'Vicious Cycle': The Ripple Effect of Organized Retail Crime
Protect small businesses from crime if you want a thriving economy

Increase in retail theft has a cascading and negative economic impact on small businesses and communities

Surging retail theft is having disastrous effects on businesses both large and small across the country. A recent survey of retail and grocery workers found that half of them witnessed a theft or attempted theft between October 2022 and April 2023.

Earlier this year, 20 different Dollar stores in the Detroit area were robbed within 22 days. To make matters worse, organized retail crime, in which groups of people work together to steal from retail businesses, is now presenting a growing threat.

This type of retail theft increased by 26.5% in 2021, according to the National Retail Federation, and seems to show no signs of slowing down.

The Biden administration has done nothing to address this growing crisis. As a result, some retail employees have started taking matters into their own hands.

This increase in retail theft - and the way business owners and employees have been forced to respond - have a cascading and negative economic impact, especially on small businesses. They run their operations on very tight margins and are often dependent on selling their inventory on a week-to-week basis to pay rent and other expenses. Many small businesses could very easily go bankrupt from just a few robberies.

If the government refuses to tackle these problems, some small businesses feel forced to respond by locking up even inexpensive, basic household goods, or taking other steps to protect their livelihoods. Loyal customers then become frustrated, which hurts communities and creates a vicious cycle.

By the end of 2021, at least 13 left-wing-controlled cities had taken steps to defund their police departments, and all 13 experienced significant increases in violent crime. Nevertheless, cities such as New York and San Francisco have doubled down, making the punishment for many crimes a simple citation or misdemeanor with no bail.

This sends a chilling message to small businesses that they are not protected by local law enforcement and robberies will not be prosecuted. foxnews.com


Luxury Retailers Under Attack Nationwide by Smash-and-Grab Robbers
Luxury Retailers' Security Risk Rises Amid Surge in Brazen Smash-And-Grabs
While retailers calculate the direct losses in dollars and cents, it will have a long-lasting impact on luxury shoppers already on high alert from rising crime rates.

And it's not just happening in California, where shoplifting laws have been rolled back. Major cities nationwide are seeing a rise in organized retail crime with New York, Houston, Miami, Chicago, Seattle, Atlanta and Dallas among the top ten cities most affected.

Once luxury shoppers lose confidence in their safety and security in the store, restoring it will take a long time, with retailers' losses mounting accordingly.

Luxury Retailers Aren't Ready

As shocking as these recent assaults on luxury retailers are, even more shocking is how ill-prepared luxury retailers seem to be dealing with it. A recent survey among 50 senior executives at major global luxury retailers found 88% were satisfied with their overall level of security. Some 24% rated it as excellent, and 64% said it was good. The highly-publicized thefts last week prove otherwise.

Clearly, the criminals are one step ahead of luxury retailers. They must do a better job protecting their goods, customers, and employees from retail theft.

Intractable Problem

Retailers are ill-prepared to tackle organized retail crime, like that recently perpetrated on luxury retailers. Only 32% of retailers reported having a ORC team in place. The NRF report warns, "If retailers do not have dedicated resources to investigate ORC, then they will be less likely to identify when ORC is occurring."

This is particularly problematic because 81% of retailers reported that ORC offenders are becoming more violent than last year.

Retailers see the criminal justice system as contributing to the problem. Over 70% reported an increase in ORC crime when felony thresholds are lifted, and 55% reported reduced or eliminated cash bail has been associated with a substantial increase in repeat offenders.

Everybody loses from retail theft, and luxury retailers have the most to lose since they have so much valuable, easily-lifted merchandise on hand. Criminals have figured out how to hit them, and retailers have been caught flat-footed.  forbes.com


Using AI-Driven Analytics to Fight Theft
Addressing retail theft with an intelligent loss prevention approach

By James Stark - Retail Segment Development Manager, Axis Communications

Today's solutions are more responsive, more intelligent and more effective when it comes to identifying suspicious behavior and alerting security teams in real time. Today's retailers have the ability to take an intelligence-led approach to security, leveraging modern devices and advanced, AI-driven analytics to turn loss prevention into a proactive operation rather than a reactive one.

An integrated solution is the answer

No single device or solution can solve the problem of retail crime. Loss prevention needs to be addressed in a more holistic way, which means retailers are best served by prioritizing open-platform technology capable of integrating with a wide range of devices and solutions. Open-platform technology makes it possible to integrate solutions from different providers on an as-needed basis, rather than being locked into a single product line. It also makes it easier for those solutions to talk to one another - something that is absolutely critical for an intelligence-led approach to loss prevention.

Putting modern analytics to use

These integrations can even impact loss prevention in ways that go beyond retail crime: certain analytics can detect things like precariously stacked objects, unaddressed spills or blocked emergency exits, aisles, electrical panels or fire extinguishers. Quickly and automatically issuing alerts to remediate those problems can save businesses from tens of thousands of dollars in potential OSHA fines - and while that might not fall under the typical definition of "loss prevention," it does have a significant impact on the business's bottom line. It's also worth noting that computer vision technology is improving with each passing year, and while it isn't widely available yet, its potential is impressive. Computer vision is excellent at detecting behavior outside the norm, such as a person grabbing an entire shelf of expensive items or failing to scan items at a self-checkout terminal. This emerging technology will soon provide significant benefits for loss prevention teams.

Don't be an easy target

Almost 75% of retailers say that external theft has increased over the past five years, while another 56.9% say internal theft has also increased over that same span. The problem of shrink is here to stay - which means it is up to retailers to decide what to do about it. Fortunately, modern security technology has put new tools in the hands of loss prevention teams, allowing them to detect potential security incidents more accurately and deal with them more quickly and effectively - and integrating those solutions creates a valuable force multiplier effect that can help retailers avoid becoming an easy target for criminals. securitymagazine.com


The Psychological Impact of Anti-Theft Measures
San Francisco professor complains about 'psychological cost' of stores locking items to prevent theft

A California academic argued that 'high-quality education, job training and a living wage' may be better ways of discouraging crime than security measures

A San Francisco professor lamented that items are being locked up in grocery stores, warning that it makes Americans feel like prisoners.

University of California, San Francisco sociology professor Stacy Torres, however, wrote an opinion piece for the Los Angeles Times downplaying the phenomenon, headlined, "Grocery stores used to be my happy place. Then they started locking up the detergent."

"Locked glass cabinets safeguarding merchandise are now ubiquitous in chains like Target, Walmart and Walgreens," the academic wrote. "Asking clerks to retrieve detergent and baby formula is demoralizing enough, but businesses are implementing more severe security measures that erode customers' spirits and our social fabric, even though it's unclear whether shoplifting has become the national crisis that some retailers claim."

After arguing it is "unclear if beefed-up security measures are actually helping to solve these problems," the California academic offered some solutions for "organized retail theft and smaller-scale shoplifting," many of which appeared to be a checklist of left-wing initiatives. foxnews.com


Soaring crime rates test the limits of even the most progressive Oaklanders. But it won't break them

It's a trying time for level-headed Oaklanders who still believe in progressive public safety policies despite how easy it would be for them to throw their support behind tough-on-crime approaches of the past.

"What I've been telling everybody is that what's new now is how the crimes are happening in broad daylight," said Waheed Alsaidi, who runs the Montclair Auto Shop and has been a business owner in the Oakland area for two decades.

"We have to figure out why this violence, why these crimes are happening and address it. What's driving someone to commit a crime in the open, in such a bold way like we're seeing?" he said.

As the Chronicle recently reported, crime rates in the city are high, especially when compared to pre-pandemic 2019 numbers: As of July, the city's homicide count was up 80%, car break-ins were up almost 90%, vehicle thefts had doubled, reported assaults were up 40% and reported robberies were up 20%.

While crime has increased, the historically poor-performing Oakland Police Department - which even amid protests from anti-police-brutality groups has never been defunded and is seeing its funding grow in the city's latest two-year budget - solved a smaller percentage of homicides, robberies and aggravated assaults last year than it did in 2019, according to California Department of Justice data.

The city's crime issue has others looking for the worst in people. sfchronicle.com


Tennessee Gov. Lee says public safety is a 'matter of emergency'
Tennessee Gov. Bill Lee said the terms he set for the Aug. 21 special session of the state General Assembly are tied to "emergency" public safety challenges.

"Public safety is something that matters," Lee said on a Wednesday, Aug. 9, stop in Memphis. "It is a matter of emergency. That's why I believe that we should have a special session. That's why I called it. Because this is something that is urgent and we should not wait for others to solve the challenges that this nation is facing of trafficking, human trafficking, drug trafficking, violent crime."

The formal proclamation of the special session has 18 items, including temporary orders of protection initiated by law enforcement. dailymemphian.com


American law enforcement is facing a crisis
Illinois opens police recruitment to non-citizens

Illinois is not alone

While it is true that this bill could potentially allow non-citizens to arrest citizens, so what? Non-citizens can already serve in the military and be employed as firefighters, paramedics and other first responder positions. Why not law enforcement too?

Illinois is not alone in looking at this as one solution to the police recruitment crisis. Tennessee has allowed non-citizen military veterans to apply for law enforcement positions since 2015. California and Colorado passed bills very similar to Illinois's earlier this year. States including Maryland, New York and New Jersey are considering doing so in the future.

Critics have posed plenty of doom and gloom scenarios: Cartels shipping agents north to join local police departments, immigrants officers forming criminal gangs and outcry if a non-citizen officer shoots a citizen. Although these scenarios are possible, proper background investigations and vetting should cut off any attempts to take advantage of the new hiring parameters. Plus, we have unfortunately seen this and far worse with officers who were U.S. citizens.

In the end, American law enforcement is facing a crisis. Lowering the standards is not a long-term cure. Hiring qualified but less dedicated officers is not going to advance law enforcement as a profession. While allowing non-citizens is unlikely to completely fill the gap, it is a step in the right direction. It will not hurt that many of the applicants will be individuals who have long dreamed of a career in law enforcement, dedicated years to obtaining the necessary training and education, and are likely to be some of the most appreciative new hires your department hires.

Police Executive Research Forum (PERF), most recently issued publication is part of its Critical Issues In Policing Series and titled "Responding to the Staffing Crisis: Innovations in Recruitment and Retention."  police1.com


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Three Internal Threat Cases

1. LinkedIn - Barry Khosropanah Senior VP Information Technology at GPM Investments, LLC - ARKO Corp.
GPM Investments, LLC, a wholly-owned subsidiary of ARKO Corp., a Family of Community Brands, is based in Richmond, Virginia and operates or supplies sites in 33[1] states and Washington D.C. As the 6th largest convenience store chain in the country, we have approximately 3,200 locations comprised of approximately 1,400 company-operated stores, approximately 121 proprietary cardlock locations, and approximately 1,660 dealer sites to which we supply fuel. gpminvestments.com

DOJ: Chester Man Pleads Guilty to $1.9 Million Embezzlement Scheme
RICHMOND, Va. - A Chester man pleaded guilty yesterday to mail fraud for embezzling over $1.9 million from his employer.

Between 2015 and 2023, Bahram Khosropanah, 65, devised and repeatedly executed a scheme to misappropriate technology assets from his employer for his own personal gain. Khosropanah held senior positions at a Richmond-based company that operates convenience stores across the country. His role focused on information technology, and he was responsible for purchasing computers and other electronics for the company. Upon receiving invoices for certain purchases, Khosropanah made unauthorized material modifications to the invoices before submitting them to his accounting department for approval.

Through these modifications, Khosropanah was able to misappropriate computers and electronics and conceal his misappropriations. He then sold the misappropriated assets on eBay and to a third-party wholesaler. The defendant sold approximately 850 laptops and other electronics, causing a loss of over $1.9 million to his employer. Khosropanah used the proceeds from the fraudulent sales to purchase luxury cars, including a Ferrari.

Khosropanah is scheduled to be sentenced on November 2. He faces a maximum penalty of 20 years in prison. justice.gov


2. Internal Threat & #1 Authorized Reseller Orchestrates $88M IP Theft & "Cornered the Market"
DOJ: Business Owner Pleads Guilty in Massive International Scheme to Sell Pirated Business Telephone System Software Licenses
A New Jersey man pleaded guilty to participating in a massive international scheme to make millions of dollars by selling pirated business telephone system software licenses. The entire scheme allegedly resulted in the sale of software licenses with a retail value of over $88 million.

Jason M. Hines, of Caldwell, conspired with co-defendants Brad Pearce and Dusti Pearce to commit wire fraud. The scheme involved generating and then selling unauthorized Avaya Direct International (ADI) software licenses, which were used to unlock features of a popular telephone system used by thousands of companies around the globe.

Avaya Holdings Corporation, a multinational business communications company headquartered in California, sold a product called IP Office, a telephone system used by many midsize and small businesses in the United States and abroad. Avaya used software license keys to control access to Avaya's copyright-protected software and to ensure that only customers who paid for the software could use it.

Hines operated Direct Business Services International (DBSI), formerly known as Dedicated Business Systems International, a New Jersey-based business communications systems provider and a de-authorized Avaya reseller. He bought ADI software license keys from Brad and Dusti Pearce and then sold them to resellers and end users around the globe.

Brad Pearce, a long-time customer service employee at Avaya, allegedly used his system administrator privileges to generate those keys without authorization, creating tens of thousands of them that he sold to Hines and other customers. Brad Pearce's wife, Dusti Pearce, is alleged to have handled accounting for the illegal business. Hines was by far the Pearces' largest customer, buying over 55% of the stolen licenses, and significantly influenced how the scheme operated. In fact, Hines was one of the biggest users of the ADI license system in the world. As a result, Hines reaped millions of dollars from the fraud.

According to the indictment, the Pearces and Hines' operation not only prevented Avaya from making any money on its stolen intellectual property but also undercut the global market in Avaya ADI software licenses because the Pearces and Hines were selling licenses for significantly below the wholesale price. In fact, Brad Pearce allegedly told Hines that the Pearces' customers could not obtain same-day ADI software licenses from anyone else for anything even close to the Pearces' prices, and Hines suggested that he and Brad Pearce work together to "corner" the market in licenses.

Hines pleaded guilty to conspiracy to commit wire fraud. As part of the plea agreement, the United States has agreed not to advocate for more than five years in prison. The court has not yet set a sentencing date. Pursuant to the plea agreement, Hines must forfeit a money judgment of at least $2 million as well as make full restitution to his victims. A federal district court judge will determine any sentence after consideration of the U.S. Sentencing Guidelines and other statutory factors. justice.gov justice.gov

   Related: DOJ: Three Defendants Indicted in Massive Software Piracy Scheme


3. Former CFO of 2nd Largest U.S. Cannabis Retailer Misuses Co. CC's
Trulieve Former CFO Used Company Credit Cards for $350k to $400K for Personal Expenses & Purchases
2nd largest cannabis retailer Trulieve Cannabis is weighing next steps after an audit committee investigation into "irregularities" related to its former CFO Alex D'Amico's expenses and use of corporate credit cards uncovered conduct that was "inconsistent with the company's policies and procedures,"

D'Amico both sought to be reimbursed for personal expenses and made personal purchases with company credit cards during his tenure at the firm, the company and its audit committee concluded. The company estimates that D'Amico did not reimburse the company for such expenses, with the total amount "in question" between $350,000 and $400,000, the filing states.

In the filing Wednesday, the company stated that D'Amico's resignation on June 19 did not result from any disagreements regarding any matter related to the company's operations, policies or practice, something many companies state when an executive departs. Mr. D'Amico did not receive any severance in connection with his resignation, the company stated. cfodive.com


More Neiman Marcus Layoffs Targeting Corporate Staff
Neiman Marcus cuts corporate staff to boost cross-functional collaboration

The department store said less than 1% of its workforce is affected by the latest layoffs as it continues to implement a strategy unveiled in February.

Neiman Marcus Group has eliminated an unspecified number of corporate roles, which affects less than 1% of its workforce, the department store company said by email last week. A spokesperson declined to say how many people are affected.

The layoffs are part of a strategic realignment announced in February, the company also said. At that time about 500 people, or about 5% of its workforce, lost their jobs. The latest move boosts "cross functional collaboration," which created the redundancies, according to the company's statement last week. retaildive.com


COVID Is Surging Ahead of Fall and Winter
New Covid vaccines are on the way as 'Eris' variant rises
A new COVID vaccine is due out next month, but health experts and analysts say it is likely to be coolly received even as hospitalizations from "Eris", a variant of the Omicron form of the coronavirus, rise around the country.

Some public health experts hope that Americans will welcome the new shot as they would a flu jab. But demand for the vaccine has dropped sharply since 2021 when it first became available and more than 240 million people in the U.S., or 73% of the population, received at least one shot. finance.yahoo.com


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