Larry O’Neal to Sponsor Organized Retail Crime Bill

Representative Larry O’Neal, Chairman of the Ways and Means Committee has agreed to sponsor a bill aimed at reducing losses from organized retail crime (ORC) in the 2008 session. Due to lost tax revenue related to ORC, the bill makes O’Neal a logical and powerful sponsor of the legislation. O’Neal, a lawyer and a C.P.A., clearly understands the contribution that retail establishments have to the state’s economy and the impact that ORC has in reducing retailers’ bottom lines and the states tax revenue as well.

According to GRA President John Heavener, Chairman O’Neal understands that organized retail crime is more than a harmless property crime. He understands that U.S. retailers and suppliers must expend tremendous efforts to battle crime and loss. Current statutes, sentencing guidelines and investigative efforts are inadequate to the scope, scale and impact of the problem.

The Chairman concurs with GRA that the current statutes and sentencing guidelines are inadequate. Billions of dollars worth of goods are taken from manufacturers, distribution centers, transport trucks and stores, converted to store credit, or sold through a combination of websites, street fences, small shops, flea markets, diverters and newspaper ads, then shipped overseas. Stolen or tainted goods are even re-packaged and sold along with first quality goods back to retailers by dishonest wholesalers and diverters endangering the elderly and infirm.

In many cases, local fences that buy and sell stolen goods serve as crime centers using ill-gotten cash hordes to promote drug abuse, fraud scams, robbery, rampant shoplifting or boosting, and even sending money to terrorist groups. ORC is not just about pilferage or shoplifting. It is a large, dangerous, and expensive drain on the US economy.

Ongoing criminal enterprises annually cost victimized businesses and American taxpayers billions of dollars in lost capital, revenues, operating costs and critical tax revenues. It is estimated that Georgia retailers lose $882 million per year from organized retail theft gangs, and that the state loses over $35 million in related revenue annually.

According to the National Retail Federation’s (NRF) third annual Organized Retail Crime survey, more than three-fourths of retailers (79%) said their company has been a victim of organized retail crime within the past year. The survey also found that 71 percent of retailers say they have noticed an increase in organized retail theft activity in the past 12 months, up dramatically from 48 percent in 2006.  

Indicating the rise in awareness of the issue, 57 percent of retailers said their company’s top management understands the issue, compared to only 41 percent in 2006. Additionally, companies are committed to fighting the problem, with one in ten retailers spending more than $1 million dollars each year to fight and prevent organized retail crime.

The huge costs generated by ORC raise prices for the average consumer. ORC schemes destroy product and retailer brand credibility, contaminate medications and foodstuffs by dilution, changing expiration dates and contents, movement through unsanitary or infected areas, as well as creating violence, endangering innocent retail employees, customers and drivers. Manufacturers, retailers and consumers lose when highly stolen items are locked up for protection so they cannot be readily purchased. Legitimate retailers with razor thin profit margins must compete against ORC groups or networks that have stolen their goods and have no cost of goods. Additionally, ORC can injure a business, or so damage its reputation, sometimes to the point where the organization will have to lay off employees and otherwise limit operations. Some stores are forced to close due to very heavy theft activity - depriving local residents of safe, close by shopping locations.
 
ORC also funds trafficking of guns, illegal immigration, and terrorist groups as well as extensive official and police corruption.

In order to disrupt illicit markets and criminals, it is critical to update statutes and sentencing guidelines. ORC criminals must realize they will be caught and sentenced. Since ORC methods vary so widely and continue to adapt to evolving opportunities, a vital part of improving anti-ORC operations is updating and strengthening state laws.