The Organized Theft “Sales Cycle”

organized theft

Forty years ago, organized theft (now called organized retail crime, or ORC) plagued the East Coast. Gangs of professional thieves from various countries in South America in an organized and well-planned scheme were targeting high-end designer clothes from department and specialty stores from Boston to Atlanta. Intelligence on these gangs revealed that representatives from each gang would meet on a Monday morning in Providence, RI, and lay out the routes for the week. The Chileans might head toward New York City, the Peruvians would go to Philadelphia, the Colombians to Baltimore and Washington, and the Ecuadorians to the Carolinas and Atlanta. The following week, a similar meeting would take place and the victim retailers would be reassigned.

From Designer Clothing to Household Goods

By 2001, there was a rapidly growing and different type of ORC theft occurring all across North America. The targeted products were everyday household commodities, such as over-the-counter pharmaceuticals (Tylenol, Advil, etc.), analgesics, razor blades, film, batteries, videos, DVDs, CDs, smoking cessation and eye-care products, and infant formula.

The lists have changed, but thieves today still steal the items that are in high demand. These thieves are often highly organized, former convicted felons who learned of this new way to make a substantial tax-free cash income during conversations with other inmates while strolling through the exercise yards of America’s prisons. These professional thieves, who steal as much as $5,000 of retail product per day, are known as boosters.

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The term booster is used to refer to someone who steals for a living and who is involved in an organized criminal enterprise. They have a buyer for their merchandise who has clear knowledge that the products that they are purchasing for 10 to 15 cents on the retail dollar are obtained illegally. Some boosters use the profits from this enterprise to support families and lifestyles that are not unlike the neighbors on the streets where we live. Some boosters, however, steal to support drug habits or other addictions.

Interviewing a Typical Booster

Years ago, investigators from Target Corporation interviewed an apprehended, prosecuted, and convicted booster on camera. This individual was not a junkie, but, instead, was very much a “guy next door.” Because his sentencing and probation judge required him to give these interviews, he was frightened for his own safety. The organization with whom he had been previously affiliated in his career as a booster would likely kill him if they knew he was talking with both his victims and law enforcement as to how, why, and with whom he was plying his trade.

During the interviews, this man admitted he had made $120,000 to $150,000 cash per year during the previous three years. The organization that purchased the stolen products from him was very specific as to what products they wanted. With his hit list, he would target drug stores, grocery stores, discount stores, and convenience stores from San Francisco to San Diego. He usually “worked” between four and five days a week, never on weekends, and took vacation from Thanksgiving through Christmas. He had been caught occasionally, but no one who had caught, arrested, or prosecuted him knew the extent of his activities and the organization behind him until his last arrest.

The Organized Theft “Sales Cycle”

Whether the booster is part of a highly organized system, such as the individual interviewed by Target’s national investigation service team, or an independent thief, the path the stolen product takes is generally the same. The booster will steal the items from numerous retailers and then sell the products to a fence. The fence then “markets” the product by offering it for sale from a booth in one of America’s thousands of flea markets or through the world’s largest flea market: the Internet.

The products sold by the fence through these venues are generally near their expiration date or the cartons are slightly damaged. That doesn’t matter to the fence, however, because what he is really doing is advertising that he is in the business and can get product from his boosters.

The middle buyer, the one who buys in quantity from the fence, sees the products offered for sale by the fence and negotiates the desired items and quantities he will purchase. These “orders” get back to the boosters through the fence, and the boosters then steal the requested items from retailers.

The middle buyer will resell large quantities of products to a separate repackaging operation, or could be the owner of a repackaging operation himself. These repackagers usually operate in a facility that is about 3,000 to 5,000 square feet. Inside are several employees, usually undocumented immigrant women, who clean up stolen product. They use cotton swabs with fingernail polish remover, alcohol, or lighter fluid to remove price tickets and EAS tag adhesive residue. They may change expiration dates and lot codes. They then repackage the small items into master cases complete with the brand name of the product stamped on the outside. Sometimes this stolen, repackaged product is comingled with illegally diverted or counterfeit product at the repackager. Sometimes the comingling takes place at the next destination, which is the wholesaler.

The wholesaler is often a large, publicly traded company that on the surface appears to be legitimate. Some of these wholesalers have been sued by product manufacturers and investigated by federal law enforcement, but their battery of lawyers has always managed to keep them in business.

These wholesalers sell their products to retailers. While the wholesalers do legitimately buy product from manufacturers that are overruns or special deals, the legitimate product sometimes finds itself comingled with the illegitimate and counterfeit product that then is purchased by the unsuspecting retailer and placed on the store shelves to be purchased by consumers.

Can you imagine buying a container of pain reliever that at one point in its life cycle may have been concealed in the filthy underwear of a strung-out dope addict?

This article was excerpted from Organized Retail Theft, which was originally published in 2001.

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