Home > Articles

Organized Retail Crime Goes Global

Hitha Prabhakar discusses the connection between organized retail crime and terrorism.
This chapter is from the book

A hush falls over the room as a man in a designer suit jacket walks to the podium. The man is tall and well spoken and is comfortable addressing an audience of 30,000. Methodically pointing to charts projected onto a screen using high-tech equipment, he reviews how much this organization spent within the last year, its new financial targets, how it can make more money in the upcoming year, and, most importantly, how the American army fighting across the border in Afghanistan is no match for his organization. In the wings, spokespeople for the organization take notes furiously, ready to communicate the main points of the meeting to the rest of the world.1

This man isn't the chief executive of a Fortune 500 company. He is Baitullah Mehsud, head of Pakistan's Tehreek-e-Taliban terrorist group.2 (Mehsud was subsequently killed in August of 2009 along the Afghan border in U.S. air strikes.)

As it turns out, consumers and businesses weren't the only ones suffering from the repercussions of the global recession. Terrorist organizations such as al Qaeda that once brought in close to $30 million a year before the 9/11 attacks felt the financial pinch just like legitimate businesses around the world. Abd al Hamid Al Mujil, known as al Qaeda's "million dollar man,"3 at one point turned to charitable donations to raise money for the terrorist group. When the U.S. government realized in 2006 that he was using his position as the executive director of the eastern province branch of the International Islamic Relief Organization (IIRO) to funnel money back to al Qaeda, he was removed from his post, costing the IIRO millions of dollars in potential donations. With its once large bank account dwindling, al Qaeda decided to decentralize. Instead of having one major unit functioning in the Afghanistan and Pakistan regions, al Qaeda suddenly had affiliates all over the world that shared the same ideals but planned and executed their own terrorist attacks.

Professor Bill Martel of Tufts University's The Fletcher School of Law and Diplomacy told me, "Pre-9/11, the conventional wisdom was that groups like al Qaeda were tightly organized with clear lines of control from its leadership. What's happening now is that al Qaeda has lost central control [of] its power as well as its financing. Once the U.S. began to attack al Qaeda, it became a very dynamic organization with a constantly evolving set of networks all connected to the core group. These subgroups are all highly adaptable as well and take it upon themselves to recruit from within—convincing their own people that supporting their group is one step closer to God while using the Internet for self recruitment, planning and financing."4

Martell notes that al Qaeda wasn't the only organization facing a funds shortage once these groups started to come under greater scrutiny and attack. After all, they declared war on the U.S. and attacked it, and in response the U.S. attacked al Qaeda and its financial means of support. Hezbollah and the Taliban also became decentralized, creating an opportunity for subgroups to crop up in unsuspecting areas such as Latin America, Africa, South and Southeast Asia, and even the U.S. These affiliated groups supported the main organization and indoctrinated extremist ideals shared by their members worldwide. However, they were on their own when it came to getting money to fund attacks. They raised funds by increasing the cocaine trade, carrying out kidnappings, and running scams that bilked donors out of money meant for charitable organizations. Transferring funds via hawalas5 was commonplace and in fact was a standard way of accumulating money.

What wasn't typical was that the Lashkar-e-Taiba (LeT), al Shabaab, and South American cells of Hezbollah6 were increasingly relying on gangs, cartels, and international sympathizers to build their bank accounts. One of the main sources of money was organized retail crime (ORC).

Why Is ORC Such a Threat?

Once known to the retail community as the minor crime of shoplifting, in the past decade ORC has grown into an estimated $38 billion a year black market operation.7 U.S. government agencies such as Immigration and Customs Enforcement (ICE), the Federal Bureau of Investigation (FBI), and the Department of Homeland Security (DHS) have all tracked ORC synchronized teams that steal from our economy and use the money to attack us and support international terrorist groups. These groups include Partiya Karkeren Kurdistan (PKK) in Iraq (led by Saddam Hussein's son, Uday, until his death), the FARC (Revolutionary Armed Forces of Colombia), the IRA in Ireland, as well as Hezbollah, Hamas, and Lashkar-e-Taiba (Pakistan/India).8

These terrorist organizations are hell-bent on destroying not only the lives of the people within their own countries who don't stand with them (or their mission) but also the American economy, its people, and its way of life. While it is difficult for government organizations to track exactly how much money is actually being made, the National Retail Federation (NRF), ICE and FBI estimates the proceeds from stolen goods equal $600 million dollars annually and have been funding everything from weapons, to fake visas and passports, to paramilitary equipment.9 ORC is one of the easiest and least detectable ways for criminals to make money quickly and send it to terrorist groups overseas. What's even more disturbing is that these terrorist organizations are using grassroots tactics to recruit people into ORC rings. According to Joe LaRocca, spokesperson for the NRF's ORC initiative, the rise in ORC, especially within the past two years, has had to do with the economy. Consumers were quite literally "dying for a deal" by purchasing items that were stolen by crime rings with links to terrorist organizations overseas—they just didn't realize it.

"The economy played a big role in the organized retail crime and the resale market," says LaRocca. "Consumers who were cashed-strapped and lost their jobs looked for alternative places to purchase everyday items at an affordable cost. When places like Walmart, Target, and Walgreens became too expensive for them, the only option was to tap into resale markets, flea markets, pawn shops, and online web sites. These consumers forfeited their comfort and trust with retailers they knew, and chose those [retailers] who had what they were looking for at lower prices in order to save some money. And when the economy is tight like that, consumers made those tough choices. Suddenly, shopping at a desolate warehouse or purchasing a clearly fake or stolen purse at a handbag party thrown by a friend seemed like a good idea, regardless of who or what the ripple effect may be [impacting]."10

LaRocca sat down with me one humid afternoon at the Atlanta National Retail Foundation conference on loss prevention. He explained how domestic ORC groups were fully aware of American consumers' spending vulnerabilities and took advantage of them. "People were forced to do more with less, and these guys were smart enough to make money off of it," he said. LaRocca also pointed out that with the economic downsizing that was taking place, retailers had to cut back, creating an endless cycle of understaffed stores that aided criminal acts.

Another reason why these crimes are so attractive to ORC rings is that they are not looked upon as federal crimes. Retail theft falls into the category of "property theft" and takes on a lesser charge than an offense that would fall within the jurisdiction of the major crimes division. Despite ORC rings stealing upwards of $1 million in a couple of months, they are still viewed as petty thefts in some instances.

One ORC ring, which was busted in Polk County, Florida in 2008, involved an orchestrated group who stole $100 million in over-the-counter (OTC) drugs, beauty products, and baby formula, reported Casey Chroust, executive vice president of retail operations at the Retail Industry Leaders Association (RILA).11 This group was a well-organized crime ring, masterminded by someone who knew how the system worked. They worked as a team, blocking cameras and using boosters (someone who steals items from a store) to steal the merchandise, making handsome profits.

Up the coast in New York City, another ORC leader established and oversaw a ring of about 75 to 100 people. Jerry Biggs, director of the organized retail crime division at Walgreens, called this man "Samuel Elias." Elias' ring stole upwards of $2.5 million in merchandise from Walgreens per hit and used it to fund everything from his gambling addiction to overseas accounts based in Jordan.

Both of these rings are similar in how they organized and executed and profited from ORC. However, neither was prosecuted under federal statutes despite engaging in anti-American acts for years, including sending money overseas to support terrorist organizations.

These are just small examples of a larger issue that spans three continents and involves people and cultures from around the world, including the U.S.

Although some involved in ORC are doing it for personal financial gain, most are motivated by the idea of jihad and having a hand (small or large) in plotting the demise of one of the world's greatest superpowers—the United States of America.

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.

Overview


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information


To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.

Surveys

Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.

Newsletters

If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information


Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.

Security


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.

Children


This site is not directed to children under the age of 13.

Marketing


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information


If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.

Choice/Opt-out


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information


Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents


California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure


Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.

Links


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact


Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice


We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020