Thursday, November 5, 2009

House Judiciary Committee Hears From Federal Law Enforcement on Retail Crime | Reuters

WASHINGTON, Nov. 5 /PRNewswire-USNewswire/ --Representatives of three federal
law enforcement agencies told a House Judiciary Subcommittee today that more
needs to be done to combat organized retail crime (ORC) in the U.S.

In testimony before the House Judiciary, Subcommittee on Crime, Terrorism and
Homeland Security, officials from the FBI, U.S. Secret Service, U.S. Postal
Inspection Service, and Immigration and Customs Enforcement testified to the
challenges they face combating this growing crime.

"The Coalition Against Organized Retail Crime (CAORC) thanks Subcommittee
Chairman Robert C. "Bobby" Scott (D-VA) for holding this hearing and for his
commitment to providing federal law enforcement with the tools they need to
address this growing criminal activity," said the coalition.

Coalition testimony provided to the committee for the record can be viewed
here.

Organized Retail Crime involves sophisticated criminal networks made up of
many individuals who steal large quantities of goods from retailers and in
turn sell the goods for profit though pawn shops, flea markets and
increasingly on the Internet. Experts estimate organize retail crime losses in
the tens of billions of dollars annually.

Consumers are endangered when stolen goods are mishandled or altered before
being sold to unsuspecting consumers. This is of particular concern when
sensitive items such as baby formula, diabetic test strips and over the
counter medicine is involved. Recent investigations have uncovered these
sensitive health and beauty items stored at dangerous temperatures damaging
the safety and reliability of the product. In most cases, consumers are
unaware of the unlawful source of the products purchased from anonymous
sellers.

Retailers work closely with law enforcement to identify and investigate local
trends and to develop cases against these criminal networks. However, ORC
criminal networks often operate across state borders, exploiting legal gaps
arising from the existing patchwork of state and local laws. Consequently,
law enforcement is often unable to fully investigate and prosecute ORC
criminal networks. As a result, despite the close coordination between
retailers and law enforcement, according to the University of Florida, 2008
National Retail Security Survey, instances of ORC activity and losses
attributable to the crime continue to rise.

Federal legislation is necessary to bring the criminal code into the 21st
century by closing the legal gaps that have benefited ORC criminals too long.

Federal Legislation Currently Under Consideration:

The E-fencing Enforcement Act of 2009 (HR 1166), introduced by Chairman Robert
C. "Bobby" Scott (D-VA), would impose reasonable duties on online marketplaces
when there is good reason to believe that items listed for sale were acquired
unlawfully.

The Organized Retail Crime Act of 2009 (HR 1173), introduced by Rep. Brad
Ellsworth (D-IN), which modifies the federal criminal code to include ORC
activities, and makes the facilitation of ORC a crime. The legislation also
imposes practical reporting requirements on the operators of online
marketplaces and sellers when goods are suspected of having been acquired
through ORC.

The Combating Organized Retail Crime Act of 2009(S 470), introduced by Sen.
Dick Durbin (D-IL) would clarify existing law to give law enforcement the
tools to fight ORC, require on-line and off-line market places to investigate
suspicious sales, and place basic disclosure requirements on on-line
marketplaces.

About the Coalition Against Organized Retail Crime

The CAORC, formed in 2001, is composed of 37 national manufacturing and retail
organizations as well as individual companies that have come together to fight
this growing crime. The Coalition's web site can be accessed at
www.stopretailcrime.com. The CAORC has provided testimony to Congress on this
issue in March of 2005 and October of 2007. The Coalition strongly supports
enactment of pending federal legislation to combat ORC in the House of
Representatives. Those bills include: The E-Fencing Enforcement Act of 2009,
H.R. 1166, introduced by Chairman Scott, and the Organized Retail Crime Act of
2009, H.R. 1173, introduced by Reps. Brad Ellsworth and Jim Jordan.

Quotes from Members and Supporters of the Coalition Against Organized Retail
Crime

"The FBI estimates that organized retail crime costs retailers billions of
dollars annually, with proceeds from ORC often used to finance other criminal
enterprises such as drug trafficking and gang activity, including those
associated with terrorist factions. As a national retailer, Walgreens is
impacted by ORC throughout the country. That's why we're advocating for ORC
legislation in all states and support making ORC a federal criminal offense,
including criminalizing those activities that clearly promote and expand ORC,"
said Frank Muscato, Organized Retail Crime Investigations Supervisor,
Walgreen, Co.

"Organized retail crime impacts consumers as well as retailers, who must cover
losses and invest in additional security measures. Consumers are placed at
risk when package tampering occurs on consumer health care products, such as
infant formula and over-the-counter medications. These stolen products are
often repackaged and relabeled to falsely extend a product's expiration date
or to hide the fact that the item has been stolen. NACDS will continue to
work with lawmakers to pass strong legislation that will assist retailers and
law enforcement to combat the serious problem of organized retail crime," said
NACDS President and CEO Stephen C. Anderson, IOM, CAE.

"Organized retail crime (ORC) is a serious crime with real health and consumer
safety implications that endangers our neighborhoods and citizens. Consumers
are put in harm's way when stolen goods are mishandled or altered before being
sold to unsuspecting buyers and communities are endangered when illicit
proceeds from ORC are used to fund more dangerous and violent criminal
activity. Federal legislation is essential to give law enforcement the
necessary tools to combat these growing crimes and close the legal gaps
exploited by criminals for too long," said John Emling, Senior Vice President
of Government Affairs for the Retail Industry Leaders Association.

"Organized retail crime is a serious and ever-growing crime that poses serious
risks to the safety and well being of our communities. The growth of the
online marketplace has given criminals an unfettered avenue to fence their
goods to innocent consumers, including here in Cook County. Federal criminal
statutes are needed to provide law enforcement with the tools necessary to
deter and prosecute this complex criminal activity. I commend Senator Durbin's
leadership in introducing the Combating Organized Retail Crime Act (S 470) as
a means to combat organized conspiracies; including tightening regulations for
online auction sites that could serve as conduits for stolen goods," said
Thomas J. Dart Cook County Sheriff.

"The National Insurance Crime Bureau's (NICB) data and investigations show
that organized retail crime is a growing problem from coast to coast. Online
marketplaces often times become fraud victims as organized criminal rings
defraud Web sites and offer financial assistance to buyers and sellers in
transactions. Unfettered access to these online auctions negatively impacts
businesses and innocent consumers as a source to fence stolen goods. NICB
supports the Organized Retail Crime Act of 2009 as an effective means to
combat this problem. By tightening the requirements to sell items online and
beefing up federal criminal statutes, we can reduce the market for stolen
goods, making retail theft less attractive to the criminal rings," said the
National Insurance Crime Bureau.

"Organized retail crime is more sophisticated and more dangerous than petty
shoplifting as organized rings of criminals move from store to store stealing
large quantities of goods. They jeopardize the health and safety of consumers
by fencing goods to buyers unaware of their origins and increasingly use
internet auction sites, which conceal their identity. We support legislation
that gives law enforcement the tools they need to fight these criminals and
makes organized retail crime a federal felony for all the perpetrators
involved," said Leslie G. Sarasin, president and chief executive officer of
the Food Marketing Institute.

"The business of organized retail crime continues to proliferate throughout
the U.S. Winning the battle against organized retail crime begins with the
support of law enforcement, loss prevention teams and industry partners.
Winning the war requires specific legislation that will make criminals think
twice before participating in these illegal, often dangerous activities," said
Joe LaRocca, Senior Asset Protection Advisor, National Retail Federation.

"RAM strongly supports federal legislation to combat organized retail crime.
While we are backing legislation in our own state and feel that it is
necessary to update our criminal code in MA, we firmly believe that federal
legislation is needed to address this growing issue which has no state
boundaries," stated Jon Hurst, President of Retailers Association of
Massachusetts (RAM).

The Coalition Against Organized Retail Crime, hosted a briefing in advance of
today's hearing. A recording of the press conference is available by dialing
(800) 642-1687 and entering code 39367794.

SOURCE Coalition Against Organized Retail Crime

Liz Jennings of Coalition Against Organized Retail Crime, +1-703-600-2017

House Judiciary Committee Hears From Federal Law Enforcement on Retail Crime | Reuters

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