Organized Retail Crime (ORC) Surveillance
PI Magazine Article – Annual Surveillance Issue
BY Darin D. Fredrickson, CPP
One of the most challenging surveillances an investigator can attempt is an Organized Retail Crime Investigation (ORC). The transition between stationary, mobile, and foot surveillance – And the fast pace of the activity – Can leave even the most veteran investigator exhausted.
ORC is the theft of merchandise from a retailer to be resold by “fences” on the black market or through brick and mortar stores and E-commerce sites. Although this type of crime has occurred for decades, with the introduction of E-commerce into the marketplace there is a significant increase in retail theft in the U.S and other parts of the free world. In fact, a National Retail Federation Retail Security Survey conducted in 2016 found that 100 percent of retailers were impacted by ORC. Store losses in the U.S. totaled $45.2 billion in 2015.
Some of the most popular items targeted by thieves are designer clothing and handbags, health and beauty products, laundry detergent, infant formula, electronics, liquor, and even pet products. For example, in a case resolved in 2017, a chain of pet supply stores had lost approximately $400,000 over a two-year period to thieves who stole merchandise from more than 900 stores in 42 states. Stolen items were returned with fraudulent sales receipts to different stores. The thefts began in the Northeast, but impacted most stores in the chain. ORC specialists and the Las Vegas Police Department conducted moving surveillance to gather the final evidence needed for prosecution and arrest two suspects with $2,700 worth of merchandise. The retail investigators are working with authorities in the other states to pursue state and federal charges.
THE RETAIL INVESTIGATOR’S ROLE
To investigate ORC effectively, it is increasingly necessary for retail and private investigators to conduct physical surveillance. In the past, retail managers rarely ventured beyond the four walls of a store to gather the intelligence and evidence needed to successfully investigate and dismantle a professional group of ORC suspects and their fencing operation.
Instead, retail loss prevention has traditionally relied on in-store loss prevention agents and anti-theft measures to prevent and deter theft, mostly with the use of Electronic Article Surveillance (EAS) devices. Store-based camera systems are also a common component of a retail theft prevention strategy. The cameras are a tool to observe real time theft activity and or to review theft incidents after the fact, but these professional retail thieves, known as “boosters” are rarely deterred by cameras. They are becoming bolder in carrying out their crimes. They know that store camera placement generally does not provide complete coverage of the store, leaving voids that can be exploited to carry out thefts.
Because law enforcement personnel continue to be understaffed or ill-equipped to investigate ORC activity, it is necessary for retail investigators to gather as much ORC intelligence as possible. Retail crime is generally not considered a high priority when competing with other violent and property crimes for resources.
ORC at its initial stage is a shoplifting, which is usually treated as a misdemeanor or petty crime. The responding beat cop who sees one person with a few stolen items may not recognize that the suspect is just one worker bee from a whole hive of retail thieves. If the theft isn’t identified as organized crime, the officer will issue the offender a citation and send him on his way to continue stealing. It is not uncommon to find a professional booster who has accumulated one or two dozen shoplifting convictions. For him, the punishment of a fine is not a deterrent.
It takes the effort of law enforcement and a willing prosecutor’s office to escalate these misdemeanor and petty offenses to felony level charges. Unfortunately, prosecutors with tremendous caseloads will usually offer plea bargain or diversion programs to offenders to expedite resolution. This allows the offender continuing to operate with apparent impunity.
ORC investigators across the U.S. and abroad share a common challenge of engaging law enforcement to take this crime seriously. Thus, the retail investigator needs to gather, prepare, and present to law enforcement as much evidence as possible that documents the ORC organization from the identification of boosters involved in store level thefts to the identification of buyers of the stolen merchandise. The more intelligence that is gathered and compiled by the retail investigator regarding the ORC organization, the more eager and willing a law enforcement investigator will be to take on a retail case. The key is to show that it is truly “organized crime,” and not the work of individual shoplifters.
Retail investigators operating with a precise skill set to conduct physical surveillance, utilizing up-to-date technology, and operating under a proactive ORC company policy will operate at peak efficiency! The retail investigator operating in that environment can successfully build an ORC case to the level where law enforcement can effect arrests, execute search warrants, or partner with the retail investigator and continue the investigation.
ORC surveillance is a specialized and growing field. The most challenging aspect is to observe the crime of theft while avoiding detection by the suspect or their accomplices.
Boosters rarely target one store, or retailer for theft, but instead hit multiple stores in a day. The surveillant will need to move quickly by vehicle or on foot to keep the professional thieves in view. It’s difficult for the surveillant to avoid detection as the surveillant is being continuously exposed to the suspects throughout the surveillance as the investigator attempts to gather evidence necessary to prove thefts.
Some stores may be adequately equipped with cameras. Observing the thefts from the safety of an office is easy and effective. Unfortunately, many stores do not have full coverage. When there are dead zones, effective surveillance requires having an investigator on the floor to ensure the product concealed by a suspect is not discarded prior to leaving the store. Preferably a group of investigators would rotate through stores as the suspects are committing their thefts, but often there are only a couple of investigators involved in the surveillance and the continued over-exposure of the investigators becomes a real concern.
ORC surveillance is unique and challenging in that the theft of the merchandise by the booster, and the sale of the stolen merchandise must be proven to charge the offenders. In many states the crime is charged as trafficking in stolen property or a similar statute. Not only must the theft be documented, often the items stolen must be unique enough to prove they were stolen from a specific store, by a specific person, on a specific date and time. This can be a challenge when many retailers sell the same items with the same Universal Product Codes (UPCs), or barcodes. In some situations, the investigator can mark the merchandise with an Ultra Violet (UV) pen prior to the theft, thus being able to identify it later if it is recovered. Generally, the elements of a retail theft that must be proven to charge a person with theft include:
The person went to a place that offered goods for sale and knowingly took those goods with the intent to deprive the person of those goods by:
• Removing the goods without paying;
• Charging the price of the goods to a fake person or a real person without permission;
• Paying less than the purchase price by changing, removing, or substituting the price tag;
• Transferring the goods from one container to another; or
• Concealing the goods.
To charge the buyer of stolen property, it must be proven that the buyer has knowledge or should have a reason to believe the property is stolen. This can be difficult to prove.
It should be apparent that the challenge is significant to document this crime from the initial retail theft to the ultimate transfer or sale of the stolen merchandise to the buyer. It is for this reason that ORC has become such a prevalent low-risk, high-reward crime. If any of the elements of this crime progression are absent, the case lacks sufficient evidence for conviction.
The most reliable evidence is that of investigators conducting physical surveillance with video evidence of the crime in progress. Instore cameras are of value, but the video can be challenged by the suspect’s defense attorney due to poor video resolution that produces grainy or blurry images. Thieves often wear hats and glasses to hide their identity.
The ORC investigator will receive initial intelligence about ORC thefts from store managers. The investigator will review after-the-fact video footage of the theft. Depending on the quality of the video, the investigator will attempt to identify the suspects through various channels. To strengthen the case of identification of suspects observed on in-store cameras, retail investigators should attempt to locate and conduct physical surveillance on the suspects in the field. This allows the investigator to positively identify suspects captured on store cameras, as the investigator has observed these suspects in real life. The best-case scenario is that the retail investigator would locate and conduct surveillance on the boosters and document real-time thefts by the suspects.
TOOLS FOR ORC SURVEILLANCE
Surveillance operations usually consist of standard equipment including a camcorder and/or DSLR camera, a small camera for foot surveillance, a monopod or tripod, and binoculars.
Due to the significant challenge of obtaining video evidence while on foot in the retail store, technical equipment can be very helpful and is becoming a solution to an otherwise complex surveillance operation. A WIFI camera such as a GoPro can be concealed in a non-conspicuous item and carried while the investigator is on foot /or strategically placed to record theft activity. The video from a GoPro camera is streamed to a phone or pad device and can be viewed in real-time. Also, the camera can be controlled through the phone or pad. The range of this function depends on the store, but generally an investigator can view and control a camera from twenty to fifty feet away. Even if the video stream drops from the phone, the camera is still recording. The video will come back into view when the camera is in range of the phone or pad.
If an investigator knows what type of merchandise a group or person is targeting for theft, the investigator can get into the store before the suspect and place a camera in the area where the theft is expected to occur. This strategy is very effective in stores that have limited or no cameras in their store, and also minimizes the exposure of the investigator while in the store. Often an item of merchandise is selected from a display and later concealed by the suspect in another area of the store that is remote or contains less customers or employees. Criminals often employ the same methodology to their crime, so learning the theft pattern of a booster in a store can assist in knowing where to place additional cameras when attempting to obtain video evidence of ORC.
Another versatile tool is a WIFI-based camera that can be concealed and placed with relative ease in a store that is being worked by an investigator. The camera requires a power source and a WIFI connection. Because the camera records to a cloud based digital system there is no need for a DVR or card to capture the video. This allows a small camera to record and stream High Definition 1080 video accessible anywhere there is access to the internet.
When moving surveillance leads the investigator to another company’s retail store, most will cooperate with the investigation. They will allow access to their in-store camera system or have someone from their company monitor cameras during surveillance. An investigator will usually know the local ORC investigator for that retailer and can have them call the store and provide the store level loss prevention personnel direction on cooperating. If nothing else, providing the store loss prevention with a description of the suspect(s) can prompt them to monitor and record the suspect’s activities and later provide the video evidence when protocol has been satisfied to release the video to police or the surveillance investigator.
Investigators need to decide for themselves whether to notify store management, employees, or loss prevention personnel of their presence during surveillance while in the store, as it can create complications with the surveillance and could compromise the investigation. Some retailers are resistant to partnering, and won’t provide assistance when blind-sided by a dynamic surveillance that is happening in real time. Sending their own floor level or uniformed security to watch can tip off the thieves that they are under surveillance.
An effective investigative tool in ORC investigation is GPS tracking. The units have become inexpensive to purchase and operate. Their small size permits them to be installed in various items of merchandise. This is an effective strategy when investigation has identified a consistent theft pattern. When the merchandise containing the tracker is stolen, investigators can track the suspects via the merchandise. Since it is stolen, the suspects have no expectation of privacy and a search warrant or court order is not necessary.
Some states also permit private or retail investigators the ability to utilize GPS tracking of suspect vehicles. This is a tool that must be examined at the state level where the case is being worked, as state laws vary on what is permissible. Generally, the retail investigator cannot be in partnership with law enforcement working a specific case and utilize GPS tracking of vehicles, unless law enforcement has obtained search warrants for their use. Thus, investigators must consider the timing of when to partner with law enforcement. Nevertheless, the use of GPS tracking is a tool that should be strongly considered when it can be placed in merchandise or on vehicles, as it can be leveraged significantly to increase the likelihood of a successful case resolution.
Communication during ORC surveillance is crucial. Because of the constant transitioning between stationary, mobile, and foot surveillance, different communication means will be used. Generally a mobile hand-held radio that is repeated off towers, or has a range of at least 3-5 miles should be used. Vehicle radios increase the car-to-car range, but require an outside antenna mount that can be identifiable. Investigators should consider all options that will increase the likelihood of successful communications.
If surveillance involves three or fewer investigators, a three-way cellular call is very effective. In a vehicle equipped with Bluetooth technology, there will be hands free communication and easy phone operation. When an investigator transitions from mobile to foot, the use of a cell phone is a good option if a hand-held radio is being used. A visible Bluetooth device mounted on the ear should be avoided. Instead the investigator should use the ear bud style headphones that come with most phones. The headphones feature a microphone, and sometimes an answering button that makes them an effective means of communicating discreetly. Most phones will transition from a vehicle to foot surveillance while never breaking the cell connection. While on foot surveillance, investigators need to provide updates to investigators who have remained in vehicles. It is also helpful to have a scribe in a vehicle taking notes of the activities investigators are observing on foot.
The same fundamentals of physical surveillance apply to ORC investigations as they do to other investigations, yet the dynamics and pace of the activity will be faster. The surveillance often involves two or more suspects and the use of counter-surveillance is a reality depending on the sophistication level of the organization. South American Theft Groups (SATG) are highly organized and can be a challenge to surveil. They often travel to different retail markets and target hundreds of stores over a few days. By the time an investigator has identified their activity in the market they have moved onto the next city.
While conducting ORC surveillance it is important to blend into the store environment and appear to be a shopper. Investigators need props that fit the retail store in which they are conducting surveillance. In a grocery or department store, that would be a shopping cart or hand-basket. In a shopping mall, the investigator should carry a bag or two from a nearby store.
A male and female team is especially effective when conducting ORC surveillance. Females in general appear more normal in daytime shopping activity; yet male investigators can blend in quite well, as long as the pretext is solid.
The investigator’s ability to change his or her appearance quickly while following a suspect or group from store to store is important. This does not have to be a complicated endeavor. Hats, shirts, and prescription style glasses are a quick means to change one’s appearance. Investigators need not be concerned with changing their appearance unless they believe they have been observed by the suspect(s).
ORC surveillance is one of the most challenging investigations to undertake, yet can be rewarding when a successful resolution is achieved. As ORC activity continues to increase in frequency and scale in the U.S. and abroad, retail investigators will need to reexamine their loss prevention strategy and consider if going on the offensive is part of the solution. Legislation, law enforcement/retail partnerships, and willing prosecutors, are paramount to combating this epidemic on a global scale, yet retail corporations must first and foremost protect their own bottom line. A proactive ORC investigative team, with the ability to conduct physical surveillance to build the case, will go a long way toward getting cases worked by law enforcement, and ultimately put offenders behind bars. This makes it a specialized and growing area of public and private investigation.