentary evidence (video)
- Demonstrative evidence (maps, spreadsheets)
Bill will often provide law enforcement with examples of product and explanation of UPC switch codes and other education. The level of documentation depends on the case. For example with a UPC switch, the provide video and photos of the switches along with all transaction receipts.
How can they substantiate the loss to law enforcement? Cycle count reports, inventory reports, etc. You need to justify the case to law enforcement.
Who are the thieves? Lowe’s investigates and collects evidence on suspects, but you must adhere to privacy policies related to the investigation.
While you can catch boosters all day, you need to cut the head off the snake, where is the product is going?
Once they collect the evidence it’s important to organize and present it in a way law enforcement wants it. Internally Lowe’s has a series of protocols for documenting and presenting evidence.
For successful prosecution it’s important that you have an understanding of the laws the pertain to you and present the charges you wish to pursue. The laws are always updating and law enforcement often has a hard time staying current. This is also important in regional cases, become the point person between agencies. When you can, avoid retail terminology.
The last panelist was Elizabeth Oesterle with the NRF. It’s Elizabeth’s job to educated politicians about ORC.
When talking with national, state and local groups the message is:
- ORC is not just shoplifting!
- ORC is multi-jurisdiction and often multi-site in nature
- Fencing operations impact both intrastate and interstate commerce
- Criminals really are selling stolen stuff online!
- News laws can help curb ORG
As members of the LP community you can make a difference by contacting and working with your Congressman. The story/impact is greater when the story is told by the retailer, and not a lobbyist.
Members can also use ‘capwiz’ on the NRF web site, or look for information at LPinformation.com.
I attended this presentation and thought it was excellent. Mr. Suthard presented it well and gave an excelllent, beneficial account from a Retailer’s perspective. I found it impactful and actionable. I’m definitely taking his approcah back to the office with me to kick-off my own ORC program.
Great presentation!
Scott got everyone’s attention and Bill delivered a great how-to for retailers to use for building cases. As a law enforcement professional, I felt Bill was right on track with his approach to ORC. GREAT SPEAKER!
Scott’s presentaion was eye opening. Linking ORC back to Terrorism was very strong.