10 Biggest Crimes to Hit Retailing
Retail crimes involving highly organized groups, gangs or individuals cost retailers a staggering $34.3 billion in 2008. As the economy continues to deteriorate, shoplifting and retail crimes are hitting merchants at an increasing rate. Crime rings are stealing thousands of dollars worth of merchandise and reselling it for mega-profit. Here are 10 of the biggest crimes to hit retailers ranging from Wal-Mart and Home Depot to Hobby Lobby and eBay.
Massive Fencing
Two criminal organizations made up of 17 thieves were charged in a crime theft ring in San Jose, California in June 2008 for their role in a large scale fencing operation to buy and sell over-the-counter health and beauty products. The goods were stolen from major chains including Safeway, Target, Walgreens, Wal-Mart, Longs Drugs, Raleys, Nob Hill and Save Mart. Professional shoplifters, known as boosters sold the stolen goods to fences that in turn would sell the product to wholesale distributors. The distributors then sold the stolen merchandise back to retailers. The charge against the first group seeks a money judgment of $14,257,302 as well as the forfeiture of real property, five vehicles, approximately $165,000 in cash, nine diamonds, twelve gold bars, and other assorted watches and jewelry, and the funds in ten bank accounts, totaling $81,502.93. The second charge seeks a money judgment of $5,682,626, two pieces of real property, one vehicle, approximately $24,000 in cash and the funds in five bank accounts, totaling $84,077.81.
Large Ticket Scheme
A Florida man involved in leading a counterfeiting scheme that targeted Lowe's, Home Depot, Wal-Mart and Meijer was sentenced to federal prison for possession and use of unauthorized access devices. The massive scheme to steal large ticket merchandise from retail stores in Florida, South Carolina, North Carolina, Virginia and Ohio took place between December 2003 and November 2005. After entering victim stores, criminals would place bogus UPC labels over actual store UPC pricing labels appearing on higher-priced items. This allowed them to purchase merchandise at prices below the actual retail price. The criminals would then resell the stolen property through internet sales on eBay and at local pawn shops. In addition, they would return merchandise to other victim stores after they had removed the false UPC labels, receiving either full cash refunds or merchandise debit cards.
Millions Worth of Toys Missing
More than $1 million in merchandise was stolen from a Hobby Lobby store in South Carolina and supplied to two illegal copycat stores. Stephen Lee Knight and Christopher Fredrick Marcie, a former manager of Hobby Lobby, were arrested on charges of criminal conspiracy and fraud charges. The stolen goods were sold at discounts of up to 75 percent off at two locations. All of the estimated $150,000 in inventory sold was stolen from Hobby Lobby. According to reports, the alleged thefts began in July 2008. Hobby Lobby contacted authorities on January 13, 2009 to complain about stolen items after $1 million in retail value was reported missing.
Scam on eBay
Seven individuals were indicted for a $1.2 high-tech fencing scheme involving shoplifted merchandise auctioned on eBay from February 2005 through December 2007. Boosters would steal merchandise from retail stores and deliver it to an individual who then advertised and sold the stolen merchandise to buyers outside the state of Missouri through eBay. Among the merchandise that was stolen includes electronic dog collars, a computer hard drive, electronic toothbrushes, GPS devices, nail guns and a radar detector. The stolen merchandise was purchased by and delivered to buyers from several states including California, Alaska and New Jersey.
Jewelers Under Attack
A Connecticut man pleaded guilty in February 2008 to four counts of Hobbs Act Robbery relating to his role in the armed robberies of four jewelry stores in Connecticut and Massachusetts. The criminal orchestrated and executed the armed robberies at Hannoush Jewelry on July 20, 2005. Lux Bond and Green Jewelry on February 1, 2006, Betteridge Jewelers on September 1, 2006 and Lux Bond and Green Jewelry on September 21, 2006. The man orchestrated many of these robberies disguised in women's clothing and a wig. He also carried a firearm to forcibly steal at gunpoint assorted jewelry, including diamond rings, with an estimated retail value of approximately $388,000.
Tractor-Trailer Size Loads of Merchandise
A network of people stole from convenience store retailers Kings Food Market, 1 Star Discount Store and Rosemont Wholesale's warehouse. Criminals seized more than 20 tractor-trailer loads of merchandise that included vitamins, cold medicine, over-the-counter pharmaceuticals, baby formula and hygiene products from a warehouse. The owners of the convenience stores allegedly bought the goods from these individuals at prices far below their actual value. Some of the products were sold at the convenience stores, but much of the merchandise was allegedly transferred to Rosemont Wholesale's warehouse. Searches of the dumpsters outside the warehouse during the investigation turned up thousands of discarded security tags and bar code labels from major retailers.
Theft Ring at Stop N Shop
A Lexington, Kentucky man was sentenced to 72 months in prison for his role in a $60 million organized retail theft ring. Abduhl Sulaiman, owner of the Stop N Shop Discount Food store in Lexington, used the store to launder more than $60 million primarily for a retail theft ring called Alpha Trading in Louisville, Kentucky. Alpha Trading shoplifted baby formula and health and beauty aids from stores for the purpose of selling the products at a discounted rate. The ring paid Sulaiman approximately $500,000 to cash checks and wire money for members of the crime ring at his grocery store.
Counterfeit Software
Six people were sentenced for selling more than $25,000,000 worth of counterfeit Rockwell Automation computer software on eBay in violation of criminal copyright infringement laws. The Rockwell Automation software sold by the six individuals had a combined retail value of $25,107,592. From June 4, 2003 through Aug. 4, 2004, Craig J. Svetska initiated 376 or more separate online auctions on eBay under various user names, in which he sold the software for a personal profit of approximately $59,700. The actual retail value of this software was more than $7.6 million. The majority of the software applications sold on eBay had an individual retail price ranging from approximately $900 to $11,325.
Online Fraud
Two brothers were arrested for selling more than $6 million in pirated software.
Thomas Robberson grossed more than $150,000 selling software with a retail value of nearly $1 million by operating the Web sites www.Bestvalueshoppe.com and www.TheDealDepot.net. Maurice Robberson grossed more than $855,000 selling software with a retail value of nearly $5.6 million through his operation of the Web sites www.CDsalesUSA.com and www.AmericanSoftwareSales.com. From late 2002 through October 2005, these individuals sold counterfeit software from Adobe Systems, Autodesk and Macromedia at discount prices. These counterfeit items were manufactured by members of the conspiracy and included labels that featured trademarks and service marks of the legitimate software companies.
Counterfeit Cisco Hardware
An ongoing initiative known as Operation Cisco Raider between the United States and Canada has resulted in more than 400 seizures of counterfeit Cisco network hardware and labels with an estimated retail value of more than $76 million. The initiative targets the illegal importation and sale of counterfeit network hardware, in particular network routers, switches, network cards and modules manufactured by Cisco. Over the last two years, Operation Cisco Raider has identified approximately 3,500 counterfeit network components with an estimated retail value of over $3.5 million and has led to a total of ten convictions and $1.7 million in restitution.
In order to develop our list of Top Ten Retail Crimes, RIS News performed a comprehensive search of field reports posted on the FBI's Web site. If we have missed a serious account of retail crime on our list, please let us know.
For more information on Retail Crime please visit:
Cyber Crime Tops $1 Trillion
Crime Wave Explodes in Retailing
Massive Fencing
Two criminal organizations made up of 17 thieves were charged in a crime theft ring in San Jose, California in June 2008 for their role in a large scale fencing operation to buy and sell over-the-counter health and beauty products. The goods were stolen from major chains including Safeway, Target, Walgreens, Wal-Mart, Longs Drugs, Raleys, Nob Hill and Save Mart. Professional shoplifters, known as boosters sold the stolen goods to fences that in turn would sell the product to wholesale distributors. The distributors then sold the stolen merchandise back to retailers. The charge against the first group seeks a money judgment of $14,257,302 as well as the forfeiture of real property, five vehicles, approximately $165,000 in cash, nine diamonds, twelve gold bars, and other assorted watches and jewelry, and the funds in ten bank accounts, totaling $81,502.93. The second charge seeks a money judgment of $5,682,626, two pieces of real property, one vehicle, approximately $24,000 in cash and the funds in five bank accounts, totaling $84,077.81.
Large Ticket Scheme
A Florida man involved in leading a counterfeiting scheme that targeted Lowe's, Home Depot, Wal-Mart and Meijer was sentenced to federal prison for possession and use of unauthorized access devices. The massive scheme to steal large ticket merchandise from retail stores in Florida, South Carolina, North Carolina, Virginia and Ohio took place between December 2003 and November 2005. After entering victim stores, criminals would place bogus UPC labels over actual store UPC pricing labels appearing on higher-priced items. This allowed them to purchase merchandise at prices below the actual retail price. The criminals would then resell the stolen property through internet sales on eBay and at local pawn shops. In addition, they would return merchandise to other victim stores after they had removed the false UPC labels, receiving either full cash refunds or merchandise debit cards.
Millions Worth of Toys Missing
More than $1 million in merchandise was stolen from a Hobby Lobby store in South Carolina and supplied to two illegal copycat stores. Stephen Lee Knight and Christopher Fredrick Marcie, a former manager of Hobby Lobby, were arrested on charges of criminal conspiracy and fraud charges. The stolen goods were sold at discounts of up to 75 percent off at two locations. All of the estimated $150,000 in inventory sold was stolen from Hobby Lobby. According to reports, the alleged thefts began in July 2008. Hobby Lobby contacted authorities on January 13, 2009 to complain about stolen items after $1 million in retail value was reported missing.
Scam on eBay
Seven individuals were indicted for a $1.2 high-tech fencing scheme involving shoplifted merchandise auctioned on eBay from February 2005 through December 2007. Boosters would steal merchandise from retail stores and deliver it to an individual who then advertised and sold the stolen merchandise to buyers outside the state of Missouri through eBay. Among the merchandise that was stolen includes electronic dog collars, a computer hard drive, electronic toothbrushes, GPS devices, nail guns and a radar detector. The stolen merchandise was purchased by and delivered to buyers from several states including California, Alaska and New Jersey.
Jewelers Under Attack
A Connecticut man pleaded guilty in February 2008 to four counts of Hobbs Act Robbery relating to his role in the armed robberies of four jewelry stores in Connecticut and Massachusetts. The criminal orchestrated and executed the armed robberies at Hannoush Jewelry on July 20, 2005. Lux Bond and Green Jewelry on February 1, 2006, Betteridge Jewelers on September 1, 2006 and Lux Bond and Green Jewelry on September 21, 2006. The man orchestrated many of these robberies disguised in women's clothing and a wig. He also carried a firearm to forcibly steal at gunpoint assorted jewelry, including diamond rings, with an estimated retail value of approximately $388,000.
Tractor-Trailer Size Loads of Merchandise
A network of people stole from convenience store retailers Kings Food Market, 1 Star Discount Store and Rosemont Wholesale's warehouse. Criminals seized more than 20 tractor-trailer loads of merchandise that included vitamins, cold medicine, over-the-counter pharmaceuticals, baby formula and hygiene products from a warehouse. The owners of the convenience stores allegedly bought the goods from these individuals at prices far below their actual value. Some of the products were sold at the convenience stores, but much of the merchandise was allegedly transferred to Rosemont Wholesale's warehouse. Searches of the dumpsters outside the warehouse during the investigation turned up thousands of discarded security tags and bar code labels from major retailers.
Theft Ring at Stop N Shop
A Lexington, Kentucky man was sentenced to 72 months in prison for his role in a $60 million organized retail theft ring. Abduhl Sulaiman, owner of the Stop N Shop Discount Food store in Lexington, used the store to launder more than $60 million primarily for a retail theft ring called Alpha Trading in Louisville, Kentucky. Alpha Trading shoplifted baby formula and health and beauty aids from stores for the purpose of selling the products at a discounted rate. The ring paid Sulaiman approximately $500,000 to cash checks and wire money for members of the crime ring at his grocery store.
Counterfeit Software
Six people were sentenced for selling more than $25,000,000 worth of counterfeit Rockwell Automation computer software on eBay in violation of criminal copyright infringement laws. The Rockwell Automation software sold by the six individuals had a combined retail value of $25,107,592. From June 4, 2003 through Aug. 4, 2004, Craig J. Svetska initiated 376 or more separate online auctions on eBay under various user names, in which he sold the software for a personal profit of approximately $59,700. The actual retail value of this software was more than $7.6 million. The majority of the software applications sold on eBay had an individual retail price ranging from approximately $900 to $11,325.
Online Fraud
Two brothers were arrested for selling more than $6 million in pirated software.
Thomas Robberson grossed more than $150,000 selling software with a retail value of nearly $1 million by operating the Web sites www.Bestvalueshoppe.com and www.TheDealDepot.net. Maurice Robberson grossed more than $855,000 selling software with a retail value of nearly $5.6 million through his operation of the Web sites www.CDsalesUSA.com and www.AmericanSoftwareSales.com. From late 2002 through October 2005, these individuals sold counterfeit software from Adobe Systems, Autodesk and Macromedia at discount prices. These counterfeit items were manufactured by members of the conspiracy and included labels that featured trademarks and service marks of the legitimate software companies.
Counterfeit Cisco Hardware
An ongoing initiative known as Operation Cisco Raider between the United States and Canada has resulted in more than 400 seizures of counterfeit Cisco network hardware and labels with an estimated retail value of more than $76 million. The initiative targets the illegal importation and sale of counterfeit network hardware, in particular network routers, switches, network cards and modules manufactured by Cisco. Over the last two years, Operation Cisco Raider has identified approximately 3,500 counterfeit network components with an estimated retail value of over $3.5 million and has led to a total of ten convictions and $1.7 million in restitution.
In order to develop our list of Top Ten Retail Crimes, RIS News performed a comprehensive search of field reports posted on the FBI's Web site. If we have missed a serious account of retail crime on our list, please let us know.
For more information on Retail Crime please visit:
Cyber Crime Tops $1 Trillion
Crime Wave Explodes in Retailing