Black Market Billions

Black Market Billions: How Organized Retail Crime Funds Global Terrorists, Hitha Prabhakar, FT Press, 2012

Shoplifting (now called Organized Retail Crime) is no longer perpetrated just by people from the inner city needing money for drugs. It is a multi-billion dollar, worldwide industry enriching various terrorist groups all over the world.

These are very tight-knit groups, akin to Mafia "families." The "boosters" travel certain routes around America, doing the actual shoplifting. They give the items to a Level 1 fence, who might give or sell them to a level 2 or 3 fence. These could be legitimate import/export businesses doing the fencing, with the illegal part as a sideline. By this time, it is nearly impossible to track the items. Sometimes, the items are sold right back to the retailer from which they were stolen. They could also be sold on online auction sites (like ebay), and they could show up at your local flea market. There are occasional high-profile seizures of millions of dollars in fake or stolen goods, but, in general, the thieves are several steps ahead of the authorities.

Various law enforcement agencies, from the local to the federal level, either can't, or don't want to, share information. They all want the "big score." Individual state laws are full of loopholes, or are ambiguous, about basic things like the definition of "shoplifting." When someone is arrested, the local District Attorney's office might not want to spend the time following the money, or may be interested only in "Mr. Big." There are a number of ways to move money overseas that get around the federal $10,000 threshold. Thieves are certainly using them, but legislation has yet to catch up.

What can the average mall retailer do about it? They can start by training their employees to watch for shoplifters. Especially during the holidays, many part-timers are hired who are not trained in loss prevention, or who don't care (very often, employees are doing the stealing). Stores need to balance increased spending on loss prevention against not driving away customers. During the current economic uncertainty, everyone wants a bargain. Is that "discounted" designer handbag or infant formula really such a bargain knowing that your money could end up in the coffers of Colombia's FARC or Hamas?

To call this book an eye-opener is a huge understatement. It is a very interesting book that is highly recommended.