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WASHINGTON -- A Federal Bureau of Investigation special agent who assisted Safeway, Inc. in shutting down a complex organized retail crime ring, has been awarded the National Retail Federation's 2006 Law Enforcement Retail Partnership Award.
Agent Chris Frazier of the Portland, Oregon Field Division accepted the award yesterday at the NRF Loss Prevention Conference and Exhibition in Minneapolis. Frazier was nominated for the award by Rick J. Whidden, director, loss prevention, Safeway, Inc.
"The FBI has developed a true public-private sector partnership in the fight against organized retail crime," said NRF v.p. of loss prevention Joseph LaRocca in a statement. "This case and the work being done on the Retail Loss Prevention Intelligence Network are great examples of the collaborative efforts between the retail industry, the Bureau, and law enforcement agencies across the country."
NRF noted that for years, retailers in the Portland area were being victimized by organized retail theft. Businesses that looked like second-hand stores were actually "fences" that paid cash for new items, such as over-the-counter pharmaceuticals, cigarettes, DVDs, health and beauty products, glucose test strips, nicotine gum, and small appliances. Driven by a regular source of cash, shoplifters would steal up to $3,000 per day from retailers and then sell it to the fences for approximately 15 to 30 percent of its retail value. The fences would turn around and sell the merchandise to consumers and other illegal businesses for up to 25 percent to 50 percent of the retail value.
In February 2001, investigators at Safeway were able to identify three local fences that were actively buying a large volume of stolen over-the-counter merchandise and reselling it to out-of-state wholesalers. One year later, Safeway contacted the FBI and began what would become the first phase of a multi-phased organized retail crime investigation.
Throughout the next nine months, the FBI documented two local fences that had successfully shipped more than $1.5 million worth of stolen goods to an illegitimate wholesaler in Florida. In December of 2002, search and seizure warrants were executed for the two Portland fence locations and the Florida warehouse. As a result, eight people were indicted on federal interstate transportation of stolen property, conspiracy, and money laundering charges. Officials recovered $1.5 million in merchandise.
Phase II of the investigation began the following month, using cooperating witnesses. After conducting hundreds of hours of surveillance, the task force documented more than 523 shoplifting incidences involving 23 different retailers in two states. Case information revealed that the fence had been purchasing stolen merchandise for more than 20 years, totaling $3.5 million worth of goods a year. Sixteen people were indicted on federal interstate transportation of stolen property, conspiracy, and money laundering charges. Additionally, $950,000 in cash and $350,000 worth of over-the-counter products were recovered.
In January of 2004, the task force initiated phase III of the project, targeting 10 local second-hand stores that had grown in volume since the closures of phases I and II. The previous years' surveillance and cooperating witnesses were able to track the ring through 10 western states, discovering that one shoplifting team had brought in more than $1 million worth of merchandise in an 18-month period.
The four-year undercover investigation resulted in federal indictments of 49 people, including 16 professional shoplifters, seven illegitimate out-of-state wholesalers, and 26 local fence operators. In addition, nearly $7 million worth of merchandise and another $1 million in cash were recovered. The subjects of phases I and II were convicted and received federal sentences between three and seven years. The subjects of phase III are awaiting trial and face similar sentences.
In related news, NRF revealed earlier this week that 81 percent of loss prevention executives surveyed indicated their companies have been victims of organized retail crime. Almost half (48 percent) of those polled also said that there has been a slight increase in activity since last year.
Nearly everyone surveyed (93 percent) said they were concerned about organized retail crime activity and the problem for them is getting worse, not better. Of those polled, 41 percent said organized retail crime was a significant or severe issue, compared to only 30 percent of respondents last year.