Inside cartels’ latest criminal venture: Organized retail theft by boosters, fencers, and cleaners.
A Nationwide Epidemic: Mayhem on Main Street
A nationwide retail theft epidemic cost the United States close to $100 billion in 2021. Stores are being forced to raise prices or shut up shop, insurers are refusing to help, and smaller mom and pop stores are being left behind. In this series, Mayhem on Main Street, the Washington Examiner will investigate the causes behind the scourge of shoplifting, the role of the cartels, the cost to stores big and small, and the complicity of lax prosecutors. Part 2 investigates the role of the cartels. To read Part 1, click here.
The Cartels’ Involvement
Mexican cartels are behind the spike in organized retail crime and are deeply entrenched in every level of the process, according to the federal government’s chief investigative agency.
Retailers nationwide sustained nearly $100 billion worth of losses in 2021, the highest year on record, according to the National Retail Federation report published in September 2022. The growing number of cartel-run theft rings around the country drove that figure up from $70 billion in 2019.
Helpless Small Businesses
“Organized retail crime is leading to more brazen and more violent attacks in retail stores throughout the country. Many of the criminal rings orchestrating these thefts are also involved in other serious criminal activity such as human trafficking, narcotics trafficking, weapon trafficking, and more,” said Steve Francis, acting executive associate director for Homeland Security Investigations, in a statement. HSI is part of the Department of Homeland Security’s Immigration and Customs Enforcement.
The Retail Industry Leaders Association described the acceleration of organized retail crime in recent years as having ”exploded.”
In fact, 80% of retailers polled nationwide reported an increase in merchandise stolen in 2022, according to the National Retail Federation.
No subindustry of retail is exempt. A spokeswoman for the home improvement corporation said Home Depot’s most targeted items have been wire and wiring devices, power tools, and home automation products. When stores lock up those items, it only prompts thieves to focus on stealing other high-ticket items.
“Organized retail crime is an ongoing issue, and it has been on the rise over the last several years for many retailers,” said Evelyn Fornes, Home Depot’s senior manager of public affairs.
The Cost to Governments and Families
Organized retail crime has taken a huge toll on federal and state governments, costing them $15 billion in lost tax revenue, not including lost sales taxes, according to HSI.
Additionally, the average family will fork up an extra $500 annually to cover rising costs of goods as companies increase their prices to make up for stolen goods.
The Rise of Online Marketplaces
The type of mass-theft seen around the nation, particularly since the coronavirus pandemic began, is different than shoplifting, according to HSI. As the pandemic set in, people increasingly pivoted to purchasing items online, making it easier to sell stolen goods.
“Organized retail crime exploded over the last few years as criminals exploited the anonymity of third-party online marketplaces to fence billions in stolen products,” RILA Senior Executive Vice President of Public Affairs Michael Hanson said in a statement.
These retail crimes are perpetrated by people who work as part of a crime ring run by cartels. In recent years, cartels have gone from illicit drug manufacturing and smuggling, human smuggling and trafficking, and illegal firearm smuggling to commandeering crime in the retail environment.
Cartels are involved in every level of retail crime, from in-store theft and listing items in online marketplaces to shipping stolen merchandise worldwide and using U.S. financial institutions to hold their profits.
“Unlike shoplifting, where an individual steals food due to hunger or related incidents of simple theft, [organized theft groups] illegally profit from systematically targeting retail establishments utilizing professional thieves known as ‘boosters,'” according to HSI. “Often, boosters travel in crews throughout the country utilizing aliases, rental vehicles, and tools such as ‘booster bags’ and illegally acquired security keys to steal high-value merchandise.”
Stolen items are then handed over to the second person in the theft ring: the “fencer” or “fence.” The fencer buys the merchandise from the booster at a discounted price and will list the item on a number of platforms, including e-commerce websites such as eBay and Amazon, social media, and wholesale or trading companies.
Fencers will go to great lengths to conceal that the items were stolen. One example is using lighter fluid and heat guns to remove anti-theft stickers from goods. Once purchased, goods may be shipped via cargo containers overseas to be sold.
Kansas and Missouri are among the top 10 most affected states due to their prime location, according to Kansas Attorney General Kris Kobach.
“The reason is almost certainly the I-70 corridor, which has become a pipeline not only for drugs but also for organized retail crime. There is a link between drug trafficking and organized retail crime,” Kobach said in prepared remarks for testimony before a House subcommittee in June. “The drug-addicted often become boosters in order to feed their habits, and some fences recruit them specifically.”
Boosters “almost always” steal a dollar amount that is below the felony theft level, Kobach said. In Kansas, that looks like $900 worth of merchandise being stolen to stay below the $1,000 felony threshold.
Boosters typically use “pushouts” or “rollouts,” throwing items in a cart or large bag and walking or running out of the store, “knowing that the policy of the corporation prohibits staff from stopping them,” according to Kobach.
“With this brazenness comes increased violence, with boosters sometimes assaulting or even using pepper spray against store personnel who dare to intervene,” he said. “Boosters will hit the same specific store with impunity, sometimes as frequently as two to three times per week.”
One such incident in April turned tragic when the booster was approached by Blake Mohs, a 26-year-old Home Depot security guard in New Jersey. Mohs took back the stolen merchandise and was shot. The woman arrested after the shooting was identified as 32-year-old private security guard Benicia Knapps. Knapps picked up the stolen item next to Mohs and ran out after shooting him.
Home Depot has since introduced several initiatives to mitigate theft, though Fornes did not share details.
The final two steps in the theft cycle are left to the “cleaners,” whose job is to disguise the origins of stolen merchandise, and professional money launderers who funnel the profits, according to HSI.
This summer, Congress cracked down on items sold on retail sites, including Amazon and eBay. The INFORM Consumers Act, passed in June, has been the biggest step forward for retailers and law enforcement. The Federal Trade Commission issued a warning to online sellers that it would, in fact, be cracking down as the law called for.
“The industry is hopeful that requiring online marketplaces to collect, verify and disclose information about high-volume third-party sellers, marketplaces will finally evict bad actors from their platforms,” RILA Senior Executive Vice President of Retail Operations Lisa LaBruno said in a statement when the bill was passed. “In turn, consumers can shop with more confidence that the products they purchase online are legitimate.”
Fornes called it a positive first step for how it takes away the ”cloak of anonymity” that professional shoplifters hide behind when selling stolen merchandise online.
“Now, Congress and states must focus on three paths forward: First, enforcing the new law of the land. Second, creating capacity for law enforcement to investigate and prosecute cases through funding federal, state, and local task forces. And third, educating and training law enforcement and prosecutors on how to partner with retailers to combat dangerous criminals and organized crime,” Fornes said.
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