San Jose Organized Retail Crime Bust Highlights Growing Crime Problem 

Arlington, VA - 6/5/2008 

The announcement today by federal and local authorities of the takedown of a nationally organized retail crime ring in San Jose, CA, highlights a significant and growing criminal enterprise in the United States and the need for federal legislation to combat it.

San Jose police, along with the IRS and FBI announced today more than a dozen arrests, seizing massive quantities of cash and stolen retail merchandise; concluding a 2 ½ year multi-agency criminal investigation in the South Bay Area.

Organized retail crime(ORC) often involves highly sophisticated crime rings. Typically crime rings will steal and stockpile huge quantities of merchandise in a targeted area. They then resell the stolen merchandisethrough fence locations, flea markets, swap meets, pawn shops and increasingly on Internet auction sites. In many cases, these crime rings use the profits to fund other criminal activities. According to the FBI, organized retail crime results in more than $30 billion in losses each year to retailers.

“Organized retail crime threatens the safety of American citizens,” said Paul Jones, RILA vice president of asset protection. “The products that are stolen and sold as a result of ORC are often unsafe and threaten the well being of consumers.”

Organized retail crime rings have been linked to larger organized crime organizations, including the Gambino crime family and MS13.

The suspects identified in the San Jose case are suspected of buying massive quantities of stolen merchandise from shoplifting “booster” teams and selling the discounted items, which included teeth whiteners, razor blades and over-the counter drugs, in San Jose and throughout the United States.

At a press conference this morning, San Jose police displayed and distributed a video of local San Jose storefronts operating as “shadow supermarkets.” Stolen merchandise, along with suspects’ photographs, were on display at the conference. Several retailers, including Safeway and Walgreens, cooperated in the investigation.

There are substantial risks to consumers who purchase health and beauty items from online auction sites. Without a secure supply chain and the anonymity of sellers, consumers could easily be exposed to harmful products that have been potentially tampered with. For their safety, the Retail Industry Leaders Association encourages consumers to rely on traditional retail sources when making these purchases.

“Without a federal law targeting this kind of criminal enterprise, these crimes will continue to occur and unwitting consumers will remain at risk,” added Jones.

RILA would like to thank San Jose Police Chief Robert L. Davis, the San Jose Police Force, San Jose Mayor Chuck Reed, U.S. Attorney Joseph Russoniello, the IRS, and the local FBI for all their hard work.

The Retail Industry Leaders Association (RILA) promotes consumer choice and economic freedom through public policy and industry operational excellence. Its members include the largest and most successful retailers operating in the U.S.--which together provide millions of jobs and operate more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad. 

 

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