HSI and ACAMS Release New Report on Organized Retail Crime

Homeland Security Investigations (HSI) and the Association of Certified Anti-Money Laundering Specialists (ACAMS) announced they have formed a partnership and published a report to help combat organized retail crime.

The report, “Detecting and Reporting the Illicit Financial Flows Tied to Organized Theft Groups and Organized Retail Crime,” highlights red flags associated with organized theft groups, including structured deposits and withdrawals, large purchases of stored-value cards, high-dollar wire transfers tied to wholesale companies involved with health and beauty supplies, and large purchases of lighter fluid or heat guns, among others.

“Organized retail crime is leading to more brazen, more violent attacks in retail stores throughout the country and many of the criminal rings orchestrating these thefts are also involved in other serious criminal activity,” said HSI Acting Executive Associate Director Steve Francis. “Tackling this growing threat is important to the safety of store employees, customers, and communities across the country.”

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The report also serves as a guide for law enforcement investigators and anti-financial crime (AFC) professionals, outlining how organized theft groups steal and resell retail goods through online marketplaces and launder an estimated $69 billion in illicit profits through the US financial system and trade-based money laundering (TBML) schemes each year.

“Large-scale retail theft and the money laundering that enables it are exactly the sort of illicit activities that law enforcement, financial institutions, and other stakeholders can more effectively fight together through public-private partnerships,” said ACAMS Chief Executive Officer Scott Liles. “This guide is not just a roadmap for criminal investigators and AFC professionals seeking to better fight organized retail crime—it is also a rallying call for greater collaboration on dismantling these dangerous criminal syndicates.”

According to the report, law enforcement agencies, retailers, online marketplaces, and financial institutions need to collaborate in public-private partnerships to facilitate information sharing and coordinate actions that help investigators better combat organized retail crime. Banks and other institutions can also consider “reasonably” enhancing anti-money laundering (AML) and counterterrorist financing (CFT) compliance programs to detect and report activity linked to organized retail crime.

“Organized retail theft is a low-risk, high-reward crime that generates nearly $70 billion in the United States alone, and much of that sum is routed into financial institutions under the guise of legitimate sales made through online marketplaces,” said Co-author of the report Lauren Kohr, ACAMS senior director of AML in the Americas. “For this reason, it is critical that banks and other financial institutions are not only aware of the scale of the problem but also actively work to identify and report related suspicious activity.”

While organized retail crime is not specifically highlighted in US financial regulations, organized theft groups are often involved in other illicit activity cited in the US Treasury Department’s National AML/CFT Priorities list, including cybercrime, fraud, drug trafficking, terrorism financing, weapons trafficking, and transnational organized crime. Recent investigations have also identified organized retail crime schemes exploiting undocumented migrants forced to steal goods to pay back “coyotes” who smuggle them across international borders.

LPM, along with CLEAR, helped with this report by providing the base education on what precisely is ORC, what these networks look like, and more through a panel of experts who met virtually and in-person over the last several months to bring together all of this information.

The full report is available here.