The Current State of Organized Retail Crime

Asset Protection | Profit Enhancement | Retail Performance

THE CURRENT STATE OF

Organized Retail Crime ORC Special Edition 2022 | V21.2 losspreventionmedia.com

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ORC Special Edition 2022

Contents

Features

6

38

Addressing the

Human Trafficking

Scourge of ORC

and ORC

The Dark Truth behind ORC Criminal Networks

By Jack Trlica

8

By Courtney Wolfe

A Perfect Storm

for Organized Retail Crime

42

What Research Is

Retailers Partner in the Battle against ORC

Telling Us About the State of ORC

By Jacque Brittain, LPC

16

By Cory Lowe, PhD

Taking the Battle

against ORC to Another Level

By Jacque Brittain, LPC

Prosecuting

ORC Cases

Anne Marie Schubert

Applying Effective

Interviewing Skills to ORC Investigations

52

Leading the Push

for ORC Legislation With Jason Brewer, Michael Hanson, and Lisa LaBruno, Esq.

By David Thompson, CFI

30

48

One Prosecutor’s Thoughts on Laws, Partnerships, and Case Management

With District Attorney

Homeland Security Investigations’ New and Active Role

24

This ORC special edition is sponsored by the following partners.

54

Organized Retail

Prioritizing People’s

Safety in the Tidal Wave of ORC

Crime Associations A Directory of Local, State, and Regional ORCAs in the US

By Garett Seivold

ORC Special Edition 2022

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Security Solutions

Vladitto / ShutterStock.com

EDITOR'S LETTER

Jack Trlica Editor-in-Chief

ome loss prevention professionals think organized retail crime (ORC) has been around for decades. Others believe it is a relatively new phenomenon. No matter your point of view, ORC has become a real and present danger to retailers. Nobody has a definitive estimate of the dollar impact of ORC, but retailers will tell you that it has a major impact not only on their fiscal bottom line but also on the safety of store associates and consumers.

This first special edition of LP Magazine is focused solely on ORC and the many challenges and issues surrounding the topic. You will find inside these pages articles on a wide range of topics from the successful collaboration of the big three pharmacy retailers to how Homeland Security Investigations has joined the fight. From interviewing skills in ORC investigations to the safety aspect of store invasions to ORC’s link to human trafficking, and much more.

This first special edition of LP Magazine is focused solely on ORC and the many challenges and issues surrounding the topic.

We would like to thank all the many people who contributed to these various articles. We would also like to thank our sponsors who allowed us to print and distribute this magazine (see page 4).

Many of you reading this magazine either received it in the mail or picked it up at one of the industry events where we are handing it out. The magazine will also live on our website in a downloadable PDF format where others can find it.

Executive Editors James Lee, LPC JimL@LPportal.com Merek Bigelow MerekB@LPportal.com

Editorial Director Jacque Brittain, LPC JacB@LPportal.com Retail Technology Editor Tom Meehan, CFI TomM@LPportal.com

ORCAs Need Your Help This magazine has worked with organized retail crime associations (ORCAs) around the country for several years in an initiative we call ORCAs in Action. With a primary emphasis on assisting law enforcement, retail investigators, and prosecutors, ORCAs have proven to be an invaluable resource in the identification, investigation, and prosecution of those involved in ORC. These groups provide a platform for intelligence sharing and a forum for education and training on ORC-related topics, as well as a channel for networking and collaboration.

However, recently some of these ORCAs have struggled to survive, unable to raise even $1,500 to keep some of these associations running. Considering the immense reach of the problem and our ongoing calls for partnerships and collaboration, this serves as a stark contradiction to that message, and frankly, an indictment on those not willing to step up and get involved.

Public-private partnerships and cooperation between retailers must be seen as cornerstones in the fight against ORC, and both retailers and our public partners must be willing to contribute to the ORCA initiatives in terms of resources, membership, and leadership. We strongly encourage those retailers, solutions providers, and other organizations who have the means, please provide financial support to these organizations.

We’ve published a directory of these organizations on page 54. Please look for an ORCA in your area to get involved with. LPM’s Jacque Brittain, LPC, is our resident guru on ORCAs. You may contact him at JacB@LPportal.com for more information.

ORC Special Edition 2022

Editor-in-Chief Jack Trlica JackT@LPportal.com

Managing Editor Digital Courtney Wolfe CourtneyW@LPportal.com

Addressing the Scourge of ORC S

Powered by the Loss Prevention Foundation

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Senior Writer Garett Seivold GarettS@LPportal.com Contributing Writers Read Hayes, PhD, CPP Walter Palmer, CFI, CFE Ben Skidmore Shane G. Sturman, CFI, CPP David Thompson, CFI Director Of Digital Operations John Selevitch JohnS@LPportal.com Special Projects Justin Kemp, LPQ Kevin McMenimen, LPC Karen Rondeau Design & Production SPARK Publications info@SPARKpublications.com Creative Director Larry Preslar Advertising Strategist Ben Skidmore 972-587-9064 office, 214-597-8168 mobile BenS@LPportal.com Subscription Services New Or Change Of Address LPMsubscription.com or circulation@LPportal.com Postmaster Send change of address forms to Loss Prevention Magazine 128 Fast Lane, Suite 202 Mooresville, NC 28117 Loss Prevention aka LP Magazine aka LPM (USPS 000-710) is published bimonthly by Loss Prevention Magazine, 128 Fast Lane, Suite 202, Mooresville, NC 28117. Print subscriptions are available free to qualified loss prevention and retail professionals in the U.S. and Canada at LPMsubscription.com. The publisher reserves the right to determine qualification standards. For questions about subscriptions, contact circulation@LPportal.com. Periodicals postage paid at Mooresville, NC, and additional mailing offices.

© 2022 Loss Prevention Foundation

Loss Prevention, LP Magazine, LP Magazine Europe, LPM, and LossPreventionMedia.com are service marks owned by the publishers and their use is restricted. All editorial content is copyrighted. No article may be reproduced by any means without expressed, written permission from the publisher. Reprints or PDF versions of articles are available by contacting the publisher.

Statements of fact or opinion are the responsibility of the authors and do not necessarily represent the opinion of the publishers.

Advertising in the publication does not imply endorsement by the publishers. The editor reserves the right to accept or reject any article or advertisement.

ORC Timeline

Timeline of Events

Include Fence Investigation Activities IA-0005

Record Type: Controlled Buy Type of Controlled Buy: Business ...

Person Completing the Activity: L ...

2021 Nov 1

Estimated Purchase Cost: 129.57 ...

IA-0061 Record Type: Warrant Served Investigation Activity Location: Dal ...

2022 Jan 9

Status: In Progress

IA-0064 Record Type: Mobile Surveillance

ORC Overview Dashboard

Number of Days: 1 Location Type: Hotel/Motel

Case Value by Product Type 2022 Jan 17

ORC Cases by Month

Incidents by Investigator by Type

Status: In Progress

Type 1 Type 2 Type 3

IA-0061

1.2M

Record Type: Interview Investigation Activity Location: Dal ...

2022 Jan 22

View Full Report

Status: In Progress View Full Report

Incidents by Region

ORC Case Map

View Full Report

View Full Report

Open Alerts by Rule

75

View Full Report

View Full Report

Retailers Partner in the Battle against ORC

By Jacque Brittain, LPC, LPM Editorial Director

ORC Special Edition 2022

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Sergey Nivens / solarseven / Nerthuz / Billy333 / Shutterstock.com Photo Illustration by SPARK Publications

A Perfect Storm for Organized Retail Crime

T

he landscape of organized retail crime (ORC) has shown dramatic changes over the last several years and has grown more sophisticated, especially considering the volume of merchandise stolen, the criminal element involved, and the platforms used to resell stolen goods. According to the National Retail Federation (NRF), organized retail crime has risen by 60 percent since 2015, with nearly 70 percent of retailers reporting an increase in 2021.

With bad actors taking advantage of every opportunity, ORC can operate on a local, regional, national, or international scale.

Whether loosely planned or highly organized, these intricate operations are responsible for the loss of tens of billions of dollars each year and can devastate a retail business.

Retailers have a diverse selection of merchandise available on their shelves that have high consumer demand, and these products can be readily converted to profit by the illicit crews bludgeoning retail profits across the nation and world. Those involved can be deliberate, aggressive, and even violent in their pursuit of retail products, posing serious safety concerns in addition to extreme financial injuries.

If recent history has taught us anything, it is that every retail organization must be prepared to manage complex and disruptive situations, and ORC is no different.

But that does not mean we must address these situations in a silo.

Working together in cooperative partnerships can lead to striking results.

LP Magazine recently met with leaders from CVS Health, Rite Aid, and Walgreens who are directing the efforts against ORC to get their insights into the current challenges and the story behind their exceptional partnership. In a highly volatile retail market, these leaders and their teams have bridged their competitive

differences to build a highly effective alliance in the ongoing battle against ORC. Ben Dugan, CFI, is the director of ORC and corporate investigations at CVS Health. With more than thirty years of retail loss prevention experience he is certified as an expert in ORC and diversion by the US Department of Justice. He is also currently the president of the national Coalition of Law Enforcement and Retail (CLEAR).

Steve Walker, LPC, CPht, is asset protection lead director of major crimes at Walgreens.

He has been with Walgreens for twenty-three years starting as an asset protection manager and has served as director for the past eight years. Prior to Walgreens, he dedicated seventeen years to law enforcement with the Arkansas State Police.

Jason Davies, CFI, CORCI, SMIA, is director of ORC and special investigations at Rite Aid. In addition to his nearly thirty years in retail loss prevention, he also serves as vice president of CLEAR and state director of the Florida Law Enforcement Property Recovery Unit (FLEPRU).

Working together and in tandem with law enforcement partners at the local, state, and federal levels, these teams have resolved a multitude of million-dollar-plus investigations all across the US, touching practically every major retail market in the country.

BRITTAIN: Let’s begin with the topic driving today’s discussion.

Why do you think we’ve seen such an increase in ORC activity across the board?

DAVIES: There are so many things contributing to the problem.

We have legislative concerns.

In many areas there is very little consequence to the criminal activity. Often there is little or no jail time, even after a conviction or multiple convictions. In some markets, we have seen hard pushes for bail reform and the

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raising of the felony thresholds, talk of defunding the police, and a general lack of respect for the rule of law. Combine that with the many issues surrounding the pandemic, and it has been a perfect storm for this type of activity.

WALKER: Legislation has simply not evolved to meet the threat.

Look at e-commerce for example, and the problems we are facing with the online marketplaces.

There is no teeth in the legislation and very little accountability. I think it’s more complicated than people make it out to be and that only contributes to the problem.

DUGAN: Decriminalization is playing a major role in the increase in ORC. However, ORC has really been on the rise since 2017 with the expansion of the online marketplaces. That’s when we really started seeing ORC activity grow exponentially.

And then, COVID was the tipping point, really accelerating what was already happening. In many ways, the criminal justice system basically grinded to a halt.

The courts were closed. Law enforcement was not responding to any nonviolent property crimes.

Thieves felt emboldened and the violence increased. Looking at the consequences of COVID, decriminalization, expansion of the online marketplaces, and so many other contributing factors, I agree it’s been a perfect storm for ORC. BRITTAIN: Can you expand further on how COVID has contributed to the problem?

DUGAN: COVID limited our resources in many different ways. The pandemic limited the manpower needed to deal with the problem. For example, many of our major sting operations were canceled due to the pandemic.

There are teams from many criminal organizations that should already be in jail—and they’re not.

We are still trying to play catch‑up

ORC Special Edition 2022

Ben Dugan

Steve Walker

Jason Davies

FEATURE A Perfect Storm for Organized Retail Crime

with large-scale operations, dealing with law enforcement to dismantle some of these big crews that we know exist. And delays in the retail world mean money and lost profits.

Every day these guys are on the streets, we lose money. In some cases, our companies are continuing to take significant losses to the same criminal organizations on a regular basis.

At the height of the pandemic, no one was going to plan and execute a huge operation where we needed a hundred law enforcement officers going out to one scene to manage the operation properly and safely.

creating their own sites to sell stolen goods to the public.

BRITTAIN: When we first started talking about the ORC epidemic years ago, many believed that it wasn’t quite as violent or sophisticated as people thought. How do you think that has evolved?

DAVIES: I think it’s not so much the problem has evolved as much as the perpetrator has evolved.

We still have professional crews stealing from our stores who don’t want to get in fights, be noticed, or become violent. They are the ones making $100,000 a year stealing

There are so many things contributing to the problem. We have legislative concerns. In many areas there is very little consequence to the criminal activity. Often there is little or no jail time. In some markets, we have seen hard pushes for bail reform and the raising of the felony thresholds, talk of defunding the police, and a general lack of respect for the rule of law.

Combine that with the many issues surrounding the pandemic, and it has been a perfect storm for this type of activity DAVIES: You had stores that were shut down or operating with fewer employees. You had individuals across the country that couldn’t work. Couple that with these emboldened boosters entering stores, wiping shelves clean, and creating havoc.

At the peak of COVID, many consumers stopped shopping in stores and were buying their goods online. It was a win‑win‑win situation for the online marketplaces, knowing that people would rather migrate to the online seller and have products delivered to their front door rather than going into the stores and possibly contracting COVID. The circumstances behind COVID were driving the demand, and the online marketplaces filled that demand.

The ORC networks took full advantage, many of whom were

ORC Special Edition 2022

from our stores. And then, you have the other side—those that are coming in and stealing by all means and methods and pose a greater risk to both our customers and associates.

When we see the violence uptick, it often involves younger offenders. We also have those with mental health and other issues. These offenders commonly use threats of violence and engage our associates. We see this more often in inner-city environments where local fencing operations are employing the homeless or serious drug addicts who have nothing to lose. They do the stealing for them. But at the end of the day, it all comes back to a lack of consequences.

DUGAN: I would add that I don’t think we understood everything about ORC ten or fifteen years ago either. We thought we knew, but

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we didn’t. We knew how it affected our individual businesses, but now the internet has made it easy for professional thieves to steal—and resell almost anything.

Boosters used to specialize.

They would travel across the country hitting CVS, Walgreens, and Rite Aid. That’s not the case anymore. They will go to Home Depot or Lowe’s. Then they will hit a Ross or TJX store. They will hit a high-end retailer, steal ten purses, and throw it in the back with a trunkful of Prilosec. We never used to see that kind of activity. Now, everyone is an entrepreneur.

WALKER: Criminals are adaptive and roll with the circumstances.

Many are adapting to the lack of the ability for police officers to respond in a prudent manner. For example, we just had an associate that was basically taken hostage as an ORC team wandered around the store stealing merchandise.

Many feel that the worst-case scenario is getting caught, and yet they are out the same day. The reward is worth the risk for them.

It’s a vicious cycle.

By the same respect, I do feel that perpetrators are becoming more sophisticated. Many of these groups have grown tremendously on the technology side, getting involved in some things that we probably haven’t seen before. As a society, I don’t know that we’re always adapting fast enough to keep up.

BRITTAIN: Let’s talk about legislation not keeping up. All of you have mentioned this as a contributing concern.

DUGAN: Steve and Jason are right.

Does everyone in the public sector understand the magnitude that we’re talking about? The amount of violence, the levels of theft, the financial damage and hardship that it causes? I don’t think many members of law enforcement or legislators truly understood ORC until Thanksgiving of 2021 when it appeared center stage

Photo by Brinsley Edwards

Leading the frontline field teams fighting the ORC storm across the country for the three major pharmacy retailers are pictured here (left to right): Jose “Joey” Varela, LPC, and Terry Mullen, senior managers, ORC and corporate investigations at CVS Health; John Moore, manager of ORC and special investigations for Rite Aid; and Bryan Lindsay, CFE, major crimes asset protection manager at Walgreens.

and sensationalized in the media following the events at Nordstrom stores in Northern California.

Despite the attention, some still hesitate. I don’t think the legislation has kept up, but I think most understand it now. The legislative process doesn’t always move as fast as we would like, but we’re making progress.

DAVIES: The over-arching problem is we are stuck treating the symptoms rather than the root cause of the issue, which is legislation. Retailers need their executive leadership to speak up.

We need their voices. We need more retailers that are willing to say to lawmakers, “We’re not going to take this anymore.” That is where we’re going to have the greatest impact long-term.

WALKER: We also have to enforce the laws we have. If we pass laws tomorrow, how will they be enforced? We’re going to have to go to law enforcement

and prosecutors and make sure they have the information they need. We need to make sure the laws are carried out effectively and efficiently.

BRITTAIN: Let’s talk about the partnerships between your three companies. What can you tell us more about how you work together?

it helps us affect positive change.

We understand pharmacy ORC. We listen to one another. We talk about solutions and strategies. We share ideas and our thoughts on tools and technologies that can improve upon those strategies.

Building partnerships and sharing the knowledge and strategy is just as important as investing in other resources.

The circumstances behind COVID were driving the demand, and the online marketplaces filled that demand. The ORC networks took full advantage, many of whom were creating their own sites to sell stolen goods to the public.

DUGAN: Our relationship is based on friendship and trust. The three of us have known each other and been friends for more than fifteen years, and our teams have known each other for a long time as well.

With the three of us now at the director level for the pharmacies,

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Don’t get me wrong—we invest a lot of money going after these criminal organizations, and it is definitely necessary. But if there was one thing that gives us the advantage over the bad guys, it is our ability to partner and work together.

ORC Special Edition 2022

FEATURE A Perfect Storm for Organized Retail Crime

DAVIES: I think that partnerships are at the heart of the evolution of ORC investigations. The Rite Aid ORC team works very closely with Walgreens and CVS in the field, down to the point where we share the same radio channels on our vehicle radios. We do the same surveillance training to mitigate risk and ensure that everyone operates on the same level. The relationships are a force multiplier.

We can’t do it on our own.

think it is a combination of respect and the ability to go out and put forth a good work product.

DAVIES: I agree. The biggest and most important piece is educating leadership, but also consistently marketing what we do—every win, no matter how small or how big. Asset protection leadership does not always do a good job marketing to the executive teams exactly what their team does

When we see the violence uptick, it often involves younger offenders. We also have those with mental health and other issues. These offenders commonly use threats of violence and engage our associates. We see this more often in inner-city environments where local fencing operations are employing the homeless or serious drug addicts who have nothing to lose.

BRITTAIN: You each have massive retail organizations behind you.

How do you bring them along for the ride? Company leadership is also enabling you to take that approach. How did you evolve that?

day-in and day-out and how it impacts the business, not just from a shrink standpoint, but from a brand standpoint. There are all these different things we must constantly teach and train and market.

WALKER: That is a critical point.

You must build that level of trust with senior leadership. That’s not to say it’s easy, because we are robust competitors in the retail market. But everyone knew that if we were going to get a foothold here and accomplish anything important in the battle against ORC, we were going to have to work together and communicate at a high level.

Part of it was educating senior leadership and building that trust.

We must be outcome-driven and fact-centric. We are all proud of our teams. I think we have put together a great a group of people. We are very conscious of the fact that whether we’re providing information to law enforcement or senior leadership, we must do it right. They looked at the reports and saw the shrink dollars, but just didn’t understand how the losses were happening. I

DUGAN: We had a joint meeting at the CLEAR conference with all our ORC folks along with all the VPs and senior executives.

We went over every major case that we are managing, just so the bosses could listen to us speak together—Walgreens, Rite Aid, and CVS Health.

Everything we do projects that teamwork. We talk about all the investigative partnerships with law enforcement and other retailers, so they understand that those relationships are extremely important to our success.

ORC Special Edition 2022

BRITTAIN: What do you recommend to other retailers out there? I mean what do you think that they need to be doing that can help promote that approach?

WALKER: Making sure they are involved and engaged, driving the education of legislators,

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law enforcement, and senior leadership. It is important that the problem is clearly understood, and that key decision makers have a true perspective on how ORC impacts society as a whole. Most are already taking the steps, but if you are a subject-matter expert on ORC, there is a responsibility to educate these critical partners about what the problem is and how to combat it.

DAVIES: The networking side is extremely important. That is where groups like CLEAR and the different organized retail crime associations across the country become key contributors, bringing us together to brainstorm different strategies and discuss different tools, techniques, and technologies. The sharing, triaging, and linking of data to intelligence is also an important part of it. We need to work together to educate company leadership of the tools available to share intelligence and link activity between retailers.

WALKER: Information sharing is more crucial now than ever before. We have evolved in how we interact with these nefarious people in our stores. The safety of our team members and customers is paramount. That is the first thing we tell everyone—we are not going to get someone hurt over these situations. We are taking a different approach to try and impact these groups. And I think that just makes it much more critical that we are able to share information. There should not be secrets when it comes to mitigating violence in our stores.

There just shouldn’t.

BRITTAIN: What message do you think is most important to send to the people in the stores? How do you expect them to respond if something happens in the stores?

WALKER: We have very robust, clearly detailed policies around what those interactions look like.

The first thing is to make sure

that every new team member is up to speed on what the expectation is, how to interact or not interact with them. The policies stress that if you feel unsafe, you should remove yourself from that situation. Their safety is paramount. At the end of the day, don’t put yourself in a position where you’re not safe.

Those policies must be very clear, understood, and reinforced.

DAVIES: Also, we need to give the employees a sense of confidence and security that we are taking positive action and something’s being done.

When there are gaps in the legal system when dealing with these individuals, they have to live with it. They are seeing people being arrested and then coming back an hour or two later and hitting the stores again. They are dealing

with enough stress with all that’s happening in the world, and they need to know they have our backing and support at all times.

We are communicating with the stores. We are providing them with detailed training. We speak to them on the importance of documentation when building a case against these illicit actors.

We are working with the district attorney offices and getting indictments. We are taking those wins and sharing them with the stores. The store teams get a bulletin, a case closure with images of the individuals in handcuffs, merchandise recovered, a fencing location that was identified, and how it all started with their documentation.

We are empowering them to let us take the bad guys outside the store and go after the fencing location.

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I don’t think we understood everything about ORC ten or fifteen years ago either.

We thought we knew, but we didn’t.

We knew how it affected our individual businesses, but now the internet has made it easy for professional thieves to steal—and resell almost anything.

WALKER: We also implement a post-event follow-up if an incident occurs in one of the stores. We have a third-party vendor that can provide counseling free of charge to team members. There can be a lingering level of stress if someone jumps over the counter or overwise traumatizes our associates. We make sure that we’re providing those kinds of after-action support to the team, and they know it is available.

ORC Special Edition 2022

FEATURE A Perfect Storm for Organized Retail Crime

BRITTAIN: Talk about your relationship with your law enforcement partners.

DAVIES: I believe all of us have some amazing relationships with our local, state, and federal law enforcement partners. I think there can be times when law enforcement can feel they’re fighting a losing battle. They can grow frustrated just like we do.

But we try in every encounter to bolster the fact that what they are doing has tremendous value and that we stand behind them. There are some amazing partners out there that go above and beyond.

They understand the impact that ORC has on their communities as well as our businesses, and they want to be part of the solution.

For example, NYPD precincts are bringing their new officers into our stores when we are conducting ORC blitz operations to teach

their communities. Believe me, if the command staff thinks that ORC is an issue and what is going on in our stores is a problem, then the street officer and that sergeant is going to want to get engaged and learn more about the problem as well.

That same message must be shared with the prosecutors. We have to educate the prosecutors as well, and make sure they understand the tremendous impact that ORC can have on their communities. We have presented to state prosecuting attorney’s associations to further educate them on the problem and share that message. They must understand the impact and level of violence these types of crimes are having on their community.

They need to understand more than the financial impact for us as a business, but how these huge losses affect the tax base. How

The over-arching problem is we are stuck treating the symptoms rather than the root cause of the issue, which is legislation.

Retailers need their executive leadership to speak up. We need their voices. We need more retailers that are willing to say to lawmakers, “We’re not going to take this anymore.” them how to suppress recidivist activity and learn more about how these groups operate. There are countless examples across the country where law enforcement partners visit our stores and work closely with our ORC investigators to address activity.

WALKER: We need law enforcement engaged. They want to get bad guys off the street. They want to do the right thing. But they also run up against roadblocks that they can’t control. They have to operate within the parameters of the current legislation and the laws that are on the books.

It’s not just about us. We must understand what is important to law enforcement and make sure they understand how this impacts

ORC Special Edition 2022

can these losses impact your city budgets, public services, and other key projects in your jurisdiction?

What about the safety factors?

How might this impact tourism, police funding, roads, or other necessary services? It’s not enough to say it’s important. We have to show them why it is important.

DAVIES: When we have these meetings with legislators, prosecutors, and other key public partners, the one thing that I would stress is not to go in alone.

Partner with other retailers that are experiencing similar issues.

Make sure they understand the magnitude of the problem, and the many different businesses being affected. Make sure they know this is a community problem that impacts everyone,

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not just an issue with one particular business. That holds a lot more weight.

Final Thoughts As we were finalizing this story, the teams at CVS Health, Rite Aid, and Walgreens were working together with San Francisco police and other law enforcement partners to initiate warrants and make arrests on another major ORC operation in the greater San Francisco area. These are not isolated incidents, and operations such as this one only further underscore the relentless attack on our retail stores by these criminal operations and the tremendous dedication and commitment by these retail teams and our law enforcement partners.

We have heard time and again the importance of partnerships and communication when dealing with the ORC storm involving fellow retailers, the law enforcement community, prosecutors, associations, and legislators. Through words and actions, the teams at CVS Health, Rite Aid, and Walgreens provide a road map to successfully achieve those objectives on a national scale. But we also fully understand that they are not alone in these efforts.

We salute all those public and private partners that offer their energy, experience, and expertise toward these goals, building the relationships that lead to results.

We look forward to hearing more of your success stories. Working together, there is very little we cannot accomplish.

Jacque Brittain, LPC, is editorial director for LP Magazine. Prior to joining the magazine, he was director of learning design and certification for Learn It Solutions, where he helped coordinate and write the online coursework for the Loss Prevention Foundation’s LPC and LPQ certifications. Earlier in his career, Brittain was vice president of operations for one of the largest executive recruiting firms in the LP industry. He can be reached at JacB@LPportal.com.

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Homeland Security Investigations’ New and Active Role

By Jacque Brittain, LPC, LPM Editorial Director

ORC Special Edition 2022

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asharihasan28 / Shutterstock.com Photo illustration by SPARK Publications

Taking the Battle against ORC to Another Level

O

rganized retail crime (ORC) is a more complex issue than just a theft problem. It’s more than simply a retail concern, with issues branching well beyond the reach of retail and into areas that most may have never imagined. Fortunately, ORC is being addressed in new, innovative, and unexpected ways.

Homeland Security Investigations (HSI) employs a very focused approach to ORC investigations, both domestically and abroad. HSI Deputy Assistant Director Raul Aguilar leads the Countering Transnational Organized Crime (CTOC), Financial and Fraud Division for HSI. This division focuses on financial crimes and fraud, including asset forfeiture, cryptocurrency investigations, bulk cash smuggling, benefit fraud, labor exploitation, COVID fraud, Medicaid fraud, visa fraud, passport fraud, and trade-based money laundering to name a few.

Working with local, state, federal, and international law enforcement partners, prosecutors, and retailers, Aguilar and his team are making tremendous progress in the disruption and dismantlement of ORC networks. Members of the HSI team recently sat down with LP Magazine to discuss their operations, goals, and insights, and how retailers can collaborate with federal partners to combat organized retail crime HSI is the principal investigative component of the US Department of Homeland Security tasked with investigating, disrupting, and dismantling transnational criminal organizations and terrorist networks that threaten or seek to exploit the customs and immigration laws of the United States. HSI investigates these criminal activities: ● Narcotic smuggling, ● Money laundering,

Child exploitation, Transnational gangs, ● Labor exploitation, ● Human trafficking, ● Identity and benefit fraud, ● Financial fraud, ● Illegal technology procurement, ● International weapons smuggling, ● National security threats, ● Terrorism, ● Human rights violators, ● Intellectual property crimes, and ● Organized retail crime.

“We’re continuing to build our network with law enforcement agencies, retailers, and the Organized Retail Crime Associations (ORCAs) across the country to work together and share resources to build these cases,” said Aguilar.

“We utilize a collaborative interagency approach to address transnational organized crime.” ● ●

HSI’s Three Pillars of ORC Unit Chief Thomas Welch oversees the Financial Crimes Unit within CTOC. “We are focused on transnational criminal organizations, and those individuals who use the United States’ financial systems to launder their money. They commit crimes and then take the proceeds back to their home countries,” he explained. “We’ve had several ORC initiatives over time, specifically addressing the proceeds from the sale of stolen merchandise as they are being laundered overseas.

However, over the last six months, we have noticed an increase in ORC activity and our leadership has provided the necessary resources to increase our focus on these cases and take our investigative role to another level.”

In response to the ORC threat, HSI has implemented an initiative they’re calling “The Three Pillars of ORC.”

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Training and Awareness.

At each of HSI’s offices across the US, efforts are being made to integrate current investigations with training focused on typologies and similarities with other types of crime, and other tools to help identify and fight ORC. HSI is also spreading awareness regarding the ORC threat through the launch of a robust public awareness campaign.

Public-Private Partnerships.

There is an ongoing need to establish contacts and obtain leads. While HSI has long‑standing relationships with many financial institutions, it is important to communicate with retailers and associations, such as the Retail Industry Leaders Association (RILA), Coalition of Law Enforcement and Retail (CLEAR), National Retail Federation (NRF), and similar groups.

Prosecution. In coordination with the US Department of Justice, state and local prosecutors, district attorneys’ offices, attorneys general, and local task forces, HSI relies on strong and ongoing communication with prosecutors to build successful criminal investigations and prosecutions. HSI aims to disrupt and dismantle organizations involved in ORC by taking down illicit websites, making arrests, and seizing illicit proceeds and stolen property.

Follow the Money HSI’s Cornerstone Initiative is an outreach program focused on the financial industry but can significantly benefit the retail industry in the fight against ORC by helping banks target the proceeds of retail theft. As a part of the Cornerstone Initiative, HSI distributes publications to financial institutions covering trends and typologies associated with illicit financial

ORC Special Edition 2022

Raul Aguilar

FEATURE Taking the Battle against ORC to Another Level actors, and the money launderers. Every crime has different red flags or typologies; different ways of moving the money. HSI provides training to financial institutions to look for transactions and activities that are outside the normal.”

By working with banks to identify anomalies, HSI can then take additional steps to identify the bad actors and take a deeper look into the criminal organization. This presents the potential to open other doors, including the seizure of criminal assets and dismantlement of the criminal enterprise.

Collaboration in Action Operation King of Thieves began as a large-scale ORC operation initiated in the Houston, Texas, market. ORC booster teams traveled throughout the region stealing all types of products, and each would hit ten to thirty stores each day. Many of the crew members had a long criminal history, including drug abuse and violent behavior. The teams primarily stole drugstore goods such as over-the-counter

HSI is the principal investigative component of the US Department of Homeland Security

tasked with investigating, disrupting, and dismantling transnational criminal organizations and terrorist networks that threaten or seek to exploit the customs and immigration laws of the United States.

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medications, hair restoration products, electric toothbrush heads, whitening strips, shaving razors, and other items that are small, expensive, and in high demand for consumers.

During the course of events, retailers spearheaded by ORC teams at CVS Health, Rite Aid, and Walgreens assessed the size and complexity of the criminal operation impacting their businesses and contacted Homeland Security Investigations to share the information developed to that point.

The investigation targeted two primary organized theft groups—one run by Yasser

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Glenn Highcove / Shutterstock.com

activity, helping them target and stop illegal activity.

Originally passed in 1970, the Bank Secrecy Act (BSA) requires financial institutions to assist the federal government in the detection and prevention of money laundering and other illegal activities. To keep pace with criminals looking for new ways to launder their proceeds, the BSA must evolve to keep pace with both current and emerging threats.

“In the BSA compliance world, there are volumes and volumes of financial transactions, and identifying suspicious activity can be like trying to find a needle in a haystack,” said HSI Program Manager Billy Melton.

“To help thwart illegal activity, HSI has stepped in to assist financial institutions identify typologies and red flags to look for in account activity to detect suspicious transactions.”

Melton added, “Following the money can take us to the heart of the criminal operation. While retailers may see the boosters in stores, the banks are going to see the fences, the higher‑level

Ouwad, a Palestinian refugee from Lebanon involved in ORC activity since his arrival in the US, and the other led by Bilal Awad, Yasser’s brother, who also immediately got involved in ORC schemes after moving to the US. As the investigation continued to unfold, HSI recruited a known booster as an informant who was embedded into the criminal operation. The informant was very well-connected, knowing multiple fences in and around the Houston area and was trusted by the illicit actors.

Through the informant, HSI learned the thieves were given detailed “shopping lists” of

Gil C / Shutterstock.com

As stolen goods were collected, the merchandise was sent to various storage locations where the goods would be stockpiled and later processed for redistribution. The crews working for Ouwad sent everything to various PO boxes, mail rooms, or mail centers under the name “Santino Wholesale,” while the

products to be stolen, including how much the thief would be paid for each item by the fencing operation. Thieves were also given information to maximize the value of the stolen products, such as targeting products with more distant expiration dates.

crews working for Awad sent everything to a storage unit facility under the alias, “Malina Ana Vulpe.”

Theft crews traveled through states across the country stealing large quantities of merchandise with a focus on the Southeast.

There were a large number of theft crews, and each would hit ten to thirty stores per day, depending on

Homeland Security Investigations aims to disrupt and dismantle organizations involved in organized retail crime by taking down illicit websites, making arrests, and seizing illicit proceeds and stolen property.

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FEATURE Taking the Battle against ORC to Another Level the routes taken, states traveled, and how close the stores were to each other.

Once in a target retail store, theft crews worked quickly to steal large quantities of merchandise.

Working the aisles and stealing the most valuable items found on their lists, the theft crews would fill

This case concluded with the arrests of several subjects and the seizure of merchandise, bank accounts, and real property, all totaling approximately $2 million.

Just the Tip of the Iceberg While this investigation provides a prime example of the

While there may not be any simple answers to the complexities

of these criminal enterprises, what has become crystal clear is the importance of working together. Crippling these criminal operations requires the attention of like minds and the cooperation of diverse teams. Public-private partnerships are at the heart of those efforts.

To listen to an LPM podcast where HSI team talks about how they are fighting ORC, visit bit.ly/HSI-podcast or scan the QR code.

shopping carts with stolen goods and blatantly push them out of the store to a waiting vehicle.

During the case, investigators were able to determine that approximately 1,200 shipments of stolen merchandise from all across the country were received by the two brothers, amounting to more than $6 million in loss to the retail companies. Further, once the products were “cleaned” and readied for shipment, the investigation revealed that many of the stolen goods were being shipped to a known diverter, a wholesale company in New England, that would resell the stolen merchandise, often back to retail companies. In total, 76 pallets of stolen merchandise were recovered from the diverter with an estimated value of $7.6 million.

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power of these public-private partnerships, there is more to the story that highlights the potential reach of these criminal networks and their impact on our communities.

Organized retail crime is well‑known as a “gateway” crime, often leading to other criminal activity including violent crimes, guns and other weapons, drug trafficking, human trafficking, and additional serious and far‑reaching issues. Like many of the criminal networks dealt with today, this story doesn’t end with these two brothers and their crews. HSI continued expanding the investigation, leading to the identification and arrest of one of the primary ORC kingpins in the country.

Mohamed Mokbel is a naturalized US citizen originally from Egypt. Long known for his

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involvement in fencing operations, he has reportedly been involved in ORC since his arrival in the US in the 1990s. Mokbel is believed to be responsible for a criminal network moving tens of millions of dollars in stolen products throughout the US. As part of this intricate and profitable illicit operation, he also owned and operated 4M Pharmaceuticals, the parent company of more than a dozen pharmacies operating throughout the country.

Mokbel, a primary actor in the Operation King of Thieves fencing conspiracy, slowly relinquished control of these interests to other fences so that he could focus on another illegal business—healthcare fraud.

In partnership with the Food and Drug Administration Office of Criminal Investigations, Department of Health and Human Services Office of the Inspector General, the Federal continued on page 22

FEATURE

Continued from page 20

Bureau of Investigation, and various state agencies, HSI targeted and dismantled Mokbel’s transnational criminal operation.

The investigation revealed that Mokbel was involved in a large‑scale healthcare fraud operation, defrauding insurance companies and the government out of more than $134 million.

Search warrants were executed

investigation, the actors involved, the types of crimes committed, the individual circumstances surrounding the investigation, and the reach of the criminal activity.

While there may not be any simple answers to the complexities of these criminal enterprises, what has become crystal clear is the importance of working together. Crippling these criminal operations requires the attention of like minds and the

Organized retail crime

is well-known as a “gateway” crime, often leading to other criminal activity including violent crimes, guns and other weapons, drug trafficking, human trafficking, and additional serious and far-reaching issues. and more than $7 million seized from his bank accounts.

The reach of Mokbel’s criminal organization did not end at the US border. As part of his healthcare fraud scheme, Mokbel moved part of his operations to his home country of Egypt, including a call center used to defraud victims in the United States. Not only was Mokbel in a network of individuals engaged in illegal activity throughout the US, but these illegal operations, contacts, and proceeds supported criminal operations overseas.

Innovation through Partnerships Organized retail crime is a more complicated problem than often perceived by the general public.

However, these networks can also take directions that branch beyond what even seasoned professionals might expect. Every case is different and must be approached based on the merits of the

ORC Special Edition 2022

cooperation of diverse teams.

Public-private partnerships are at the heart of those efforts.

“These issues can go far beyond theft,” said Deputy Assistant Director Aguilar. “At HSI, we are looking at transnational organized crime groups on a daily basis. To combat these criminal networks, HSI’s relationships with interagency teams, our public partners, and the private sector are critical. I cannot stress enough the importance of us all working together.”

“This is a significant problem and a major economic and national security threat to the United States,” advised Robert Skidmore, case agent for Operation King of Thieves.

“We’re witnessing a vast amount of criminal activity that is tied to organized retail crime. I can truly say that this investigation never would have come together the way it did without the help and guidance of our retail partners. As the case agent, they helped me

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ShutterstockProfessional / Shutterstock.com

Taking the Battle against ORC to Another Level

understand how organized theft groups operated, best practices from previous investigations, and they provided a large amount of support that enabled HSI to dismantle this transnational criminal organization. It was a true partnership. Without that, it wouldn’t have worked.”

“Communication remains the key,” explained Aguilar. “This is a great opportunity for us to come in direct contact with the people affected by crime, sharing ideas, as well as information. Paying attention to the innovation piece is critical as we move forward, and we welcome your participation and partnership. As criminals continue to evolve, we need to be able to evolve in law enforcement as well.”

When dealing with ORC, every partnership is an opportunity.

Learning from one another, building relationships that matter, and finding ways to work together should be the easiest steps we take. Make it happen, and make it count.

Jacque Brittain, LPC, is editorial director for LP Magazine. Prior to joining the magazine, he was director of learning design and certification for Learn It Solutions, where he helped coordinate and write the online coursework for the Loss Prevention Foundation’s LPC and LPQ certifications. Earlier in his career, Brittain was vice president of operations for one of the largest executive recruiting firms in the LP industry. He can be reached at JacB@LPportal.com.

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ORC Special Edition 2022

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Applying Effective Interviewing Skills to ORC Investigations

T

he fight against organized retail crime (ORC) is not unfamiliar to the retail industry, but it is more strategic and collaborative than ever before. This elevated focus is necessary to stay ahead of the evolving growth and aggression of these enterprises. There is also a developing sophistication in the type and method of crimes, as opposed to the traditional product theft, although this problem is still very real. Fraud scams impacting e-commerce operations, phishing attempts, credit or gift card manipulation, and supply chain theft are just some of the few areas of concern for loss prevention professionals.

Combating these issues is both preventable and reactionary with multiple tools available to retailers and law enforcement alike. Video equipment supporting predictive data analytics and detailed reporting allows investigators to identify and compile more thorough case files than ever before. Traditional surveillance methods and the tracking of high-theft products continue to be vital, on-the-ground resources. Partnerships with online retailers and resellers are also instrumental, as the sale of stolen products is no longer limited by geographic region, impacting multiple jurisdictions.

The collaborative relationship between law enforcement and retailers is another vital component to any successful investigation.

These relationships have grown stronger with regional ORCA groups, supported by state retail associations and their respective law enforcement partners.

Software companies have also helped facilitate these relationships through data-sharing and providing access to information on collaborative platforms.

In addition to these advanced resources and tangible solutions, there is a foundational and often overlooked tool in the battle against ORC—the power of communication. Understanding

the elements to relationship building, development of rapport, and managing resistance are all important aspects of an investigative interview. Interviewing skills are not siloed to application in the interview room, as these communication skills apply throughout the entire investigative process. In a review of the entire context of a collaborative investigation, understanding the power of information, we can identify the areas in which communication skills can facilitate a safe, and productive case development.

The Approach One of the most concerning aspects for retailers when addressing ORC is the safety of their employees and customers in the apprehension process.

Although many organizations have moved away from physical encounters in a “hands-off” approach, there still exists an element of confrontation in the approach of a person who has possession of stolen goods. If a company has permitted their team to make an apprehension, safety is paramount, and communication skills relative to de-escalation are impactful in these situations.

The initial encounter with the subject, with specific company guidelines being followed, is an integral moment in the likelihood of success for any subsequent interview. This approach must also be made in a way to ensure safety for everyone involved. The emotional state of the investigator or loss prevention professional is an important key to this stage in the process as they most likely have been surveilling the subject for some time and are anticipating this confrontation. Investigators must be able to maintain their composure, be tactful, and show respect and empathy in the approach.

There are a variety of ways to specifically approach the person of interest and investigators should follow their company

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One of the most concerning aspects for retailers when addressing ORC is the safety of their employees and customers in the apprehension process.

Although many organizations have moved away from physical encounters in a “hands-off” approach, there still exists an element of confrontation in the approach of a person who has possession of stolen goods. policies to ensure consistency and compliance. However, there are elements to these approaches that are universal in their application.

The interviewer should promote autonomy for the subject, while being transparent and adaptable in the process.

Projecting Autonomy. Providing the subject with a feeling of autonomy allows them to maintain control over their decision-making process, which may encourage cooperation. Thanking the subject for coming back to the office peacefully acknowledges that they had made the positive choice to do so. Investigators should also thank the subject for allowing them time to get paperwork done and providing their information.

These moments of gratitude are respectful and allow the subject to understand that they have the ability to make choices. Their freedom to choose encourages a cooperative mindset rather than dictating their every move.

Showing Transparency.

Transparency from the investigator can provide some guidance and reduce uncertainty for the subject.

Informing the interviewee of the process they are going through and explaining the purpose of the questioning shows respect and demonstrates the investigators, willingness to be forthcoming.

The use of deception—lying about evidence or the potential outcomes—may only increase the resistance and distrust from the subject. Withholding evidence

ORC Special Edition 2022

FEATURE ORC Investigations and confidential information is still important, but investigators can provide some comfort by discussing the process with the subject throughout the conversation.

Being Adaptable. Adaptability is another important skillset for the interviewer, especially in a potential confrontational situation. The responsibility to maintain emotional balance and control the direction of the conversation fall onto the investigator. When approached, a subject may be verbally aggressive, dismissive, or uncertain. All these maladaptive behaviors may inhibit a positive interaction unless the investigator can redirect the dialogue. Investigators should maintain control of the situation but can do so in a supportive and conversational manner. If the subject claims “I can’t get arrested right now,” a negative (but common) response may be “Well, then you shouldn’t have stolen those items.” Instead, investigators should understand the uncertainty from the subject and adapt supportively, “I know this is difficult. I’ll walk you through the process together.”

Interviews, even if in a time-restricted and unique environment, should be focused on obtaining more information in an ethical and non-confrontational manner. The investigator should also be adaptable, recognizing resistance to one topic should result in transitioning to a different area of interest.

The Interview The conversation with a person of interest is the most obvious fit to applying interviewing skills, however investigators should be aware of the diversity of these encounters and understand their true purpose.

The interviewee in these cases can range from the person with stolen goods caught in a retail store to a reseller or fencing operation.

The environment in which ORC interviews are conducted is also varied as some are hosted in a loss

prevention office, or field interviews at a place of business, while others may occur in a patrol car or traditional custodial environment.

All these locations have their unique obstacles, but still have underlying elements consistent with successful conversations.

What’s the Goal? One of the common misses made by investigators during an interview is being solely focused on obtaining a confession, rather than a more productive goal of obtaining actionable intelligence. Getting a subject to acknowledge they stole product (while in possession of it) may be important but is a narrowly sighted approach when the goal should be to obtain additional information. Successful interviews should seek to obtain information unknown to the investigator, adding to the list of evidence compiled in the case, rather than just confirming it. A focus on understanding the extent of the theft is important to determining the total loss caused by the subject and their organization.

There are additional areas that interviewers should aim to explore outside of the quantity of theft activity. Distribution channels are an area of focus, including the method of resale and potential implications of other involved parties. Names, locations, usernames, and location of previously stolen product all produce data points essential to compiling a thorough investigation.

Interviewers may also want to determine the organizational structure, the recruitment process for new members of the group, and how they profit individually in the process. Geographic coverage, transportation details, and communication logistics are also a wealth of data. Obtaining rental car information, vehicle details, and the range of activity will help to add more information to data-sharing platforms while also understanding what jurisdictions may have an interest in the case.

Interviews, even if in a time‑restricted and unique environment, should be focused on obtaining more information in

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an ethical and non-confrontational manner. The investigator should also be adaptable, recognizing resistance to one topic should result in transitioning to a different area of interest. If a subject is resistant to sharing names or information on their counterparts, the interviewer may transition to exploring details as to their method of transportation. Any details that can be utilized to develop a stronger foundation for the case will be helpful for the investigator but also have a compounding effect with the increased use of data-sharing platforms and multi-jurisdictional investigations. Collecting puzzle pieces will assemble a clearer picture, and many of these details are readily available, we just need to ask the right questions.

Establishing Credibility. If a person of interest is apprehended after swiping dozens of bottles of fragrances on their way out of a retailer, they assume that the investigator only knows about their current crime. One of the obstacles when catching someone “red‑handed” is the perception that the investigation is minimal, and that ensuing conversation is strictly based off the recent event. If there is an extensive investigation, or information available through other information-sharing platforms, investigators should always be prepared for the conversation.

Consistent reviews of new alerts, attendance at ORCA meetings, and maintaining updated case files assist in educating the investigator and assisting in their preparation for an inevitable interview opportunity.

Even if evidence exists within a comprehensive case file, it is recommended that interviewers withhold this evidence from the subject. Showing evidence to the interviewee presents several issues including contamination of any confession and the potential revealing of confidential information or investigative resources. This tactic may also result in obtaining less information, as the subject may assume the only information the investigator has is the evidence in which they are being shown.

For example, showing the empty packages of the fragrances that were just pilfered may yield an admission to the theft, but the subject may omit acknowledgment of all the video games they took earlier.

Either way, if evidence exists or there is minimal information available, interviewers should not be deceitful in their approach, but instead speak credibly to their general investigative process. In the development of rapport, interviews should also be transparent about their potential investigative resources as well as their knowledge of the types of theft activity that exists.

Without personally directing any accusation to the subject, an interviewer may list a variety of ways they are aware that people take advantage of their company: “…sometimes customers conceal

product on their person or work in collusion with employees, other times they come into our stores in groups to distract our team. We have seen our product then resold online, at local swap meets, or even in other discounted stores….” This list should be relative to the type of activities the person of interest is involved in, which provides credibility to the investigator by demonstrating their knowledge and experience in investigating these specific issues.

The investigator can then similarly list a variety of tools at their disposal routinely used in investigations. Deception should not be used here, but rather a high-level overview of resources used in ORC investigations.

If an investigator can briefly describe how they rely on their camera systems, collaboration with other retailers, inventory

audits, or screening of online resale platforms, they will further establish credibility in their experience. This overview should not be accusatory or personalized to the subject, but rather provide transparent insight to the process.

Showing Empathy. Showing understanding to the difficulty of the current situation facing the person being questioned is a vital element in the interview process. Although interviewers should show compassion and empathy during the conversation, they should not justify or remove the perception of consequences as this may result in obtaining unreliable statements. Empathy in these conversations applies beyond the initial approach and acknowledgment of the subject’s state of mind and potential certainties. This is also useful in the understanding of what

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FEATURE ORC Investigations difficulties put this person in this situation in the first place.

Empathy as it relates to the reasoning behind a person committing the crime in the first place can be demonstrated through the sharing of other relatable experiences. Interviewers should not justify a person’s actions but may be able to show understanding to their financial situation or other pressures that have resulted in their decision to be involved in this activity. Throughout the conversation, the subject may allude to their decision-making process, citing the financial benefits of their involvement or the impulsive decision. Interviewers, even if they disagree with the ethical decision made by the subject, should allow them the platform to share their story without judgment. This display of empathy may provide

The entire investigation may be comprised of surveillance notes, investigative reports, and copies of videos, but without law enforcement support it may be a fruitless endeavor. an opportunity for the subject to disclose information without feeling further shamed for their actions.

Questions and Answers. A productive interview can be completely disrupted by ineffective questioning techniques and the lack of active listening by the investigator. Generally speaking, direct and leading questions can create emotional resistance, result in minimal information, and also are catalysts to obtaining unreliable details. With the above “goals of the interview” in mind, investigators should strategize categories of questions to elicit as much information as possible. These questions should be delivered in a funnel approach beginning with open-ended dialogue and eventually narrowing down to specific details. Open‑ended questions may elicit a wider scope of information, whereas closed-ended questions may

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result in more specific details. It is a combination of these question styles in the appropriate order that proves most effective.

The transition to a more open‑ended questioning is a simple concept, but hard for investigators to adapt without intention and repetitive feedback.

Asking a subject “Where do you sell the product?” may result in immediate resistance, as the subject will not want to disclose that information or may simply omit details. Instead, an interviewer may ask “Could you tell me about what happens with the product after you leave the store?” This allows the subject a bit more latitude to tell their story and also potentially incorporates additional unknown details to the interviewer.

In the first example, the subject may disclose a name of a reseller, simply stating “I sell it at John’s Corner Store.” The second, open‑ended question, requires more context and may elicit the following: “We make a call when we get in the car to let the guys know we are good, and then we head to John’s Corner Store to get rid of it.” Now, using more exploratory questions the interviewer can expand on these details, such as “…could you tell me more about the call you make?” Following the funnel approach, getting more finite details, the interview may ask echo questions “…what do you mean, ‘to get rid of it’” or closed-ended questions “…who do you call?”

The sequencing of questioning allows for the investigator to become an active listener, providing a wider scope of information for the subject to provide. Follow-up questions focused on expanding more details will then result in the specific information initially desired. The use of this approach has a greater likelihood to extract more information and actionable intelligence.

Case Presentation The entire investigation may be comprised of surveillance

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notes, investigative reports, and copies of videos, but without law enforcement support it may be a fruitless endeavor. Communication skills, as utilized when approaching a subject or within the interview, can also be applied when building relationships with law enforcement professionals. Relationships are built from reputations and trust, requiring these collaborative partnerships to be built well before they may be needed.

Just as in any interview preparation, investigators should anticipate objections from their potential law enforcement or prosecutor partners. Objections may include a lack of evidence, jurisdictional authority, or cost or time burden on a department that does not have the ability to spare it. Anticipating these objections proactively allows an investigator to better prepare a case with enough supporting evidence, identifying the appropriate jurisdiction, and offering support from their own network of resources.

Keys to combating ORC are founded in the importance of collaboration and communication.

Without these elements there is a lack of data available, minimal actional intelligence, and porous investigations. Effective communication skills, a strength for interviewers, should be applied in all circumstances, ranging from collaborative discussion meetings to approaching a person of interest with stolen goods. Actionable intelligence keeps us in step with the evolving nature of organized crime and can be the catalyst to closing a case that impacts much more than recovering stolen goods.

David Thompson , CFI is the president and partner of Wicklander-Zulawski & Associates, providing investigative interview and interrogation training to a global audience. He has served as a subject-matter expert in developing curriculum and providing consultation to investigators, attorneys, and the academic community. He can be reached at dthompson@w-z.com.

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Prioritizing People’s Safety in the Tidal Wave of ORC

B

eyond debate over definitions and dollars lost is the lived experience of customers and store workers being victimized in violent store takeovers and enduring unprecedented intimidation by professional criminals targeting retail establishments. Indeed, high-level dissection over whether a particular loss would best be categorized as organized retail crime (ORC), shoplifting, or robbery—and what precise amount it all adds up to—both misses the point and the primary concern of retailers, which is that the well-being and safety and shoppers and associates are too often put at risk.

Amid the surge in coordinated smash-and-grab attacks on retailers this winter, Eric Orozco, the owner of Heart of Gold jewelry store inside a San Jose, California, shopping center, shuttered his shop for a week out of fear that his store could be targeted. The day after he reopened his doors, thieves hit.

At 3:30 in the afternoon on a Monday in January, between eight to ten people armed with sledgehammers stormed the shopping center. “These individuals actually forced their way into the store,” police officer Steve Aponte told a local NBC affiliate. “And by saying ‘takeover robbery,’ they demanded everybody get on the ground.

They forced people who were present, including staff members, to do their will. And in doing so, they were able to take over, break the glass, and take away the stuff that they wanted to take.”

Three vendors were hit, and approximately $100,000 worth of goods was stolen, but the real damage was in human terms, Orozco told Fox News. “My dad was injured and... that really broke my heart to see. I mean, had the pressure been a little bit harder on his head, he could have died.

So, these guys came in and threatened lives.”

“They heard the men say, ‘Close the doors, get everything inside!’

And that’s when we started screaming,” said Rocio Gomez of Joyeria Guerrero, another jewelry vendor targeted in the attack.

Stores in large cities have endured the lion’s share of the trouble lately, including the coordinated attack on a San Francisco-area Nordstrom in November that involved more than eighty thieves, and areas not accustomed to such violent crime are suffering too. Beverley Hills has seen repeat victimizations; stores in tony beach towns like Carmel-by-the-Sea have been hit; about thirty thieves ransacked a Best Buy in Burnsville, Minnesota; and on and on.

Beyond debate over definitions and dollars lost is the lived experience of customers and store workers being victimized in violent store takeovers and enduring unprecedented intimidation by professional criminals targeting retail establishments.

As it’s become fashionable to accuse big retail of being imprecise on the extent of ORC losses, it’s the human stories of frontline workers that get lost, but which are driving retailers’

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response to the crime surge and the industry’s demand for change. For them, protecting products is important, but people are the priority.

“You can see [the] pressure in our financials and more importantly, frankly, you can see that pressure on our associates,” said Best Buy CEO Corrie Barry in a quarterly conference call.

“This is traumatizing for our associates, and it is unacceptable.

We are doing everything we can to try to create as safe as possible environments.”

Efforts to cast doubt on whether the ORC problem has truly worsened ignores what those on the frontline say they’re witnessing and experiencing.

Brian Neimeyer, head of retail at Allied Universal, said robberies and flash mob events aren’t new, but that ORC has reached “a scale, boldness, and aggressiveness that was not generally evident in the preCOVID era.” Despite pandemic restrictions reducing shopping mall traffic in 2021, for example, criminal incidents in them increased over the average level for recent years, he told LP Magazine.

Additive to the problem that professional thieves present are well coordinated attacks that aren’t entirely professional, highlighted in the Walnut Creek Nordstrom attack in which twenty vehicles were used to deliver the stream of offenders and to cart away merchandise. “It wasn’t professional, and by that, I mean the main players in this group enlisted a lot of juveniles,” explained Jeff Blunk, MCJ, senior manager of investigations for Nordstrom, in an ORCAs in Action virtual event in January. “It wasn’t a professional smash-and-grab that we would see in the early morning or late-night hours or one with a handful of people.

They gathered as many people as they could, caused as much disruption as they could, and

ORC Special Edition 2022

Brian Neimeyer

Jeff Blunk

FEATURE Prioritizing People’s Safety

Ben Dugan

Eric Hawkins

got as much product as they could,” he said, noting that the investigation later revealed that participants earned a flat fee per item for their effort.

CVS Health is among the retailers reporting safety challenges associated with growth in ORC. External thefts involving violence have doubled since the beginning of the COVID-19 pandemic, said Ben Dugan, director of ORC and corporate investigations at CVS Health, during an industry webinar in November 2021 titled “Targets, Trends, and Threats in ORC.” Auror, a retail crime intelligence platform used by retailers, has seen serious incidents such as robberies and assaults double in 2021, according to Phil Thomson, the company’s co-CEO. Repeat offenders and ORC groups accounted for a substantial proportion of the violence, he said, noting that these habitual offenders are five times more likely to be violent or aggressive toward retail team members and customers.

Retail work is dangerous relative to other jobs for no other reason than external violence.

In a December research note, the Centers for Disease Control (CDC) reported that external attacks are the leading cause of death among convenience store workers and its latest data from 2019 showed that these retail workers had a fourteen times higher rate of deaths due to work‑related violence than in private industry overall—6.8 homicides per 100,000 workers vs. 0.48 per 100,000 workers.

Changes in retail operations have also increased the risk of harm from criminal activity.

Stores that may have previously closed for the night might now have 100 employees filling orders 24/7, transforming the threat of an overnight burglary into a significant safety risk for workers.

ORC Special Edition 2022

Retailers’ concern is widespread, according to the 2021 Retail Security Survey by the National Retail Federation (NRF). In it, retailers reported that

As it’s become fashionable to accuse big retail of being imprecise on the extent of ORC losses, it’s the human stories of frontline workers that get lost, but which are driving retailers’ response to the crime surge and the industry’s demand for change. For them, protecting products is important, but people are the priority. gangs are more aggressive and violent than in years past, with 65 percent reporting an increase in violence among ORC gangs and 37 percent believing they were “much more aggressive” than in the past. For comparison, in 2019, only 57 percent said ORC gangs were more aggressive with 31 percent saying they were much more aggressive.

Despite some high-profile politicians and media personalities trying to cast doubt on the industry’s perspective, proof of the safety risks that

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customers and shoppers face from retail theft is littered across YouTube, such as the video from a Nordstrom in Southern California where thieves assaulted staff with bear spray.

There are also videos of thieves filling bags with merchandise with impunity—glaring intimidatingly at store workers as they fill up.

“We’re all concerned a bit by how much bolder the bad guy is,” Mark Stinde, MBA, LPC, former vice president of asset protection at Kroger told LP Magazine in 2021, a point echoed by Dan Reynolds at 3SI Security Systems.

“They walk out with an attitude of ‘just try to stop me.’ It’s amazing how blatant violent criminals have become,” Reynolds said.

While such threatening incidents are unlikely to ever show up in a public database as an act of violence, they certainly are—and the impact they have on the physiological well-being of associates is substantial and routinely reflected in postings on retail workers’ message boards.

It’s impacting the ability of retail stores to manage today’s labor market churn, according to Eric Hawkins, president of GKG Search & Consulting, a talent acquisition and retention firm. He told LP Magazine that young workers more than ever want to feel that they work in a “cool” place, and “part of being proud of the place you work is likely feeling safe and secure when you’re at work.”

“Outside of the financial losses, the aspect we are most concerned about is the confidence of our team, whether or not they’re safe at work, and what our stores look and feel like,” said Nordstrom’s Jeff Blunk.

When major attacks happen, “it’s more than a security incident. It’s an overall organizational incident.”

Customer Concerns Unease among customers has grown as well, suggests continued on page 34

ORC

Retailer Investments for Safer Shopping

LPM found a range of responses after consulting retailers on their activities to make stores safer places to shop and work and for preventing injuries from ORC. Steps that organizations are taking are listed below.

1.

Opening lines of communication with stores and employees to share the steps being performed to reduce the threat of violent attacks on stores, such as describing asset protection partnerships with law enforcement to disrupt ORC.

2.

In the wake of investigations leading to arrests, sharing information about the success to operational leadership so they can get that information down to stores and their employees.

3.

Implementing and promoting programs that provide counseling and support to employees in the wake of an incident.

4.

Clarifying when and what information is useful for a security operations center to include in an alert to the field and when information is not actionable and should not be reported to stores.

5.

10.

Working on several fronts simultaneously, such as improving interior company programs at the same time as working with the retail community and law enforcement.

Hiring experienced retired law enforcement officers to enhance the ability of investigation teams to more effectively liaison with police and city leaders.

6.

Increasing capacity to conduct real-time monitoring of social media channels to identify potential indicators of a store attack.

7.

Tracking ORC activity and utilizing geographic information systems to predict gang movements to preposition resources and/or send alerts.

8.

Using sensors and tagging to collect real-time loss data to know where thieves are most active to ensure adequate staffing and send alerts if necessary.

9.

Investing in platforms that make it easier and faster for stores to report crimes and to exchange information with stores about risks and known offenders.

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11.

Enhancing community outreach and leveraging community resources where applicable, recognizing that safe communities and safe stores go hand in hand and that stores can be part of community violence reduction solutions.

12.

Promoting and supporting industry efforts that enable retailers to work together, to share threat information, aggregate data, conduct investigations, and jointly identify effective solutions.

13.

Educating law enforcement on the differences in the threat between shoplifting and ORC, the real safety risks to the public from the violence associated with it, and the other social harms that ORC contributes to society.

ORC Special Edition 2022

FEATURE Prioritizing People’s Safety Continued from page 32

Steve Walker

Steve Fahey

a NewsNation poll conducted in December 2021. In it, 48 percent said they felt “less safe” shopping in person in the current environment. Importantly, even among individuals who said they had not heard about holiday flash-rob events, 34.4 percent reported feeling less safe shopping in person this past holiday.

During the mass theft events this winter, gangs of thieves did not specifically target shoppers, but they weren’t allowed to get in their way, either. Injuries to shoppers occurred, often from being trampled as people ran for safety.

Not surprisingly, the public exhibits stanch support for stricter laws and tougher sentencing guidelines around store theft, with 62.7 percent expressing the view that they are currently “too soft” compared to just 9 percent who said they are “too strong,” according to the NewsNation poll.

The public also expressed the view that theft gangs should be treated as violent offenders, with 79.1 percent believing that suspects in smash-and‑grab retail thefts should not be released without bail while awaiting trial.

When Chicago Mayor Lori Lightfoot suggested that retailers themselves were to blame for not doing more to make safety a priority, she was mostly met with derision. The scale of the attacks and their randomness were a plain rebuttable and experts pointed to the hundreds of millions that retailers spend annually on security.

Indeed, store safety had grown as a priority before 2021 holiday smash-and-grabs shined a fresh light on ORC. In the 2021 NRF survey, 82 percent of retailers reported that store violence had grown as a priority for their organization in the last five years.

“LP professionals and retailers have brought attention to the

ORC Special Edition 2022

When a retailer is targeted by professional ORC gangs or attacked in a rush of eighty offenders, it is, naturally, a store problem. But with hundreds of shoppers put in harm’s way during these events, it’s more critically a community matter—impacting whether residents feel safe where they live, work, and spend their leisure time. continuing increase in ORC, cybercrimes, and shootings and other violent incidents in malls and stores,” the survey report noted. “They continue to invest in multiple resources.

Half of respondents said their organization was adding technology resources and capital.

And, compared with last year, there is more of a focus on hiring additional personnel.”

According to the CDC, following the tenets of Crime Prevention through Environmental Design (CPTED) remains a primary tool for reducing safety risks. Retail establishments that implement CPTED programs experience a 61 percent decrease in non-fatal injuries from external violence, according to its December 2021 research brief.

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Because ORC has associated safety risks, all measures to curb ORC are by their nature safety investments, but some more directly relate to the goal of violence prevention than others—and a sampling of those are in the accompanying sidebar on page 33. Because robbery and frontal attacks on stores are largely impossible to prevent, educating employees how to stay safe when attacks happen is foundational to retailers’ safety strategy.

“We want to make sure our team members come out of the robbery safe, everything else can be replaced,” said Steve Walker, LPC, CPht, lead director of major crimes for Walgreens AP solutions, during the ORCAs in Action event. The company utilizes 185 professionals in the field that interact with stores and teach and train every day on de‑escalation and how to navigate a robbery and avoid engagement, so they aren’t put at risk. “We have training that comes up twice every year,” he said.

Training and support are the focus of Nordstrom’s safety approach. “We’ve increased the frequency of [training], and role‑playing critical incidents I think has helped,” said Steve Fahey, Nordstrom’s vice president of asset protection.

“We also have an emergency readiness app that takes you through critical situations and how to respond.”

But even with all the continued investment, there are limitations to what retailers can do. People shouldn’t have to wonder if loved ones are going to be safe at work because they work in a retail store, said Jeff Blunk, “Yet, that’s kind of where people are at. People are questioning whether or not they’re safe at work.”

Retailers are doing what they can—fortifying buildings, improving staffing, enhancing

Gorodenkoff / Shutterstock.com

Changes in retail operations have also increased the risk of harm from criminal activity. Stores that may have previously closed for the night might now have 100 employees filling orders 24/7, transforming the threat of an overnight burglary into a significant safety risk for workers. skill sets and resources—but the events of the past holiday season still happened, said Blunk. “We can only do so much. We need the support.”

Shifting Political Winds?

When a retailer is targeted by professional ORC gangs or attacked in a rush of eighty offenders, it is, naturally, a store problem. But with hundreds of shoppers put in harm’s way during

these events, it’s more critically a community matter—impacting whether residents feel safe where they live, work, and spend their leisure time.

That the current state of retail crime is untenable from a public safety perspective is starting to be reflected in the nation’s political debates, where the issue of crime has started to move from election periphery to campaign centerpiece.

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In New York City, Eric Adams rode an anti-crime message to the mayor’s office, and it is currently giving shape to the race in Los Angeles, where billionaire Rick Caruso believes a tough-on-crime position is his best path to office.

Rather than promoting his real estate success, his campaign is promoting his tenure as president of the LA Police Commission, and Caruso launched his campaign by telling a reporter that voters

ORC Special Edition 2022

FEATURE Prioritizing People’s Safety

Scan and listen to the podcast or watch the video of Steve Fahey and Jeff Blunk of Nordstrom with Steve Walker from Walgreens discuss store safety.

are “scared” and “want the ability for their kids to walk to school and play in a park and not worry about homeless encampments around them and not worry about crime rising.’’

The issue’s political weight is reflected at the state level as well, where California Gov. Gavin Newsome should be enjoying a honeymoon after beating a recall effort and announcing a historic budget surplus for 2022 but is instead faced with polls that show 54 percent of residents believe the state is headed in the wrong direction because of dissatisfaction with rising crime and concern for public safety.

In San Francisco, after the string of violent attacks on retail stores during the 2021 holiday shopping season pulled her off the sidelines, Mayor London Breed announced her intention to end the “reign of terror” with more aggressive law enforcement, tougher policies, and less tolerance for “all the bullshit that has destroyed our city.”

Breed said in a television interview that progress starts by recognizing “what families are going through, what merchants are going through,” and expressed her view that changes in the city have reached a point where: “Something’s gotta give; something has to change. It’s not about a stance of being tough on crime or soft on crime—I couldn’t care less,” she said. “I don’t want anyone to be hurt.”

Politicians are starting to react to the frustration of the public who want the ability to shop in safety and who may increasingly recognize a link between lax enforcement of “minor crimes” like shoplifting and very real safety concerns.

Despite his focus on police and prison reform, Gov. Newsome responded to the violence during the holiday shopping season by saying, “the level of organized

ORC Special Edition 2022

Politicians are starting to react to the frustration of the public who want the ability to shop in safety and who may increasingly recognize a link between lax enforcement of “minor crimes” like shoplifting and very real safety concerns. retail theft we are seeing is simply unacceptable.”

Nationwide, crime promises to be a central issue of the 2022 election, and strategists suggest that even strong advocates for police and criminal justice reform will need careful messaging to explain how safer communities can be achieved through alternative means.

San Francisco’s mayor has been advancing a message that seems focused on striking a balance between supporting a strong social safety net while still holding people accountable for bad behavior—a fine line that more politicians will likely need to walk in upcoming elections. “The challenge we’re running into is the behavior that leads to violence… and we have to deal with those things and not pretend that some sort of social service program is actually going to get rid of it,” she said. “Once these lines are crossed there has to be a level of accountability.”

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Although some data points might suggest otherwise, voter perception generally is that public places are getting less safe—and they want to see laws enacted that aim to change that. A Berkeley IGS poll of Los Angeles voters, for example, found that 71 percent of voters say crime has increased in their area and there is wide support for rolling back Proposition 47, which voters passed in 2014 and reduced penalties for some property crime and raised felony thresholds for store theft. Support for amending Proposition 47 includes 61 percent of Latino voters, 71 percent of white moderates, and 89 percent of white conservatives, according to the poll.

A feedback loop between politicians and voters might drive public support even higher. “The public needs to know that there is a direct correlation between rampant serial theft and voters being duped by proponents of Proposition 47,” according to state assembly member Jim Cooper (D - Elk Grove), who sponsored a failed measure to overturn parts of Proposition 47 in 2020. “We are watching an epidemic of theft caused by Proposition 47 that over promised and under delivered, which has quite literally, turned California into the Wild Wild West.”

It’s a message that is gaining momentum and increasingly amplified by political candidates, giving rise to the hope of many that the national appetite is shifting away from laws that aim to de-populate prisons to laws that will also restore sanity and safety to a simple trip to the store.

Garett Seivold is senior writer for LP Magazine. A trained journalist, he has spent the majority of his career writing about security, risk management, supply chain, and loss prevention topics. He can be reached at GarettS@LPportal.com.

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The Dark Truth behind ORC Criminal Networks

By Courtney Wolfe, LPM Digital Managing Editor

O Kevin Metcalf

rganized retail crime (ORC) has been top-of-mind for all loss prevention professionals in recent years due to its financial impact. The FBI estimates that ORC crimes cost the US approximately $30 billion each year, with a large percentage of that money funding other, darker criminal activities.

“When you’re looking at organized retail crime, you’re looking at drug networks, you’re looking at cartels, and all of this stuff is mixed together,” said Kevin Metcalf, founder of the National Child Protection Task Force. “It’s not just one clean crime.”

ORC Special Edition 2022

After starting a career in law enforcement working counterterrorism, Metcalf went through law school and started working as a prosecutor specializing in electronic evidence. He then began traveling around the country, teaching others how to approach cases in the same innovative way.

“Everywhere I would teach, I would say, ‘Hey, let me know if you need any help,’” Metcalf said. “And that started getting me involved in a tremendous variety of cases—terrorism, domestic terrorism, property crimes, homicides, all sorts of things, including retail.”

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A few years ago, he took on a case that changed the course of his life. Metcalf helped in the recovery of a few teenagers who were groomed and taken by online sexual predators, and soon he was being asked to speak at national and international conferences. That’s where he met Kevin Branzetti, and they formed the National Child Protection Task Force—a small but mighty nonprofit made up of people from a variety of backgrounds, including law enforcement, the military, and loss prevention, dedicated to catching and prosecuting human traffickers.

ChameleonsEye / Shutterstock.com

Human Trafficking and ORC

But what does this have to do with ORC? A lot, it turns out.

ORC’s Link to Human Trafficking

Shoplifting can be a sort of gateway for at-risk individuals. After being caught shoplifting, some are befriended by traffickers and then manipulated into prostitution.

In addition to prostitution, human traffickers may also force their victims to shoplift for them or purchase gift cards. These gift cards can then be used to fuel trafficking operations thanks to their anonymity and lack of a paper trail. They could be leveraged as a direct means of payment between a victim and a John in sex work, or they could be used to launder large sums of money associated with trafficking. “Really, the sky is the limit, especially since many gift cards can also be sold on third-party resale sites so the sellers can walk away with cash,” Metcalf explained.

According to the Department of Homeland Security, the average price of a sex ad is $60, and 1.04 million sex ads currently utilize retail gift cards as forms of payment—that’s $60 million in potential laundered gift card expenditures.

And even when the victims aren’t the ones doing the shoplifting, the profit from that crime can be used to fuel human trafficking.

“Historically, private sector companies have not paid much attention to human trafficking and exploitation,” Metcalf said. “But as more and more businesses shift into digital channels, offering more unique ways of delivering services and facilitating payments for those services, theft and fraud are not the only criminal activities that can affect them.”

What Can Be Done?

While this is all disturbing to hear, the good news is that loss prevention professionals can be a big piece of the puzzle when it comes to stopping these criminals.

“We imagine a world where children wake up to experience childhood, feel safe wherever they are, and end each day looking forward to tomorrow—that’s what everything we do filters through,” Metcalf said. “We can do a hell of a lot better than what we’ve been doing, but it’s going to take all of us working together, and retail is a vital area that is really untapped.”

The first step to helping in the fight against human trafficking is understanding the victims, and how they ended up in these vulnerable positions.

Shoplifting can be a sort of gateway for at-risk individuals. After being caught shoplifting, some are befriended by traffickers and then manipulated into prostitution.

“Human trafficking is a crime that involves using another person to benefit off their labor, their services, their sex. And you’re using forced fraud or coercion if the victim is a minor and incapable of consent.”

According to Metcalf, there are an estimated 24.9 million human trafficking victims in the US. Around 70 percent of those victims are female, and about one-third of them are children. Minorities, immigrants, and the LGBTQ community are prime targets for traffickers.

“Traffickers look for vulnerabilities,” Metcalf said.

“That’s what they prey on—eating disorders, the LGBTQ community, anybody with vulnerability—that’s where they’re going; that’s who they’re manipulating.”

Most of the time these victims don’t at all consider themselves victims and will willingly do whatever their abusers tell them to. “It’s so hard to even get people to admit that they are minors that are missing out of the foster care system,” Metcalf said. “These are the ‘throwaway kids’ that are being sent into retail establishments.

They’re being run into criminal enterprises. They’re being trained on how to shoplift, how to get these gift cards, how to work them. And the people running this are sitting back and staying safe, because somebody else is going to take the fall for it.”

And parents can be bad guys, too. Metcalf described how he often sees parents manipulating their own kids into shoplifting to avoid facing any sort of punishment themselves.

“We want to get ahead of this,” Metcalf asserted. “How can we recognize this before those kids are so addicted and so broken that they have no childhood left? How do we get there? And we also need [the LP community] to speak up and add to the voice.”

Some are kidnapped, but many are runaways that no one is really looking for. “[When a missing child is a runaway] it moves that child from a very high-level investigative priority to the lowest level of investigative priority, if there’s any investigation done at all,” Metcalf said. “They’re a runaway, they’ll come back when they get tired, or when they want to—that’s the overarching thought. However, kids are running away from something generally—running away from sexual abuse, physical abuse, alcohol, substance abuse—they’re running away from something thinking that they can do better.”

Often, they run right into the hands of criminals who manipulate them with drugs.

“That’s how they control their victims—get them hooked on drugs, What to Look for get some sort of control over them,” Signs of trafficking to look for Metcalf explained. “Then they’ll use include fear, anxiety, tension, them for shoplifting or credit card submission, nervousness, physical fraud schemes. abuse, restraint, confinement,

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ORC Special Edition 2022

Learn more about Kevin Metcalf and the work the National Child Protection Task Force is doing in this exclusive LPM podcast by going to bit.ly/human‑traffickingpodcast or by scanning the QR code.

FEATURE Human Trafficking and ORC

Signs of Human Trafficking ●

Fear

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Anxiety

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Tension

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Submission

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Nervousness

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Physical abuse

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Restraint

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Malnourishment

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Poor hygiene

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Sleep deprivation

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Unusual behavior

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Traveling with a partner that seems older

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Inappropriate clothing

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Identical tattoos

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Multiple phones

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Large amounts of cash or prepaid credit cards

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Motel keys

malnourishment, poor hygiene, sleep deprivation, unusual behavior, traveling with a partner that seems older without a cohesive social dynamic, inappropriate clothing, identical tattoos that could be brands, multiple phones, large amounts of cash or prepaid credit cards, and motel keys.

There are plenty of victims that may not fit these typical descriptors, though.

“Ultimately, big box retail LP staff need to be taught indicators of all human trafficking, not just the 16-year-old girl who is being followed around by a big scary guy who she can’t look at, and not just individuals who don’t speak English and won’t make eye contact with LP staff,” Metcalf explained.

“There are so many other things to look for, and many of these red flags are overlooked because these victims aren’t what retailers see as criminals. So there needs to be a mindset adjustment for better identification.”

In addition to knowing how to spot a potential trafficking victim, LP professionals also need to understand what the next steps are, and how to help the victim.

“Staff are trained on how to contact law enforcement for a shoplifter, how to do investigations, how to write reports, all of which are criminal subject-focused,” Metcalf said. “There’s no training on what to do if suddenly your shoplifting interview turns into a human trafficking case.”

Ultimately the goal is to offer the victim a way out of their situation, so the gut response for most is to call law enforcement. That isn’t necessarily an inappropriate response, said Metcalf, but there are a couple factors that need to be taken into account in these types of situations.

First, the victim may not believe they are being trafficked and may not want help. In these cases, Metcalf recommends calling law enforcement, though it’s a fine line to walk and ultimately must be decided by the retailer. Sometimes it can take many years before a

ORC Special Edition 2022

victim is able or willing to recognize they are being exploited—or they might know they are in a bad situation but feel they have no real way out, so they choose to stay with their abuser.

Loss prevention professionals can be a huge help in the fight against human trafficking.

To learn more about how to get involved with the National Child Protection Task Force, go to ncptf.org.

Second, often trafficking comes with a great deal of violence. The victim’s trafficker may be in the store watching from a few feet away or may be waiting for them in the parking lot. Responding inappropriately may put the victim, staff, or customers in the store at risk. So whatever decision is made needs to be done so with that in mind, Metcalf explained.

The best thing that store‑level LP staff can do is offer assistance and resources without forcing anything on the victim. “Telling that shoplifter before anything else is done that they are in a safe place may help that individual be more honest during an interview,” Metcalf said. “Asking questions that go above and beyond a typical shoplifting interview, such as ‘Are you doing this on your own volition?’ or ‘If you don’t come home with this merchandise what will happen?’ And then offering local resources that they can leverage immediately, not a national phone number, holds a much greater likelihood of that victim taking you up on your offer to help.”

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Eventually, Metcalf sees facial recognition technology in stores as an effective way to catch traffickers. He wants to run a pilot program but recognizes that it has to be done in a way that protects the privacy of innocent bystanders.

Store purchase history, too, can be used to identify traffickers and recover children.

“Retail has really stepped up and helped, and the private technology companies have also stepped up to help us make incredible differences,” Metcalf said. “We are doing a lot with collecting all this intelligence and actually putting it out in training.

We include the retail sector, we include investigations, and we include security in this.

“The greatest way for LP professionals to help in our efforts is bringing the conversation into your company and the industry as a whole,” he explained. “There are things you can do—whether you sell laptops, clothing, or groceries—there are intersections between exploitation and your business.”

He added, “So start having those conversations with your leaders about bringing in external trainers, discussing protocols for what should be done in the event a shoplifter turns out to be a victim.

Strengthen your partnerships with your local law enforcement and ask about what they’re seeing in your area outside of theft and fraud. At this point, the only movement available is forward, and simply starting the conversations and ensuring they continue is the best thing you can do for victims and your business.”

Courtney Wolfe is managing editor digital focusing on expanding the magazine’s digital content and reach. She most recently was managing editor for SDM magazine, a trade publication for security systems integrators. She received her bachelor’s degree in multimedia journalism from Columbia College Chicago. She can be reached at CourtneyW@LPportal.com.

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ORC Special Edition 2022

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What Research Is Telling Us about the State of ORC

R

etail crime is receiving more attention than ever before, and most of the attention is focused on organized retail crime (ORC). The news media regularly reports on ORC, but policymakers are also interested in retail crime. In fact, the Loss Prevention Research Council (LPRC) has been receiving and responding to requests for information about ORC from legislators’ offices and staffers, trade organizations, and others like never before.

Of course, the LPRC is increasingly focused on ORC and other serious retail crimes. This focus is reflected in our 2022 research agenda, which is centered around three key themes, including the role of intelligence, technological integration, and collaboration in loss prevention. All three of these will be key for improving and modernizing loss prevention programs, but they are especially important for reducing ORC. Intelligence is the central issue, but intelligence is built by combining data, information, and knowledge from multiple sources—this requires collaboration among people and organizations, as well as technological integrations that enable retailers to combine data from multiple sources.

More specifically, at the LPRC, we are interested in how intelligence, integration, and collaboration apply to: ● Diverting individuals from initiating a life of crime, ● Deterring offenders, ● Detecting offenses, ● Disrupting offenders, and ● Documenting offenses.

We conduct research on ORC through individual projects and LPRC working groups because we know that we must understand a problem before we can effectively address it. More importantly, ORC is an industry-wide problem, and the entire industry must work together to solve it. However, our research reveals many challenges to reducing ORC. This article discusses these challenges in relation to our research on ORC, beginning with definitional issues.

ORC is an industry wide problem, and the entire industry must work together to solve it. However, our research reveals many challenges to reducing ORC.

ORC is the same. In fact, retailers’ experiences with organized retail crime vary dramatically. Some retailers are victimized by highly sophisticated organized crime rings who steal incredible quantities of product and reintroduce these products into the legitimate supply chain. Other retailers are drowning in smash-and-grab or grab-and-run incidents. Still others are victimized by individuals, couples, and small groups who steal and resell online or at physical locations. There are many other forms of ORC, but the important thing is that ORC varies considerably throughout the industry.

In 2021, we worked on understanding how retailers define ORC. In a survey, we asked loss prevention practitioners to provide a short definition of ORC. One hundred sixteen practitioners responded and provided 116 different definitions, which reflected the variation in ORC throughout the industry. Next, the LPRC analyzed these definitions of ORC to identify the key themes.

One of the key findings is that retailers mean different things when they use the word “organized.” On one hand, some retailers used “organized” to indicate that the offenses were planned by one or more individuals. However, others used “organized” to mean that offenses were coordinated among a group of people. However, the most important factor throughout the definitions is that ORC involves retail crimes that are planned and/or coordinated by one or more individuals to generate individual or group financial profit.

Once we analyzed these definitions and identified key themes, we developed the following composite definition: Organized retail crimes are (1) predatory crimes in which (2) one Defining ORC: or more offenders (3) knowingly and It’s Complicated intentionally (4) plan or coordinate criminal activities (5) on one or more One of the biggest challenges for retailers and policymakers is that not all occasions (6) with the intent of financially

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profiting themselves, a group, or a broader criminal enterprise with which they are associated (7) through the acquisition of cash, other financial instruments, or merchandise that can be resold, returned, exchanged, or otherwise used to generate a profit.

The difficulty with the definition is that retailers will still need to develop internal definitions based on what they are prioritizing. Therefore, it is not clear how useful this definition will be to the industry. However, it may be useful for policymakers who need guidance on what ORC is. Legislators and their staffs will need to do additional work to identify which elements of ORC they want to include in statutes.

Making “Cents” of ORC: Statistics Are Inaccurate and Likely Underestimate ORC One of the things media outlets have homed in on is the accuracy of estimates of ORC, and several media outlets have contacted us about the validity of these estimates.

On one hand, people are correct to criticize the estimates of ORC, however, as explained below, most estimates of organized retail crime are likely underestimates.

There are two major challenges when estimating the amount of ORC. First, as discussed above, there is no common definition of organized retail crime.

Imagine if everyone involved in building a house (framers, plumbers, roofers, finishers) defined a foot using their shoe—all the measurements would be inconsistent because most people’s feet are not the same size. Similarly, retailers’ definitions of ORC are not the same, therefore, one retailer might classify something as ORC while another might not. Given this, a lot of ORC will likely not be included in the estimates.

Retailers’ best strategy for avoiding public nuisance penalties may be to work together to ensure that all organizations in an area are making similar efforts to report crimes. This may have the additional benefit of drawing greater attention to retail crime in communities.

ORC Special Edition 2022

FEATURE What Research Is Telling Us About the State of ORC

A second and more fundamental problem is that, even if every retailer agreed on a definition, retailers vary in their ability to investigate ORC cases. For example, some retailers have teams of ORC investigators, while others do not. Therefore, many retailers lack the ability to detect or document ORC. Many ORC offenders are incredibly sophisticated, and the organized nature of their crimes will not be detected without an investigation. However, even if retailers are equipped to investigate ORC, they are haunted by what we like to refer to as the “specter of sophisticated offenders.” Some sophisticated offenders’ impact on retailers might show up in shrink but may never show up in incident reports and cases because of their sophistication.

Intelligence is built by combining data, information, and knowledge from multiple sources—this requires collaboration among people and organizations, as well as technological integrations that enable retailers to combine data from multiple sources.

Because of these two factors, using dollar figures to estimate the extent of ORC is problematic. Official crime statistics, such as those based on crimes reported to police, are another option for exploring retail crime trends.

Unfortunately, official statistics are probably the most inaccurate source of retail crime data. More importantly, these estimates are most definitely an underestimate.

Criminologists know that crime statistics that are more distant from criminal events are less valid measures of crime. For example, surveying individuals about their experiences with victimization will provide a more accurate estimate of the actual amount of crime than police reports. Furthermore, statistics based on reported crime will be more accurate than data based on arrests, which will be more accurate than prosecution data. This is

ORC Special Edition 2022

because offenses are “filtered” out at every stage—the number of people who are prosecuted is a subset of those who are arrested, which is a subset of reported crimes, which is a subset of all crime.

The US has a few ways of estimating the amount of crime, including the Uniform Crime Reports (UCR), the National Incident Based Reporting System (NIBRS), and the National Crime Victimization Survey (NCVS). The first two sources are based on crimes reported to police, while the third estimates crime by surveying households about residents’ recent experiences with criminal victimization. For 2019, the UCR estimated a rate of 21.31 offenses per 1,000 residents, while the NCVS estimated 33.00 offenses per 1,000 households. These two sources of data paint a very different picture of crime in America.

Unfortunately, there is no criminal victimization survey for businesses that captures the number of recorded incidents. Therefore, there is no way of knowing how many crimes are omitted from the official statistics. Furthermore, to truly track the amount of organized retail crime, we would still need retailers to adopt a common definition, commit resources to detecting and documenting ORC, and then report it to a central organization, such as the LPRC. We are currently pursuing this through the American Retail Crime, Shrink, and Security (ARCSS) project, but we need more retailers to commit to providing incident and shrink data.

Deluge and Demoralization at the Store-Level: Crime Reporting in Retail In focus groups and interviews, we asked thirty-two retail loss prevention representatives to estimate the percentage of “known incidents” that are reported to police. Most retailers were hesitant to provide an estimate because it varies so much by jurisdiction. Furthermore, some retailers are unable or unwilling to share some of these statistics in a group forum. Nevertheless, seven senior retail loss prevention practitioners estimated that between 5 and 50 percent of known incidents

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are reported to police, depending on the jurisdiction. The largest group estimated that approximately 20 to 25 percent of known offenses are reported to police.

Next, we asked the practitioners why they do not report crimes to the police. Nearly all of the practitioners’ responses included a combination of internal and external factors. On one hand store-level personnel are overwhelmed by the amount of crime—as one practitioner noted “if [store-level personnel] reported every crime, they wouldn’t have time to do anything else.” Of course, retailers also noted that, because of labor shortages and turnover, store-level personnel are just overtasked and do not have time to report crimes.

However, loss prevention leaders also noted that store-level personnel are demoralized and many believe reporting property crimes is a waste of time. In many cases, retailers noted that law enforcement will not respond unless the incident meets a formal or informal threshold. For example, some noted that law enforcement will only respond if the incident involves violence, while many said that law enforcement will not respond until the incident reaches the felony level. In other cases, law enforcement agencies may use informal dollar‑amount thresholds that exceed felony-level thresholds when deciding whether to respond or investigate an incident.

Finally, many retailers believe that, even if there is a response, it will not be productive. For example, there will be no investigation, and, in many cases, if there is an arrest, the suspect will be offending again soon.

To be clear, loss prevention practitioners understand that a lot of these issues are due to the challenges law enforcement agencies face. Many expressed their sympathies for law enforcement, who like their own organizations, are faced with too much crime and too little time and resources to address all of it. Nevertheless, as long as these challenges remain, store-level demoralization may continue to play a role in under-reporting crimes.

Unfortunately, other retailers noted that some local law enforcement

agencies have threatened their organizations with public nuisance penalties because they were “over‑reporting” crimes. Public nuisance statutes are often used against organizations that are contributing to local problems because the nature of the business, such as establishments serving alcohol.

However, department stores and general merchandise retailers are simply trying to sell products to the public—they are being victimized, and they are reporting crimes at a greater rate than agencies believe they should. In this case, over‑reporting may not be due to greater crime, but simply because a retailer is encouraging their stores to report crime, while others are not making crime reporting a priority.

In other words, retailers could be punished by attempting to report as many incidents as possible. In this case, retailers’ best strategy may be to work together to ensure that all organizations in an area are making similar efforts to report crimes. This may have the additional benefit of drawing greater attention to retail crime in communities.

These findings suggest that we should be suspicious of any retail crime research that relies solely on official crime statistics from the UCR or NIBRS, especially research that examines the effects of criminal justice reforms on retail crime.

For example, if reforms reduce sanctions for property theft, or reduce the likelihood that law enforcement will respond to crime, then retailers may be less likely to report it to the police in the first place. In this case, it is theoretically possible that actual retail crime could be increasing while rates of crime according to official statistics are decreasing, simply because of the demoralization of retailers.

Simply speaking, unless we establish a better way of tracking retail crimes using incident-level data from retailers, we will not be able to understand trends in crime, nor will we be able to understand how the actual amount of retail crime is related to official crime statistics. Once again, this is why it is important for retailers to participate in the LPRC’s ARCSS project.

could not participate because of internal policies.

Nevertheless, we wanted to understand whether the items that showed up on the “overall” lists corresponded to the items on the ORC lists. Across the lists, there was considerable overlap regarding dollars lost generally and dollars lost to ORC cases. On average across retail sectors, 78 percent of the items on the ORC lists were on the overall shrink lists, according to dollars lost.

However, on the lists according to units lost, only 60 percent of the items on the ORC lists were on the overall shrink lists.

Initially, this suggested that ORC might be a major driver of product loss. However, there is another possible explanation.

Retailers focus their investigations on high-loss items, and especially those that affect the bottom line the most. If this is the case, then the highest loss items would show up in investigations because that is where ORC teams are placing their focus. This would be the reasonable thing for retailers to do and is probably the best explanation for the overlap.

In many cases, retailers only included product categories, which reduced our ability to report the findings at the item‑level.

Nevertheless, the results for general merchandise retailers; grocers; health, beauty, and chain drug stores; and home

Hot Products in ORC In 2021, we wanted to understand the top drivers of shrink, as well as the top products involved in organized retail crime. We asked participating retailers to list their top ten products in terms of ● Units lost overall, ● Dollars lost overall, ● Dollars lost to ORC, and ● Units lost to ORC. Approximately 25 percent of our members (16) submitted data, but many could not provide ORC‑specific data, and many others contacted us to let us know that they

Top Five Product Categories Lost to ORC by Dollar Value by Sector General Merchandise

Grocery

Health, Beauty, Pharmacy Home Improvement

Electronic Floorcare

Energy Drinks

Cosmetics

Portable Power Tools

Stand Mixers

Infant Formula

Fragrances1

Flashlights and Headlights

Infant Formula

Laundry Detergent

Hair Care1

Generators

Smart Home Technology

Oral Care

Infant Formula1

Electronic Floorcare

Other2

Batteries1

Skin Care1

Airless Paint Sprayer

OTC Pain Relievers1

Vitamins1

1. Tied in the sector; 2. Several other products tied for the number 5 spot in the general merchandise sector

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ORC Special Edition 2022

FEATURE What Research Is Telling Us About the State of ORC

improvement retailers are provided in the table shown at the bottom of page 45. These product categories are ranked according to the number of retailers who included the products on the lists they submitted.

Retailers in other sectors also participated, but there was not enough participation to create a list primarily because they did not track ORC data. Nevertheless, apparel and accessories retailers reported that women’s and girls’ apparel—especially activewear—are problematic, while automotive retailers reported that batteries and bulbs were high-theft items. For the most part, the items on these lists follow what we would expect according to the CRAVED model that suggests that concealable, removable, available, valuable, enjoyable, and/or disposable items are more likely to be targets of theft.

Product Protection and Deterrence in ORC Unfortunately, in high-theft areas, retailers are often forced to either lock up products using restrictive devices, such as locking cases, locking peg hooks, keeper boxes, and pull tags, or accept losses as a cost of doing business. There are some innovative approaches, such as self-service locking cases that are accessed by trading personally identifiable information for access to products, but many solutions increase retail friction for both customers and ORC offenders. In 2021, the LPRC conducted research on locked merchandise and found that, in many cases, customers are driven to purchase locked items online or at other retailers.

Unless we establish a better way of tracking retail crimes using incident‑level data from retailers, we will not be able to understand trends in crime, nor will we be able to understand how the actual amount of retail crime is related to official crime statistics.

ORC Special Edition 2022

Retailers need a new paradigm that continues to rely on the principles of situational crime prevention to deter offenders by increasing the effort to commit crimes, such as continuing to harden targets, while also focusing on increasing the risk of consequences for offenders.

Many solutions have a role in deterring offenders, but many solutions are irrelevant to aggressive and brazen ORC offenders who believe there is little risk of criminal justice consequences. Of course, there are also sophisticated offenders who can defeat many product protection solutions. Unfortunately, research suggests that many offenders will just target other retailers who do not use these technologies.

Therefore, investigations, law enforcement, prosecutions, and industry-wide efforts are incredibly important for combating ORC. Without robust, coordinated, and collaborative industry-wide approaches, retailers will continue to increase spending on product protection solutions. Unfortunately, retailers are engaged in two arms races. On one hand, retailers are engaged in an arms race with other retailers—meaning retailers are trying to find the most effective solutions and keep up with the industry. On the other hand, retailers are in an arms race with offenders where they introduce a solution but often see offenders developing new ways of defeating them.

Retailers need a new paradigm that continues to rely on the principles of situational crime prevention to deter offenders by increasing the effort to commit crimes, such as continuing to harden targets, while also focusing on increasing the risk of consequences for offenders.

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This must involve building and using intelligence to investigate and prosecute offenders, as well as disrupt illicit markets. Fortunately, many innovative programs are focused on simultaneously improving their product protection programs and their intelligence and investigative capabilities.

Intelligence-Led Loss Prevention As mentioned at the outset, the role of intelligence in loss prevention is a key focus at the LPRC. Intelligence-led loss prevention revolutionized policing throughout the Western world, just as business intelligence has revolutionized retail. The principles of business intelligence, continuous improvement processes, and intelligence-led crime prevention could easily be applied to loss prevention. Unfortunately, research with retailers suggests that business intelligence practices in loss prevention are often limited and inefficient.

At the most fundamental level, intelligence-led loss prevention would involve the collection and analysis of loss event data. In other words, retailers need to know what was stolen by whom, as well as when, where, and how products were stolen. Next, this information must be analyzed. On one hand, retailers need to be able to identify which products and places are most problematic, which will enable them to appropriately focus their resources and continuously improve their loss prevention program. On the other hand, investigators need this information to link incidents and build cases.

In our interviews with loss prevention professionals, we find that many organizations lack the ability to efficiently collect incident information in a standardized manner.

Efficiency and standardization of incident reporting are key for a few reasons. First, because of labor shortages and turnover, store-level managers and associates need to be able to quickly report the key characteristics of incidents. Second, if incident reporting is not standardized within an organization, it will be more difficult for investigators to link

incidents and build cases. Finally, without standardization, the quality of incidents will vary more than it already does, and, in some cases, incident reports may not have usable information at all.

Furthermore, when incident reporting is weak, retailers must rely on cycle counts to know when product has been stolen. Cycle counts are often labor-intensive and vary in frequency and quality throughout an organization. In fact, some retailers suggest that COVID-19, labor shortages, and turnover has led to declines in the reliability and frequency of cycle counts.

Nevertheless, relying on cycle counts means that investigators must do additional work. Investigators often say that the amount of time it takes to review CCTV footage is one of their greatest inefficiencies.

Retailers reduce these inefficiencies by using video analytics and relying on data from other sensors, such as EAS alarms, but, in some cases they simply do not have the technological capability. Other than cycle counts, most retailers lack the ability to track which items (and how many) leave their store without a sale. Some retailers are using RFID to do this, but these retailers are currently few and far between.

In our interviews and discussions with ORC investigators, getting law enforcement and prosecutors to pay attention to and prioritize their cases is the name of the game. Retailers must continuously improve their ability to build cases and present them to law enforcement and prosecutors.

Intelligence-led loss prevention will require “smarter” product protection solutions that generate more data about loss events, and that can be integrated with other technologies to build intelligence. Fortunately, for the most part, investigators are committed to collaboration because collaboration is necessary for building cases.

Other ORC Research Efforts The LPRC continues to conduct additional research. For example, we are in the process of conducting an industry-wide ORC survey in partnership with LP Magazine, the Loss Prevention Foundation, and

Sensormatic to understand how ORC is affecting retailers at the store-level.

To be clear, this survey is substantially different from the National Retail Federation’s ORC study because it focuses on store-level issues like: ● Criminal justice system response to ORC, ● Fear of crime, ● Local investments in loss prevention, ● Local changes in product access and product availability, and ● Other local issues.

The LPRC encourages all loss prevention practitioners to complete the survey when it is made available.

However, in-store losses are not the only problem. With the expansion of e-commerce, retailers are increasingly concerned with ORC in their e-commerce channel.

The LPRC is currently working to understand which factors are associated with successful investigations and prosecutions by conducting interviews with prosecutors, law enforcement, and retailers. Simply speaking, this will continue to be a key focus for retailers and retail offenders alike, and we need to establish what some have called a “playbook” for investigating and prosecuting these offenses.

Even though organized retail crime is receiving increasing attention from the media, store-level associates, the public, and policymakers, they do not have a sufficient understanding of ORC or related issues. Therefore, we are working to understand ways to increase awareness at the store‑level without promoting imitation by store employees.

The LPRC is also working to better understand issues that are commonly cited as barriers to reducing ORC, such as the “hands off” approach that some retailers have taken. Preliminary results from interviews with retailers indicate that, for the most part, they are incredibly concerned about the well-being of their associates and do not want them to intervene because of the potential for violence.

Finally, the role of intelligence, technological integration, and collaboration will continue to play a major role in LPRC research on organized retail crime. Everything

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described throughout this article points to the need for increased intelligence-gathering capabilities throughout retail. Business intelligence has been a buzzword throughout the industry for years, but, unfortunately, loss prevention still lacks the ability to collect a lot of the information that is necessary to continuously improve their programs, as well as detect and investigate ORC offenses.

The principles of business intelligence, continuous improvement processes, and intelligence-led crime prevention could easily be applied to loss prevention. Unfortunately, research with retailers suggests that business intelligence practices in loss prevention are often limited and inefficient.

The LPRC will continue to support the industry by conducting research on ORC. There are many challenges, including defining ORC, preventing it, reporting incidents, and investigating cases. Intelligence will be key to both continuously improving loss prevention process and building ORC cases, which is why the LPRC continues to prioritize technological integration and collaboration. We invite all retailers and solution providers to join us as we continue to move the industry toward a more intelligent and evidence‑based future.

Dr. Cory Lowe is a research scientist at the Loss Prevention Research Council. He received his doctorate in criminology in 2020 from the University of Florida (UF). At UF he specialized in crime and delinquency prevention, communities and crime, criminological theory, and research methods and data analysis. He has published in peer-reviewed journals and other scholarly publications on the causes of crime, crime and delinquency prevention, and the factors associated with substance use and delinquency. He can be reached at Cory@LPresearch.org.

ORC Special Edition 2022

One Prosecutor’s Thoughts on Laws, Partnerships, and Case Management

O

Anne Marie Schubert

rganized retail crime (ORC) is a pervasive problem that requires experienced investigators, effective communications, strong public‑private partnerships, and diligent investigations with meticulous attention to detail to build and execute an effective case. However, managing the investigation doesn’t end when warrants are served, and arrests are made. The same commitment to excellence must be achieved—and communicated at—every step of the process.

From the prosecutor’s perspective, the investigation must tell a story. Every action and process must be properly executed. All facts and details must be correctly documented. Information must be appropriately communicated.

All the possibilities must be considered, and every box checked in the eyes of the judge and jury to bring the case to a successful conclusion

ORC Special Edition 2022

with the prosecution and conviction of the perpetrators. This simply cannot happen without the cooperation and support of exceptional prosecutors.

Understanding this aspect of the ORC investigation and what our prosecutors are looking for as the case comes to fruition is vital to the success of the investigation.

To gain more perspective, LP Magazine recently sat down with one of the best in the business.

Sacramento County District Attorney Anne Marie Schubert is a career prosecutor with thirty-one years of law enforcement experience. As a Sacramento County prosecutor, she spent most of her career prosecuting some of the area’s most notorious and dangerous criminals. She is nationally recognized in her knowledge of forensic DNA, training and assisting other law enforcement agencies across the country in the use of DNA and Investigative Genetic Genealogy

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(IGG) to solve violent crime. During her career as a prosecutor, Schubert has been recognized by her peers with the Prosecutor of the Year Award and the POST ICI Instructor of the Year Award. Since taking office, she has been committed to working both in the courtroom and in the community to provide the highest level of public safety through prosecution, prevention, and innovation.

Based on your experience, how do you feel ORC activity has impacted your community?

As a citizen, it’s demoralizing to watch individuals steal from retailers and walk out as store associates or security personnel watch as they exit.

We’ve grown accustomed to terms like “hands-off policy,” and it is difficult for many to understand. However, our frustration as prosecutors is not aimed at the retailers, but the

Gorodenkoff / Shutterstock.com

Prosecuting ORC Cases

decriminalization of crime, including the decriminalization of theft. With the exception of those involved in these crimes, the entire community is demoralized.

We find that the criminal element adapts to whatever is most lucrative and has the lowest potential for detection and/or punishment. It is a simple matter of risk versus reward, and for those involved, they feel the rewards far outweigh the risks. For some of those involved in organized retail crime, they continue to steal simply because they realize that the punishments are relatively minor in comparison to other crimes, which leads them to focus their criminal activities in this arena. We have witnessed individuals with ten‑plus page long criminal histories (RAP sheets) engaged in retail theft because the downside to this crime is no longer present in their minds. For others, ORC is simply a starting point, leading to many other types of criminal activity that greatly impacts the health of our communities and the safety of our citizens.

Every situation must be evaluated based on its own merits. However, as a prosecutor, in general terms, how important is it that information is communicated appropriately and effectively by law enforcement and retailers when presenting an ORC investigation to you?

A successful criminal prosecution is the result of a good investigation and following the facts to the appropriate conclusions. We know this from our consistent history of criminal prosecutions as our office has a reputation for holding individuals accountable for their conduct.

Experience has shown that an investigation considered unprosecutable is often a matter of miscommunication between the investigators and the prosecutors.

Communicating details in a way that the facts of the case are definitive and clearly understood is crucial. This can occur in many ways, and poor report writing if often a primary contributor to the problem.

I would add that successful prosecutions have as a key component—teamwork between all parties involved. That often begins with building proactive relationships, often well before a crime even occurs. This leads to a better understanding for all involved when building a case and what is needed for the investigation to lead to a successful prosecution.

To address the impact of increased theft in our communities, it is critical to develop relationships between prosecutors, law enforcement, and the retailers. A clear understanding of documenting evidence and knowing what prosecutors look for in a successful criminal prosecution forms the bedrock of a solid case.

How would you prefer information be communicated to you when an ORC case is presented?

How do you feel this best supports prosecution efforts?

As a general rule, the investigating law enforcement agent is our primary point of contact. However, on numerous occasions we have found there is no substitute for being able to call the contact person from the victim/retailer to conduct quick and accurate follow-up.

What are some of the primary obstacles you face when prosecuting ORC cases?

How might law enforcement and retail investigators best support you in overcoming those obstacles?

There is a short and a long answer here. The long answer is related to Einstein’s definition of insanity—the repetition of the same conduct

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and the expectation of a different outcome. The biggest obstacle is the current state of the law. We find that the folks who are upset about that state of the law continue to vote for the same legislators who voted in favor of the decriminalization of theft and have created this environment.

In that sense our biggest obstacle is voter education.

For example, in California, Proposition 47 deserves much blame for the rampant theft in our state.

Proposition 47 was billed to the voters as “The Safe Neighborhood and Schools Act.” Yet it has done nothing to protect our neighborhoods and schools. This proposition reduced virtually all drug and theft crimes to misdemeanors. As a result, thieves and addicts now receive the equivalent of a traffic ticket when they commit these crimes. In California, this has produced two classes of thieves—those who steal repeatedly to support their drug addiction and those who steal to resell those stolen items elsewhere. As a result, we have not simply emboldened more crime, but further enabled addicts to support their destructive habits rather than seek treatment.

In California, our policy makers have eroded accountability through various avenues, including legislation and regulations. The consequences of these reckless policies include reduced sentences and early releases of violent criminals with little to no supervision or services. Such measures endanger our community and reduce the quality of our lives.

This adds to the increase in theft and further burdens businesses and law enforcement when addressing these crimes.

To address the impact of increased theft in our communities, it is critical to develop relationships between prosecutors, law enforcement, and the retailers. A clear understanding of documenting evidence and knowing what prosecutors look for in a successful criminal prosecution forms the bedrock of a solid case.

This would include video evidence, both inside and outside the business, that can support the prosecution of the case. Thorough documentation of

ORC Special Edition 2022

Experience has shown that an investigation considered unprosecutable is often a matter of miscommunication between the investigators and the prosecutors.

Communicating details in a way that the facts of the case are definitive and clearly understood is crucial.

This can occur in many ways, and poor report writing if often a primary contributor to the problem.

FEATURE Procecuting ORC Cases

When managing ORC investigations, effective public-private partnerships are critical. Developing strong relationships are best achieved when we build bridges and gain perspective. Taking the initiative to build these relationships by reaching out to our law enforcement and prosecutor partners is an important first step.

the necessary witnesses to establish the crimes committed is critical.

This includes addressing such questions as: ● Will the recording software overwrite the program after a set number of days? ● Was the merchandise retained if the theft was thwarted? ● Who can lay the foundation for the recording equipment?

In our view, if the retailer views the crime as a forensic event, an event that will later play out in court with a host of evidentiary rules, the evidence will be better documented and maintained.

cases can be extremely useful for successful prosecution. Additionally, the initial submission of the case to the prosecutor’s office for a criminal filing decision will play a critical role in establishing the type of case that can be prosecuted.

If the prosecution knows the magnitude of the crime, including the level of criminal sophistication and complexity of the case, the likelihood for success is enhanced.

For instance, when the prosecution knows that multiple individuals were acting in concert for a

Investigating and prosecuting ORC cases quite often span multi‑jurisdictional multiple jurisdictions and even multiple states. What, cases creates significant if anything, can retailers and challenges for law our law enforcement partners do to support prosecutors enforcement and in cases such as these? prosecutors. The thieves Investigating and prosecuting undoubtedly understand multi-jurisdictional cases creates significant challenges for law these challenges enforcement and prosecutors. The and take advantage. thieves undoubtedly understand Documentation and these challenges and take advantage. Documentation and the the ability to network ability to network within and outside within and outside the jurisdiction is a critical tool in the prosecution effort. the jurisdiction is a For example, knowing that this critical tool in the same unique type of theft was prosecution effort. committed at other stores in the same retail chain often leads to solving unsolved cases and can lead to the admissibility of additional evidence critical to a jury’s assessment of guilt. When a retailer documents that this exact same type of theft was committed in a neighboring city, prosecutors and law enforcement can reach out to the other jurisdiction and build a better case.

specific goal, different charges, like conspiracy, may apply. Likewise, individuals who have a secondary role like getaway drivers, take on a different significance when that distinction is made clear in the investigation reports.

When presenting an ORC case to a judge and jury, do you believe that most have Considering your experience a clear understanding of the difference between ORC prosecuting these cases, how can the retail community and shoplifting activity? better educate prosecutors If a strong, effective investigation is on the differences conducted and a viable prosecution between an ORC case case is generated, it is up to the and a shoplifting case? prosecutors to educate the jury on

Education and training for law enforcement and prosecutors on the differences between these types of

ORC Special Edition 2022

the differences between organized retail theft and shoplifting. This comes through opening statements,

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presentation of the evidence, and closing arguments and supported by well-managed investigations. If presented all the relevant evidence, the jury is well-equipped to come to a just result.

Do victim impact statements from retailers help in the sentencing process?

Yes, it is always important to educate the sentencing authority—the judge—on the impact the crime has on the victim and our community. Thorough and well-written victim impact statements are an important part of the process.

You mentioned the importance of effective, well-written laws and how they can influence many of today’s greatest community concerns, including ORC. Would you elaborate?

The policies and laws we pass are critical to public safety in our communities. The importance of effective, well-written laws cannot be overstated. By the same respect, the impact on the business community and quality of life of all our citizens is negatively impacted when laws are passed that eliminate and/or weaken accountability.

This can be seen in the rise in theft, increased drug addiction, and the homeless crisis we are seeing in our communities. The overall increase in crime and the decrease in the quality of life is directly tied to the policies enacted by the policy makers. Until we tell our elected officials that these policies are unacceptable, we will continue to see this downward spiral.

When managing ORC investigations, effective public‑private partnerships are critical. Developing strong relationships are best achieved when we build bridges and gain perspective.

Taking the initiative to build these relationships by reaching out to our law enforcement and prosecutor partners in an important first step.

EDITOR’S NOTE: Special thanks to ALTO for helping arrange this interview with District Attorney Schubert.

I Jason Brewer

n the LP Magazine January 2022 ORC BLITZ virtual event, three executives from the Retail Industry Leaders Association (RILA) explained how their organization is working with their retail members to push for federal and state legislation that would increase penalties for organized retail crime (ORC) as well as force online marketplaces to be more transparent with who is selling goods on their platforms. Following are excerpts from their presentation.

Jason Brewer Senior EVP, Communications and Marketing

Michael Hanson

Theft is something that’s not new to retail, but about a year before the pandemic, many retailers saw an uptick in ORC, and it was having an impact not only on their bottom lines, but on their employees. They were starting to see increasing violence in stores, and the brazenness with which thieves were coming into stores was getting out of hand.

This started us thinking about how to tackle this challenge. In our conversations with RILA’s asset protection community and other

ORC Special Edition 2022

stakeholders, we identified three areas that contributed to the situation: ● First, felony thresholds at the state level had been raised in several places. This resulted in retail theft crimes not treated as seriously as in the past. ● Second, in many cases, police were no longer responding in many jurisdictions to what they perceived as simple petty theft. ● Third, the rise in online marketplaces as a place to very quickly, and anonymously, fence large quantities of stolen goods.

The selling of stolen goods on online marketplaces was one area that our members have seen a huge uptick over the last several years, and during the pandemic, the problem got exponentially worse.

They consistently see product of theirs that they suspect has been stolen from their stores showing up on these platforms. That is the main problem that we have sought to address through a coalition of different business groups and companies. Together we created the Buy Safe America coalition to shine a spotlight on the problem and to

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Zolnierek / Shutterstock.com

Leading the Push for ORC Legislation help policymakers understand what was happening.

We are trying to address it from multiple angles. We want to work with law enforcement on smarter laws at the state and local level. We want better collaboration at the state and local level both with retailers, the FBI, and other law enforcement agencies. But the big thing we’re focusing on is the need for more transparency online. It’s way too easy to hide behind a screen name and fence stolen product. That’s something that we think Congress needs to address.

Michael Hanson Senior EVP, Public Affairs As we had conversations with members of Congress about stopping ORC, they really focused in on creating more transparency and accountability on third-party marketplaces, which eventually led to the introduction of the INFORM Consumers Act. The bill does a couple of things. It requires online marketplaces to verify certain third-party sellers by confirming certain business information, such as tax identification number, bank account information, name, email, address, and

phone number, which doesn’t happen on all marketplaces right now.

The second part is the seller must provide contact information to the customer so the consumer can make a more informed choice of who they’re buying from. And if there’s a problem with that good, they can contact that seller and either get a refund or exchange the good. From a retail perspective, we all know that if you go into a brick-and-mortar store and buy a product that you’re unhappy with, you know exactly where to go. You can talk to the salesperson or to the manager and get your problem fixed. Consumers deserve that same right whether they buy a consumer product in a brick‑and‑mortar retail store or if they buy it on a third-party marketplace.

The simple act of verification and disclosure has gained tremendous momentum across all sectors of the business community. When the Buy Safe America coalition was first set up it was just retailers. Now, we have close to sixty different companies, associations, and others who have joined, because the legislation not only helps to stop ORC, but it also helps to mitigate the sale of counterfeit goods.

One of the reasons we’ve been so successful at the federal level is the direct engagement of retailers, brands, law enforcement, and trade associations. Because of this, members of Congress have been active in their support. Rep. Jan Schakowsky (D-IL), chair of the House Energy and Commerce Subcommittee on Consumer Protection held a hearing and on the Senate side the chairman of the Senate Judiciary Committee, Dick Durbin, invited a host of panelists to testify as well, including Ben Dugan from CVS. Hearing about ORC firsthand from retailers really resonated with the members of the committees and highlighted the need for legislation to help solve this growing problem.

Hearings like this and the recent press stories about ORC and counterfeits has really brought lawmakers together because they see not only all the dangerous counterfeit products that are harming consumers, but they have come to understand what ORC means to the community and retail workers.

As they have seen both of these crimes grow, the support for the INFORM Consumers Act has also grown.

In fact, there’s a bill in the US House called the Competes Act, and the INFORM Consumers Act is part of

that bill. Our hope is that through the negotiations between the House and Senate on this legislation, the INFORM Consumers Act may become law, hopefully within the next few months.

Lisa LaBruno Esq. Senior EVP, Retail Operations In retail operations, we’re leveraging our AP community, particularly our Asset Protection Leaders Council and our Crimes Against Business Committee to lead initiatives that are focused on collaboration among key stakeholders—retailers, law enforcement, prosecutors, and online marketplaces.

Online Marketplaces. A couple of years ago, we invited online marketplaces to Washington, DC, to meet with a group of retailers to talk about the growing problem of stolen product being offered for sale on online platforms. We hoped to persuade online marketplaces like Amazon to partner with retailers, share information, and put steps in place to proactively identify stolen goods.

Since that in-person meeting, RILA has hosted a regular cadence of calls with Amazon, Facebook, OfferUp, and others. Retailers told the online marketplaces about the persistent challenges they were experiencing and shared suggestions for how the parties could work more cooperatively to combat ORC. Candidly, we were met with a lot of resistance on the part of the online marketplaces and there was minimal progress. They were unwilling to voluntarily make enhancements to their platforms that would slow down the sale of stolen product on their platforms. So, we needed to compel them—via legislation—to do what we were asking them to do voluntarily.

Retailers. We are driving several initiatives with RILA member companies to improve ORC information sharing among retailers. One that I am really excited about is our partnership with IBM to develop a retail theft information sharing platform. Nine RILA member retailers participated in the proof of concept. Results were very promising, and we’ve invited several more retailers to participate and help refine things.

We’re aiming to publicly launch the platform in the spring.

Federal Law Enforcement. I’m energized by the recent launch by Homeland Security Investigations of its ORC task force. RILA is supporting their effort, giving them a platform to share

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progress with retailers and connecting them to retail ORC teams. We’re also working closely with the FBI on an ORC threat assessment. RILA member companies are sharing case data with the FBI to help the agency understand the scope of the problem so they can identify resource needs.

Prosecutors. RILA is engaging with prosecutors on several levels. More broadly, we are hosting an industry-first Retailer-District Attorney Retail Theft Roundtable in June. RILA partnered with the National District Attorneys Association to bring retailers and DAs from across the country together to address the problem of persistent habitual offenders and the escalation of violence in stores. And we are working closely with attorneys general (AG) and commanders of their offices’ ORC task forces. I’m excited that AGs and their teams will be well represented at RILA’s Retail AP Conference in April.

Their participation is reflective of the partnerships we’ve formed.

Finally, we’re partnering with county DAs in the most challenging environments to tackle retail theft in a way that is sustainable and will have long-term impact. For example, last summer we brokered a meeting with the Manhattan DA’s office given the rise in theft and violence in city stores. Since then, we’re driving parallel initiatives with the office’s top prosecutors as well as with their investigation unit. We’re hoping to replicate this in other DA’s offices across the country.

I’ve been involved in ORC work since my days as a prosecutor thirty years ago. Not much has changed over the years—until recently. I feel like there’s a real sense of urgency to tackle the problem of persistent and organized retail theft and the violence that comes along with it.

And it’s not just the retailers who are talking about it—law enforcement, prosecutors, politicians all have skin in the game. We’re starting to see real progress, and I’m optimistic that it’s just the beginning.

This article includes excerpts from a presentation by these three executives in a January virtual event.

To view their entire presentation or listen to the podcast version, visit bit.ly/RILA-INFORM-act or scan the QR code.

ORC Special Edition 2022

Lisa LaBruno

The selling of stolen goods on online marketplaces was one area that our members have seen a huge uptick over the last several years, and during the pandemic, the problem got exponentially worse.

DIRECTORY Organized Retail Crime Associations

Organized Retail Crime Associations A Directory of Local, State, and Regional ORCAs in the US

T

he number of organized retail crime associations (ORCAs) has grown steadily in recent years with a primary emphasis on assisting law enforcement, retail investigators, and prosecutors with the identification, investigation, and prosecution of those involved in organized retail crime (ORC).

In response to the scope and severity of organized retail crime concerns across the country, there has been an increased effort on the part of retailers and law enforcement agencies to share information regarding ORC at the local, state, and regional levels.

ORCAs have helped provide that vehicle, opening doors to improve legislation, enhance investigations, and build cooperative relationships in the battle against ORC. The objectives of ORCAs could include but are not limited to the following: ● Providing a web-based platform for organized retail crime information and intelligence-sharing between retail investigators and law enforcement. ● Facilitating meetings, seminars, webinars, and conferences specific to ORC-related topics.

Providing a forum for networking and collaboration between retailers, law enforcement, and other partners involved in combating ORC-related issues at the local, regional, and national levels. ● Supporting law enforcement, retail investigators, and prosecutors by providing continuing education through various training opportunities. ● Educating the general public on ORC issues, including victim prevention, response, and awareness.

Successful ORCAs are typically independent, multi‑jurisdictional, customer-centric, and a recognized non-profit to be best positioned to lead the publicprivate partnership and combat ORC. With a primary mission to communicate effectively, work together, and share resources, ORCAs need to cultivate good partnerships, high levels of cooperation, and a strong commitment from everyone involved to be most effective. To learn more about these ORCAs and the role they play in supporting the retail loss prevention and law enforcement communities, contact those found in your area from the list below. ●

Alaska Organized Retail Crime Alliance (AKORCA)

Carolinas Organized Retail Crime Alliance (CORCA)

Florida Organized Retail Crime Exchange (T-Force)

akorca.org

corca.org | 919-832-0811

frf.org

Alert Mid-South TennesseeAlabama-Mississippi Organized Retail Crime Alliance

Central New York Organized Retail Crime Alliance (CNYORCA)

Florida Law Enforcement Property Recovery Unit (FLEPRU)

bit.ly/CNY-orca

flepru.org

Coalition of Law Enforcement and Retail (CLEAR)

Georgia Retailers Organized Crime Alliance (GROC)

clearusa.org | 954-410-8760

georgiaroc.org

Colorado Organized Retail Crime Alliance (COORCA)

Hawaii Organized Retail Crime Alliance (HIORCA)

coorca.org | 720-606-9296

hiorca.org

Cook County (Illinois) Regional Organized Crime Task Force (CCROC)

Indiana Regional Organized Crime Coalition (INDIANAROC)

ccroc.org

indianaroc.org

alertmidsouth.org

Arizona Organized Retail Crime Association (AZORCA) arizonaorca.org

Arkansas Organized Retail Crime Association (AORCA) aorca.org

California Organized Retail Crimes Association (CAL-ORCA) cal-orca.org

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Sponsors

Kentucky Organized Retail Crime Association (KYORCA)

Utah Organized Retail Crime Association (UTORCA)

kyorca.org

utorca.org

NY, NJ, PA Metro Area Organized Retail Crime Alliance (METRORCA)

Washington Organized Retail Crime Association (WAORCA)

metrorca.org

Michigan Regional Organized Retail Crime Association (MIORCA)

ALTO..........................................................................51 alto.us

waorca.org

Wisconsin Organized Retail Crime Association wiorca.org

Axis Communications......................................15 axis.com/forensic-search-genetec

GOVERNMENT AGENCIES

Checkpoint............................................................23 checkpointsystems.com

mi-orca.org | 586-353-1153 x3858

Mid-Atlantic Organized Retail Crime Alliance (MAORCA) maorca.org

Federal Bureau of Investigation (FBI)

Minnesota Organized Retail Crime Association (MNORCA)

fbi.gov

mnorca.com

secretservice.gov

Montana Organized Retail Crime Alliance (MTORCA) mtorca.org

National Anti-Organized Retail Crime Association (NAORCA) naorca.org

Nevada Organized Retail Crime Alliance nvorca.org | 775-353-2299

New England Organized Retail Crime Alliance (NEORCA) retailersma.org/neorca

Ohio Regional Organized Crime Coalition (OROCC) orocc.org

Oklahoma Organized Retail Crime Association (OKORCA) okorca.com

Organized Retail Crime Association of Idaho (ORCAID) orcaid.org

Organized Retail Crime Association of Oregon (ORCAOR)

Auror .......................................................................... 3 auror.co

CONTROLTEK...................................................... 56 controltekusa.com

US Secret Service DefenseLite............................................................. 2 defenselite.com

US Department of Homeland Security (DHS)

Detective Analytics.......................................... 27 detectiveanalytics.com

dhs.gov

US Immigration & Customs Enforcement (ICE)

Gatekeeper Systems.......................................... 5 gatekeepersystems.com

ice.gov

US Drug Enforcement Administration (DEA)

Genetec.................................................................. 29 genetec.com/organized-retail-crime

dea.gov/index.shtml

US Postal Inspection Service postalinspectors.uspis.gov

ORC Investigations Certificate....................21 lppro.com

LP Magazine has taken every care to ensure that this list is accurate and comprehensive, but omissions are always possible. If your organization or association is not listed, or if it includes outdated contact information, please reach out to us at editor@lpportal.com.

This post is updated regularly at LossPreventionMedia.com/orcas-list.

orcaor.org

San Diego Organized Retail Crime Alliance (SDORCA)

QMI Security Solutions....................................37 qmiusa.com Securitech..............................................................41 securitech.com/lossprevention ThinkLP...................................................................... 7 thinklp.com Vigilare.....................................................................13 vigilareus.com Zebra.........................................................................19 zebrainventory.com

sdorca.org

Texas Organized Retail Crime Association (TEXASORCA) txorca.org

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ORC Special Edition 2022

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