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organized retail crime $37.4 billion a year this industryhurts business Organized Retail Crime in Virginia

May 24, 2007 12:35 am

BY KAFIA HOSH

There's a multibillion-dollar industry that involves carefully plotted business plans, a network of employees and growing potential.

It's also illegal.

Organized retail crime sucked $37.4 billion of stolen merchandise from stores nationwide in 2005.

At least 79 percent of retailers reported they were victims of ORC, according to the National Retail Federation in Washington.

ORC involves a team of professional shoplifters. Some members of the team scout a store or create a diversion, while other members shoplift and one person acts as a lookout.

"It's multiple people targeting multiple locations, stealing multiple items," explained Joseph LaRocca, the NRF vice president of loss prevention. "This is not little Johnny stealing a pack of bubble gum. It's a business operation."

LaRocca spoke to a group of retailers gathered yesterday at the Holiday Inn Select in Central Park for a theft-and-loss-prevention seminar.

The day-long event was hosted by the Virginia Retail Merchants Association and the Maryland Retailers Association.

Besides inventory losses, $16.9 billion is lost from cargo theft, fraudulent refunds, robberies and counterfeit merchandise and tender.

Most retail theft involves designer apparel, baby formula and home and gardening tools.

Professional shoplifters, otherwise known as "boosters" in the retail industry, go on to sell stolen merchandise through several avenues. Fraudulent goods are sold for 30 cents on the dollar at flea markets, pawn shops or on the streets. But the fastest-growing segment of retail theft is through online auctions. In 2000, $223 million in stolen goods were sold through the Internet. The figure swelled to $16.3 billion in 2004.

"It's unbelievably mainstream," said John Griffin, an investigations team leader for Target. "It's not a segment of the market."

Locally, fraudulent returns are some of the most popular retail crime methods.

Jim Hamilton, a deputy sheriff for Stafford County, encouraged retailers to strengthen their return polices, which he said are "too lax."

Retailers are fighting back against organized theft. Last year, President Bush approved legislation that would create an FBI Organized Retail Theft Task Force.

Retailers and law enforcement are also working closely and recently established LerpNet, an online database where merchants and police can share information about organized retail crimes. Wal-Mart, Circuit City, Kohl's, AutoZone and Macy's are just some of the major retailers that are LerpNet members.

In Virginia, ORC members can be charged under the state's RICO law. And even store owners who sell stolen goods can be held responsible through the money laundering statute. Money laundering is "the gathering of any currency from any felony and concealing it," explained Tom Shaia, a deputy commonwealth's attorney for Spotsylvania County.

Violations of both laws are considered felonies and carry a prison sentence of up to 40 years.