Breaking News in the Industry: February 12, 2019

retail cash management

Employee arrested in $2.5M theft scheme

A western New York man has been arrested on charges of using his job as a buyer for CVS to steal $2.5 million worth of diabetes test strips. US Attorney James P. Kennedy Jr. says 35-year-old Antonio Rivera ordered excess boxes of the test strips for the Rochester CVS store where he worked and sold them to third-party purchasers.

Kennedy says an internal CVS audit could not account for 20,203 boxes of diabetes test strips purchased by Rivera worth approximately $2.5 million. Prosecutors say a forensic accounting found that payments for the fraudulently obtained test strips had been deposited into Rivera’s bank accounts.   [Source: WHEC News10]

Felonious fraudsters arrested for smash-n-grab thefts

Two felony suspects from Florida are behind bars thanks to Franklin Tennessee Police who caught them in the act of using credit cards stolen during a smash-and-grab auto burglary. Officers arrested 25-year-old Khambrel Cooper and 20-year-old Josephus Howard, both of Ft. Lauderdale, at the Franklin Walmart. Cooper and Howard had just used stolen credit cards to make several purchases in the store.

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Howard was taken into custody without incident, but Cooper tried to run from officers into a nearby wood line where he was quickly captured. Both suspects were with a group of traveling criminals who targeted Franklin-area daycares and parks. Their M.O. was to wait in the parking lot and watch for women to get out of their car without their purse, and then smash the window to steal valuables in plain view. The crew would immediately go to nearby retail stores where they would use the stolen credit cards to load visa gift cards. Police said Walmart loss prevention was instrumental in these arrests. Howard and Cooper, along with their associates, are suspected in several smash-and-grab auto burglaries that have plagued the Franklin-Williamson County area for weeks. Additional charges are expected.   [Source: WKRN2 News]

Legislators decry cashless stores

New Jersey legislators last week passed a bill forcing retailers to accept paper money, a move that takes aim at the growing number of restaurants and shops that are going cashless. By far the most prominent name in that space is Amazon, whose Go convenience stores are not only cashless; they’re cashier-less, with surveillance technology and an app allowing customers to bypass the checkout.

If New Jersey Governor Phil Murphy signs bill A591 into law, retailers in the state will have to offer customers the option to pay in cash. Philadelphia’s city council is due to vote on a similar bill next week, and the state of Massachusetts has long had a policy against cash-free businesses. As Fortune reported in 2016, a 40-year-old Massachusetts law says retailers cannot “discriminate against a cash buyer by requiring the use of credit.”

The argument behind the New Jersey bill is that cashless stores marginalize customers who do not have access to credit. “Any effort by retail establishments to ban the use of cash would be discriminatory towards those people,” argues New Jersey lawmaker Paul D. Moriarty, a sponsor of the bill. Moriarty is also sponsoring a bill that would prevent landlords from requiring tenants to pay via electronic funds transfer. Another case against the cashless movement was put forward by financial advisor Milo M. Benningfield in a commentary for Fortune; he argues that “frictionless” transactions could lead to irresponsible spending.   [Source: Fortune]

Fraudster uses a glitch to defraud eBay of $320,000

Chad Broudy found an online gold mine  when he discovered a glitch on eBay that let him buy anything he wanted, virtually free. Broudy, a 24-year-old from Pennsylvania  figured out how to over-redeem eBay’s gift cards again and again without the cards getting charged. For 2½ months, Broudy went on an epic shopping spree, paying virtually nothing for more than 3,000 items valued at roughly $320,000, according to federal prosecutors.

Broudy bought Macs, iPhones, speakers, small gold bars, and even cash ($100 bills), court records show. He obtained a cotton candy maker, a cordless vacuum cleaner, a brass eagle statue, and a Star Trek sushi set. He sold much of his bounty, converting Xbox controllers, wine glasses, and smart thermostats into cash.

The eBay glitch would fail to deduct monetary value from a gift card when a product was purchased with both the gift card and another payment method, prosecutors said. When buying items, Broudy would put nearly all of the product’s cost on the gift card, which would not get charged, and only a nominal amount on the other payment method, prosecutors said. That allowed him to buy items at virtually no cost.

But exploiting that glitch could put Broudy behind bars. He pleaded guilty to two counts of wire fraud in June and faces up to 40 years in prison, court records show. Prosecutors recommend imprisonment within the range of 27 to 33 months plus restitution and a $3,000 fine, while Broudy’s attorney has asked a judge to let him serve up to half of his sentence outside prison. A sentencing hearing is scheduled for May.   [Source: Philly.com]

Police seeking help in identifying 3 suspects

Police in Waterford, Connecticut, are looking for three suspects following a theft at a beauty store on Saturday. According to officials, around 4:30 p.m., three people stole approximately $1,200 in cosmetics from Ulta Beauty.

The three suspects were captured on surveillance video and posted on this website.  Anyone with information on the suspects is asked to contact the Waterford Police Department.   [Source: WTNH News8]

Pilfering cargo is a bigger problem for supply chain security

The image of tough guys hijacking truckloads of goods is a familiar one to fans of gangster movies. While trucks are the victims of most cargo thefts globally—75% of them, according to one report—these incidents increasingly do not involve the theft of the entire tractor-trailer. Instead, cargo theft is increasingly characterized by pilfering: lifting a few boxes or a few pallets of products while a truck is parked at a stop. This tactic makes the job much easier for thieves, on several levels—they don’t have to hide the truck, for example—while making things more difficult for carriers, cargo owners, and law enforcement.

Even when thieves purloin an entire truckload, they are more likely to employ some scheme or scam to take possession of ill-gotten freight than to strong-arm a driver to give up his load. Technology has been deployed in an effort to counter rising cargo theft rates, but thieves have countered with their own technology. CargoNet recorded 188 cargo thefts across the United States and Canada in third-quarter 2018, a 13% decrease over the same period in 2017. The average cargo value per theft event was $143,949, for a total estimated loss of $13.9 million across the United States and Canada in this period.

Overseas, Transported Asset Protection Association (TAPA) identified the biggest cargo crime trend late for 2018 in Europe, the Middle East, and Africa (EMEA), as the significant increases in loss values. TAPA’s recently published regional cargo crime report for the third quarter of 2018 reported a total loss of $44.6 million, representing a year-on-year increase of 123.3% or around $25 million over the same period in 2017.   [Source: American Journal of Transportation]

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