Organized retail crime taking off in Canada
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Dec 12, 2014  |  Vote 0    0

Organized retail crime taking off in Canada

Shoplifting is big business in the criminal underworld, with organized gangs systematically stripping stores. Retailers are fighting back

OurWindsor.Ca

From a bland Toronto office filled with large television monitors, Sean Sportun keeps an eye on 560 Mac’s stores in Canada.

The live video streams randomly from the locations. Most of it shows honest customers at counters, plunking down merchandise, paying and leaving.

Then Sportun, manager of security and loss prevention for the convenience store chain for central Canada, loads a recorded clip. It shows a slim woman in a head scarf, sweater and floor-length skirt, sneaking into the back room of a Mac’s in Parry Sound.

The store’s walk-in safe is open and the woman heads straight for it. She stuffs merchandise into laundry-sized bags concealed beneath her skirt. The bags are latched onto a belt around her waist.

There is a name for her garment: It’s called a booster skirt.

After stuffing the bags to capacity, she hobbles out of the backroom. She is no longer slim.

Her skirt has ballooned out and she knocks merchandise onto the floor in her wake.

Stepping out of the back room, she is engulfed by accomplices who shield her from view of the lone clerk as they exit.

At the counter, the clerk is distracted by two more gang members asking about products hanging on the wall behind her. They make a small purchase and leave.

The clerk, sensing that something has gone wrong, darts into the back room to urgently replay the surveillance tape. She calls police.

Total take: $30,000 of tobacco products in five minutes.

That next day the gang was at work in the GTA. They were arrested at a Winners in Thornhill after police were alerted by Sportun.

“They work off the highways. They’re very transient. They will jump from place to place, from province to province, wherever they feel they can get the biggest bang for their buck,” says Sportun.

“For the most part, these folks are really good at what they do. They train for it.”

The Mac’s incident was an example of sophisticated, organized retail crime — the kind that is costing Canadian retailers an estimated $4.67 billion a year.

According to a social media campaign last year, consumers paid 20 per cent more for goods as a result of retail theft.

“Things have changed immensely. The organized piece wasn’t as big ten years ago. It was prevalent in the U.S., but it was not as big an issue for us. We would have opportunistic theft, now we’re dealing with very organized gangs. These guys steal $10,000 to $20,000 a day or more,” says Don Berezowski, divisional vice-president, loss prevention and safety for Sears Canada.

“We’re talking a small percentage of the population here, but they do a lot of damage,” says Berezowski.

In some of the busiest stores, 300 to 400 shoplifting arrests are made every year.

Thieves use a variety of methods, but most of them involve an element of distraction. They also use specially lined bags to defeat store security alarms. They use props, including wheelchairs and even costumes, like a nun’s habit. They rely on ruses, like walking out the door beside a customer who appears unimpeachably honest.

When the alarm goes off, the honest customer stops and looks around. The thief, meanwhile, keeps moving forward, into a waiting car or busy crowd.

In an interesting twist, the booster gang at Mac’s in Parry Sound had two fake babies with them, echoing an incident in Barrie this month. A man and a woman are being sought after they looted an electronics store, stuffing merchandise into a fake pregnancy belly.

“What we are seeing is more sophistication, more organization,” says Toronto Police Services Superintendent Douglas Quan.

“We can have the same suspect working in Toronto and they show up in Calgary the next week doing the same thing. They’re mobile. With rental cars and mobile phones and fraudulent identification and credit cards, it gets multi-layered. It is advancing. They are becoming more sophisticated with each year.”

In Toronto, the stolen goods are sold at pop-up events, warehouse sales, flea markets and low-income malls in neighbourhoods where people are so busy trying to make ends meet, they won’t ask too many questions if the price is low, Quan says.

Stolen goods may also show up mixed among legitimate goods at convenience stores and discount stores owned by unscrupulous vendors.

But the crimes in Toronto that get the most attention are drug crimes, gun crimes and gangs.

“Toronto, as a larger city, we unfortunately have to deal with the largest crimes and work backwards,” says Quan.

Still, police and loss prevention experts in Toronto, Vancouver and Calgary are finding innovative ways to crack down on organized retail crime.

Some retailers conduct their own investigations, following suspects and conducting surveillance, evidence that is then handed over to police, says Sportun, who is also vice-chair of Toronto Crime Stoppers.

In the case of the back room Mac’s thefts, Sportun sent out a security alert on the Toronto Association of Police and Private Security (TAPPS) network. The TAPPS system is accessible by police and approved retailers as an investigative information sharing portal.

The TAPPS system is not accessible to the public, but members can scroll through pictures of criminal activity and suspects, making it easier to spot repeat offenders and organized retail crime activity.

In Toronto last year, a joint investigation by loss-prevention officers from Aritzia, the Gap, Mexx and Toronto Police resulted in three arrests in connection with an elaborate and organized shoplifting ring targeting mall stores.

Nearly $390,000 in clothing had been stolen and $90,000 in personal items, including shampoo and hand cream, for a grand total of nearly half a million dollars.

The stolen goods were allegedly being sold from a semi-detached home in the Jane and Wilson area.

“It was the first time I saw a residence turned into a store like that,” said Toronto Police Detective Bruno Miron.

Because the case remains before the court, Miron was unable to provide further details.

According to a police press release issued at the time, the goods had been stolen from major chain retailers across southwestern Ontario.

The items seized included 1,103 pairs of pants, 1,532 shirts and sweaters and 1,563 bras.

The three-man anti-fencing unit at Vancouver Police Department (VPD) has taken down 53 fencing operations in three years, shutting down underground stores where goods from Aritzia, Costco, the Gap, Holt Renfrew and Sport Chek, among others, were being sold at half price.

Typically the fencing operation is run by 1-3 people and is based on friendships or family relationships. Knowledge of the illegal stores is spread through word-of-mouth, according to VPD Detective-Constable Kirk Miles.

“They’re not running guns on the side. This is their job, this is what they do, moving stolen property,” says Miles.

Fencing organizations often rely on the homeless and addicts to steal for them.

One small business owner in Surrey was able to collect $80,000 worth of pharmaceuticals in two months, buying as much over-the-counter medication, perfume and makeup as he could get from addicts and the homeless.

He sold the products from the back door of his legitimate business, for about 50 per cent of retail, no taxes. He had a huge cache at his house.

“He used a method we called predatory fencing,” said VPD Detective-Constable Doug Fell. “All he is doing is sitting in his shop, and all the drug users — anyone who needed $10 for crack . . . he would buy stolen goods for 10 cents on the dollar.

“We use the word predatory because it describes the relationship between him and the boosters. He is the person with the money. The addict is desperate, vulnerable, they will do as directed for him. He is exploiting these people to make good money. He had a very nice house, a second house, and three cars.”

The majority of fencing operations are moving into retail clothing, says Kirk.

Detective-Constable Alen Ivezic has been working undercover on fencing operations for two years. He poses as a drug addict selling stolen property. Fences give him lists of items to steal.

“One person even drew a map, telling me what Skytrain to take, where to get off, how to defeat security, when security was weakest during the day,” says Ivezic.

“They wanted it within an hour or two at the most. I came back with the items. I put it right by their cash till and they paid me right from the cash till, immediately.”

Sometimes he would be directed to unload an entire backpack of stolen goods in the back of the store.

“As soon as I was done, the next person was in line, waiting to do the same thing. It was that fast,” says Ivezic, adding that he was subjected to verbal abuse by the fences.

He was ridiculed and threatened with physical violence and was offered less for the goods than he’d been promised.

The underground clothing stores in Vancouver are in nondescript locations, in the basement suite of a home in a residential neighbourhood, or in rented office space.

There are display racks and tables and the clothing is laid out in men’s and women’s sections. Many of the items still have anti-theft devices, which the illegal store operators remove after purchase. One underground retailer the team arrested had his own anti-theft devices.

Everything still has the original retail tag on it so buyers know the goods are not counterfeit. The price is 50 per cent off retail.

“Anything that is a popular chain store in a mall, you will find in these places. I describe them as a kind of Winners, where people go in every day to see what is new,” says Fell.

“It’s spectacular to watch a busy one. You can see upwards of 20 people in an hour going into these places and coming out with bagfuls. The shop is open for a couple of hours. People shop for about 30 minutes at a time,” says Fell.

“It’s moms, it’s dads, it’s pregnant moms taking kids in, grandparents taking their kids, in Acuras, Land Rovers, Pathfinders, Mercedes — high-end cars. There is no one buying this product that is hurting. It’s not a poor person buying it. These are people who fully know that everything is stolen. It’s advertised as stolen.”

The team has seized $1.7-million in clothing.

They have had significant success working with the city to obtain business license suspensions, with more than 20 businesses losing their license for weeks or forever.

“If you’ve ever run a business and had to shut it down for any period of time, it’s a terrific loss,” says Fell.

Many retailers are victimized every single day, multiple times a day, sometimes in one store, sometimes across different stores in the chain.

Sportun once saw thieves walk out of Ikea, where he used to work in security, carrying a couch. Nobody stopped them because nobody could believe that anyone had the nerve to do it.

A common theft at big box retailers involves thieves boldly walking out of stores with boxed merchandise — who’s going to stop someone who looks like they’re struggling to carry something?

Loss prevention expert Peter Horsley remembers one such theft involving a man who had walked into the back of a big-box store, put two televisions on a trolley and was putting them into the trunk of his car when he was apprehended.

His explanation? He just wanted to see if the two boxes were going to fit in the trunk. A check revealed he had a long criminal record.

“It’s so matter-of-fact you want to believe it, so bold and so brazen, you can’t believe that it’s happening,” says Horsley, chief operating officer of the company Loss Prevention Services Ltd.

“We have apprehended everyone from homeless transients to respected professionals.”

Being caught shoplifting could compromise a person’s ability to travel, Horsley points out. An arrest could show up during a background check at the border.

Even a caution and release can be recorded by police. Either one could affect your job prospects, says Horsley.

Horsley has also caught unscrupulous restaurateurs buying meat stolen from a grocery store.

“Meat has to be in the fridge. It can’t be in a gym bag for two hours and sometimes it is,” says Horsley.

Stores are also subjected to smaller thefts of opportunity by a wide variety of people.

“It’s nickel-and-diming a store to death, and then when a professional comes in and cleans them out, that really affects their bottom line.”

Horsley tells investigators not to blindly trust anyone, regardless of their age, gender or social status. There are homeless people who pay for their items and men in suits walking out with $300 worth of unpaid merchandise.

“We trust instinctively. We have to be thinking worst-case scenario backwards. As investigators, we have to work as pessimists,” he says.

“Did they pay, yes or no?” That is the one question they have to answer.

“If you start to use personal biases, you would be wrong.”

Part of the problem is that retail theft is viewed as a low-risk, high-reward crime. The penalties are minimal.

Sportun says that even people who offend multiple times are only held for a couple of days before they are out again.

He would like to see stiffer penalties. He says criminals know they won’t face serious jail time for stealing from a retailer, so they stick to it.

“They get out and two days later they commit another retail theft and while escaping they run someone over and hurt or kill them. Now is it important? Now will you lock them up?” asks Sportun.

Sportun warns against customers and staff challenging thieves. Loss prevention experts also need to understand what they are up against.

The thief could be armed or intoxicated.

“As soon as you challenge them, they’re going to step up their aggression. Their adrenaline is pumping harder than yours — you’re going to lose,” says Sportun.

Berezowski of Sears sits on the private-sector liaison committee for the Canadian Association of Chiefs of Police. He has 26 years of experience in the field of loss prevention.

He believes that the growth of organized retail crime in Canada is due in part to the fact that police have more resources to fight drug and gun crimes than they do retail theft. Also, penalties for retail theft are low and the merchandise is quickly converted into cash, especially now, through online sales.

“Why now? In the U.S., legislation has been brought in targeting organized retail crime with tougher penalties. We haven’t gotten to that point yet,” says Berezowski.

Since 2008, 25 U.S. states have enacted legislation related to organized retail crime, according to a report from the U.S. National Retail Federation.

A law passed in Michigan in 2013 imposes sentences of up to five years for those found guilty of participating in retail theft rings, a far cry from the recent six-month conditional sentence given to a Toronto woman who was boosting clothing as part of a suspected organized retail crime operation.

According to an NRF survey of retailers, three in ten have noticed a reduction in organized retail crime in states where laws are present. More than half said the laws have enabled them to prosecute offenders more effectively.

Since organized retail crime rings often transport stolen goods through multiple jurisdictions, federal laws are necessary, too, according to the NRF report.

“There is clearly an issue with the prosecution of what may be, in some people’s opinion, a victimless crime,” says Stephen O’Keefe, vice-president, operations, for the Retail Council of Canada and a former retail loss prevention executive at Walmart Canada.

The RCC put a case for longer sentences to the federal minister of justice a few years ago, pointing out that no tax is being paid on any of the stolen merchandise, said O’Keefe.

The problem is that most police departments can’t afford to assign resources to the investigation of retail crimes, or actively maintain systems like TAPPS or Retail C.O.P. in Calgary.

A bill before the senate would give more flexibility to retail loss prevention officers to share information for the purpose of protecting people against crime.

“The sentencing guidelines are a moot point if you can’t get someone convicted for organized retail crime activity,” said O’Keefe.

For now, the job is in the hands of a growing cadre of loss prevention professionals, working with police.

“These organized crime rings aren’t getting scared. It will continue to grow until we are no longer the path of least resistance,” says Berezowski.

Toronto Star

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