ORC a ‘Gateway Crime’: Kroger

MICHAEL GARRY

NEW YORK — Organized retail crime, responsible annually for billions of dollars of theft from retailers, is a “gateway crime” linked to narcotics trafficking, counterfeiting of U.S. and foreign currency, and illegal gun activity, said Dennis Dansak, corporate manager, organized retail crime, Kroger Co.

The association of ORC with more high-profile crimes is helping retailers to attract the attention of law enforcement agencies to ORC, which is sometimes regarded by legal authorities as garden-variety shoplifting, Dansak noted during a session last week at the National Retail Federation's 100th Annual Convention & Expo here.

In fact, the vast majority of Kroger's ORC cases “have led law enforcement not only to make arrests for those cases, but to initiate investigations into other criminal activity,” said Dansak. “Law enforcement knows if we have an ORC booster in custody, they're going to have an informant into other criminal activity.” More than 90% of ORC boosters (the individuals who steal from stores) are narcotics users, he added.

“We need law enforcement to partner with us to get ORC cases investigated and to make arrests,” he added. “This is not shoplifting where a 16-year-old girl is grabbing eye-liner.”

ORC thefts nationally in 2009 are estimated by industry sources to have run between $15 billion and $30 billion. The dollar losses per episode of ORC are “constantly increasing,” said Dansak. “As the second largest retailer in the U.S., we're losing a lot. I take it personally.” He put the average dollar amount per case lost to Kroger and other retailers in a particular geography at more than $500,000. The losses have prompted Kroger to employ full-time ORC investigators across the U.S.

In one typical ORC case cited by Dansak, Kroger apprehended a booster for stealing $127 in Similac baby formula, a commonly targeted item. Many loss prevention executives might not investigate a case like this, but “if someone is caught with that, it's worth a look,” he said. This booster admitted to stealing $600 daily, four days per week from Kroger and other retailers over the previous 12 months, and acknowledged that there were 26 other boosters in his ORC ring; in total, the ring pilfered about $3.4 million in goods from Kroger and the other retailers. The booster also identified five local fencing operators.

“These boosters want to cooperate with law enforcement, ORC investigators and loss prevention officials,” said Dansak. “They don't want to go to jail. They will give up everybody except their family.”

While stolen retail product is generally fenced at local shops, flea markets and online marketplaces, some of it is exported to other countries, Dansak said. Last October, arrests were made in a case in which six used cars per month, stuffed with stolen products, were shipped in cargo containers to foreign countries. The ORC ring, which included 32 boosters and two fencing operations, stole $4.87 million in goods from six retailers — including $1.21 million from Kroger — over the previous 16 months.

In the past, retailers complained about not getting cooperation from eBay in stopping ORC gangs from using the auction site to sell stolen goods, but that has changed dramatically, Dansak said. “EBay helps us identify our products online, provides us with PayPal accounts and ATM accounts, and tell us how much we can hold in PayPal. They will work with us to make sure that people are arrested and prosecuted.” But that type of cooperation is still not coming from other online marketplaces, he added.