Below is an article taken from the Federal Way, Washington, Mirror on a couple of recent ORC busts and the article also gives some very useful statistics and strategies used by some of the large stores to measurably minimize the impact of ORC on their stores.  Good read.
 

Investigators bust two organized retail crime rings in King County
Drug addicts are top shoplifters

Shoplifting has escalated in King County over the past decade, with the costs ultimately absorbed by the public.

As a result, organized retail crime is on the radar of local law enforcement agencies. In May, county prosecutors filed charges against two unrelated organized retail theft rings that recruited shoplifters to steal nearly $6.1 million worth of goods. Two undercover investigations tracked stolen merchandise from commonly victimized stores in King County such as QFC, Fred Meyer and Safeway.

Thieves swipe everything from dishwashing soap and razor blades to diapers and meat, then sell the items to a middleman for a fraction of their value. The middleman, also known as a fence, resells the stolen items for profit.

The National Retail Federation estimates that annual losses from organized retail crime are as high as $30 billion. In Washington, the estimated annual loss to retailers is $77 million, according to the Washington State Organized Retail Crime Alliance.

TWO FENCE OPERATIONS BUSTED

In one case, Chanthou Rim and Sara Kong are accused of running a fence operation. The couple is believed to have recruited more than 30 "boosters," mostly addicts seeking cash to buy drugs like heroin and OxyContin. The boosters would steal hundreds of dollars worth of items at a time, then sell the loot to Rim and Kong for pennies on the dollar. The couple would then resell the items in their Samway Market in White Center, or send them to a higher-level fence for shipment to Cambodia.

According to detective reports, a pair of auto dealerships in South King County were linked to the theft operation. Export Auto Sales in Kent and Rain City Motors in Auburn are under investigation for their role in exporting health and beauty items that were packed with vehicles in shipping containers headed to Cambodia.

Some of the items had been previously marked from undercover sales operations, according to detectives. Shoplifters who sold items to the couple had been arrested and eventually became confidential informants, leading detectives to Rim and Kong's operation. Using an ultraviolet pen, detectives marked stolen property with the originating retailer's store number. Detectives then purchased the stolen items at the Samway Market.

Undercover detectives met with the couple on multiple occasions to sell stolen goods ranging from detergent, diapers and hygiene supplies to pain relievers and fertilizer.

The couple faces 19 charges including trafficking in stolen property, criminal solicitation and conspiracy to commit organized retail theft. In this case, county prosecutors estimate the loss to retailers at $4.8 million. If convicted, Kong and Rim could face up to 63 months in prison.

A second and unrelated case involves four defendants at GMS Market in Seattle's Greenwood neighborhood. Gulshan Rai, his wife Shabnam Sukhija, their son Jatin Rai and daughter-in-law Mitu Rai face similar charges for their roles in trafficking and selling stolen property.

According to detective reports, boosters for GMS Market were paid $1 or $2 per item stolen. Boosters often received suggestions on how to shoplift as well as shopping lists for certain items.

In this case, county prosecutors estimate the loss to retailers at $1.25 million. If convicted, the four defendants from GMS Market could face prison sentences ranging from nine months to 22 months.

The defendants in both cases were arraigned June 2.

ROOTS OF THE PROBLEM

Most of the shoplifters involved with the fencing operations are adults in their 40s and 50s with severe drug addictions, said Jason Moulton, Loss Prevention Director for Safeway stores in the Seattle division.

Retailers must create an environment that deters theft, he said, even if theft is only a symptom of a bigger problem.

"If I were able to wave the magic wand, the real issue here is substance abuse," Moulton said, noting progress in curbing losses. "It's like we're playing a chess game and trying to keep them from playing in our particular area."

Moulton joined Safeway almost 11 years ago after a career in the FBI. In that time, and especially the past five years, organized retail crime has skyrocketed, he said. The problem became bad enough that state statutes were passed and revised in the Legislature to specifically address this type of crime. The multimillion-dollar losses have a major impact on cities because big grocers like Safeway are also among the biggest taxpayers.

Moulton believes that cities and counties face a disincentive to incarcerate shoplifters due to the costs of jail. Even after an arrest and guilty plea, a shoplifter with a drug problem is likely to reoffend upon release.

"The only time these people aren't stealing from us is when they're in custody," he said. "Every time we take out a booster or fence, they're replaced by another because of the marketplace."

More organized theft cases are finding their way into the King County legal system, with judges and juries taking notice. Deputy Senior Prosecutor Andy Hamilton credited better store security and preparation by local law enforcement, including Federal Way police, in fighting this crime. Some King County detectives now specialize in finding these elusive criminals who target big-brand stores like QFC, Safeway, Albertsons, Fred Meyer, Target, Wal-Mart and Home Depot.

"They're very brazen about it," Hamilton said of the boosters who supply the fences with stolen goods. "I'm not saying the mafia or the Cosa Nostra is behind this, but it is organized."

Hamilton calls organized retail crime a "double theft" because retailers pass the extra cost onto consumers while the state loses the sales tax revenue. Costco is one example of a retailer with lower shoplifting rates, he said, likely due to a practice of "checking" customers when they enter and leave the store.

According to Federal Way police, tenants at The Commons Mall in Federal Way – including major retailers like Sears, Macy's and Target – report fewer losses due to organized thievery. This is credited to the constant police presence at the mall as well as building relationships with loss prevention officers at stores.

However, the real frontier for organized retail theft is online. The people involved in the GMS Market case allegedly brought in $7,000 to $8,000 a month from Internet sales, according to a Seattle police investigation.

"There are folks making big money on the Internet. The profit is incredible," Hamilton said. "We try to tell the average consumer if a deal is too good to be true, it's probably stolen."

LEARN MORE

Read more about Federal Way's efforts to reduce organized retail theft in this Mirror report from July 2011.

Federal Way Mirror Editor Andy Hobbs can be reached at editor@fedwaymirror.com or 253-925-5565.
 

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