▶ 0:17:10Good morning.
▶ 0:17:13The uh the committee uh subcommittee on uh crime and government surveillance is called to order. Without objection, the chair is authorized to declare a recess at any time. We welcome everyone to today's hearing on organized crime. Without I'm going to even though he may not come, Mr. Curry will be permitted to participate in today's hearing for the purpose of questioning witnesses and we'll receive five minutes for that purpose. I thank our Democratic colleagues for working with us to get started at 9 this morning.
▶ 0:17:42I now recognize a gentle woman from Florida to lead us in the pledge of allegiance. Miss Lee to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all.
▶ 0:18:07Thank you. I now recognize myself for an opening statement. I'm pleased to be here at the subcommittee hearing this morning. The business before us today is a hearing titled Protecting Consumers and Businesses, Confronting Organized Retail Crime. Organized retail crime is a growing threat to our retailers and their employees, our law enforcement, and our communities. The crisis is not going away. In fact, it is on the rise. In fact, we we held a hearing on this very topic a little more than two years ago.
▶ 0:18:35Today, we will have the opportunity to see how the crisis has evolved. The rise in organized retail crime and cargo theft is causing businesses to close and is endangering the public. Or it goes beyond simple shop clothing. Organized theft groups strategically steal with a specific intent to resell for profit. Let's look at a recent example that occurred just a few miles from where we sit today.
▶ 0:18:58In March 2025, authorities in Virginia and Maryland arrested two adults and a teenager responsible for allegedly stealing over $190,000 in a series of organized retail robberies, including $50,000 taken in Fairfax County. The suspects first stole perfume, and when Ulta secured it behind glass, they allegedly began smashing the cases with a hammer to access the products.
▶ 0:19:22For larger OTGs, ORIc is another business in a portfolio that may also include narcotics distribution, human trafficking, and other illicit activities. In the United States, in 2023, Walmart lost $6.5 billion in revenue due to theft and was forced to close 11 stores in 2024 due to the severity of theft across the country. But ORC victims are not only big box stores.
▶ 0:19:47Eight and 10 retailers have said the violence and aggression associated with ORC incidents increased in the past year. Additionally, ORC groups have increasingly engaged in cargo theft, targeting the trucking and railroad industries as lucrative new sources of stolen goods. According to the American Trucking Associations, that's ATA, cargo theft has cost the US trucking industry approximately 7 billion per year. Rogue prosecutors and soft on crime policies in some jurisdictions are fueling a rise in ORC.
▶ 0:20:17Criminals emboldened by soft on crime prosecutions and progressive bail reform laws know that they can avoid prosecution incarceration if they stay below the felony threshold. Thus, criminals intentionally steal products valued just below the dollar amount required for the crime to become a felony, knowing that those crimes are not prosecuted. Furthermore, with some states passing irresponsible progressive bail reform laws, these criminals know that they will be immediately released. Once they are released, they go on to commit similar or more serious crimes without facing any consequences.
▶ 0:20:48It's time we fight back. Organized retail crime must be stopped. Criminals must be penalized, and shoppers and retail employees must not live in fear. I want to give some key statistics and impacts. Cargo theft cost the trucking industry $18 million per day. That's about $7 billion annually.
▶ 0:21:05Retail theft is estimated at $45 billion in 2024 and is projected to exceed 53 billion by Nationwide job losses attributed to OC more than 650,000. Merchandise thefts, shoplifting is up 19% in the past year, on top of a 24% increase in 2022 and 2023. External shoplifting incidents are up 18%. Over overall merchandise theft up 12%.
▶ 0:21:3651% of retailers report thieves are more aggressive in the past year after 73% report increase in the prior year. 70% of retailers saw increases in phone scams, 55% in digital e-commerce fraud, 50% in cargo supply chain theft tied to ORC. 66% of retailers report transnational ORC involvement since 2024. And as someone who lives in Arizona, I can tell you transnational theft is a big issue.
▶ 0:22:06I look forward to hearing from our uh top flight uh list uh witnesses today, our panel of witnesses today, and I'm grateful for them being here, grateful to you in the audience who are here, and grateful to each member of the committee who is here and our staff as well. With that, um, I yield back on my opening statement and, um, and now moving on to the next thing.
▶ 0:22:33Yeah. Oh, we got Mr. Yeah, Mr. Cohen.
▶ 0:22:37Yeah, I recognize I recognize my friend from Tennessee, Mr. Cohen, for his opening statement. Thank you, Mr. Chair. I am sitting in for Miss Lucy McBath, who's a good friend and an outstanding member from Atlanta, Georgia. She's unfortunately or fortunately she's there to help her husband through a surgery and she asked me to to come in. Uh I'm no not necessarily known for great activity at 9:00 in the morning but for Mr. McFath I'm here. So thank you. Uh and I'm honored to be here with Mr.
▶ 0:23:04Nells a hawk on law enforcement against retail crime. Yeah. Thank you. Organized retail crime is a very real problem and occurs in every corner of our country. When I was young, and I don't think it necessarily has anything to do with religion, but my grandmother told me buy wholesale. So, we're concerned about wholesale crime, too. It's out there.
▶ 0:23:32Uh, I've discussed our situation with Steve Moy, who's our Shelby County District Attorney. I don't know if he's met you, Mr. Stefan, but he's a district attorney in Shelby County. And we shared examples of recent cases. how state lines affect law enforcement. Arkansas, we're the corner, south west corner of Tennessee. So to the west is Arkansas and to the south is Mississippi.
▶ 0:23:57Um the other two part corners of our city, our county We're a major transportation logistics hub and we have related cargo and freight theft. Um, one of our senators, Marcia Blackburn, is introducing a bill uh with Senator Amy Clolobachar called the Cargo Security Innovation Act, and I plan to support that with her uh because that'll be a way to go after the theft that we've had on railroads, which is a serious problem.
▶ 0:24:25They take car the trains and take the car uh cargo out and they also hit trucks. So, that's important. This all threatens the safety of the public and employees of the myriad companies that are targeted and drives up costs for consumers. So, at a time when everyone is feeling the affordability crunch for many of the American dreams being pushed further away, it's being stolen from them. We don't need to talk about hoaxes or anecdotes as I'm sure you we all of us here have relatable stories that we can share and we need to talk about solutions which we'll do today.
▶ 0:24:56It's always best to start with data. That's how we ensure we identify and tackle the problem with a solution that works. This is one of the difficult parts of the conversation though. The data is incomplete and bogged down by different definitions and ways of counting. So we know we have a problem, but his extent and implications are somewhat unclear. It touches on a fundamental principle of American government, federalism, and I imagine district attorney Stefan will discuss that. U we feel this acutely in Memphis because of our location.
▶ 0:25:23Uh the president created the crime in Memphis task force which was designed to surge federal law enforcement resources in Memphis and improve coordination across agencies. I support the additional FBI uh DEA and AFT agents that have come into Memphis because we already had them in Memphis and they're finding guns and illegal guns. They're finding drugs and they're finding other crimes that are against federal law.
▶ 0:25:50But he also put the National Guard in and he put a lot of some ICE agents in. Um Memphis is not a immigration center of crimes and most of the people that are there that are immigrants even if they did come into the country illegally most of them are working legally and doing a lot of important work in Memphis and construction industry, the tourism industry. U and they're necessary and needed.
▶ 0:26:15Uh heck, when we build that 990 person ballroom, we're going to need They're going to all be in El Salvador, so we need to be concerned about that. National Guard basically just they are present and patrol is important in law enforcement, but they're not doing much in the way of crime fighting, and that's what's intended, I think. Um and so somewhat changed the relationship in federal, state, and local law enforcement. The order is focused on street and violent crime.
▶ 0:26:44Memphis has had too much and it's gone down. It went down before the federal task force came in, but it's gone down even a little bit more. Uh we don't know exactly what street crime is, but we know when we say we're going to go in with ICE and take out the people that committed the most serious offenses, the the worst of the worst, and we mentioned crime as homicide, we mentioned rape, we mentioned u pedophiles. uh uh we know who who those people are, but they're arresting people simply for the offense of being in the country illegally.
▶ 0:27:14It's not right, but it's not necessarily something that should cause deportation when they are not committing crimes and they are contributing to the economy. So, that's a concern we have. the US marshals are are in charge of the um situation in Memphis and we understand that and that's they're doing a good job.
▶ 0:27:37Uh when we all of this is to say when developing policies to address organized retail crime they must be well designed with thoughtful resources allocation and roles and responsibilities. Federal assistance is good, but especially on interstate problems, but on local strictly local problems, we need to be concerned about the separation of powers. Uh that's the question I hope we'll get into and understand is the place for federal law enforcement and the place for state and local law enforcement.
▶ 0:28:06With that, I yield back my
▶ 0:28:08Gentlemen yields back. I now recognize the ranking member of the full committee, Mr. Raskin, for his opening
▶ 0:28:14Thank you very much, Mr. Chairman, thanks to all the witnesses for coming to be with us today. Uh, in recent years, retailers have emphasized that organized retail crime has become a significant threat both to public safety and the retail economy, threatening the viability of businesses like cargo brokers, shippers, big box stores, and online marketplaces, as well as the physical safety of people who work at these uh different businesses.
▶ 0:28:41Although we lack one clear definition of organized retail crime, we know what the essential problem is now. Continuing criminal enterprises that operate in a coordinated way to commit large-scale theft of merchandise for resale or to defraud retailers and convert the proceeds into cash or crypto currency. This is not uh petty shoplifting by middle school students.
▶ 0:29:05It's a multibillion dollar industry that evolves and adapts almost daily to the latest technological trends, security improvements, and modified business operations. Social media and local news reports are filled with videos of smash and grabs and mobs raiding cargo containers. These accounts are shocking, but they are the tip of the iceberg. Criminal networks recruit people to steal or boost spec specified merchandise from retailers.
▶ 0:29:34Sometimes paying the boosters travel expenses, then fence these stolen goods online, shipping them across state and sometimes national borders and arranging for resale the merchandise to other stores or even then or even returning them to the retailer that they had stolen from in the first place. Others steal hundreds of gift cards from retailers.
▶ 0:29:53They then peel off the label to obtain the unique code on each card before doctoring them up to look new, returning them back to the store shelves and using customized software to track the card numbers online. When unsuspecting customers eventually purchase the cards and load them with value, $50 or $100 for a nephew's holiday gift or $500 for a wedding present. The thieves can drain all the money off of the cards for themselves remotely in this diabolically clever scam.
▶ 0:30:24The customer only finds out what happened if their disappointed nephew or the newlyweds complain about getting a gift card that has no value on it. It's increasingly clear that these kinds of operations at this scale are coordinated, enabled by uh the most up-to-date technology and communication tools and very hard to stop.
▶ 0:30:42State and local law enforcement are our first line of defense against organized retail crime, but crime, but state and local officials have limited resources and authorities to investigate and prosecute crimes that cross state lines and even international borders.
▶ 0:30:58In recent years, federal agencies have taken some interest in confronting this problem, but federal prosecutors tend to focus their own limited resources on the largest and most brazen schemes, especially those involving theft of large amounts of cargo uh or thefts involving losses and tens of thousands of dollars. Many organized retail theft schemes are too complex for state prosecutors and too modest for federal prosecutors, creating a growing enforcement gap.
▶ 0:31:26As this committee grapples with the problem, I see two basic challenges. First, we need better data. Because retailers, retail organizations, and law enforcement all track, organized retail crime using different definitions and different methods. We've got a hard time canvasing the real scope and dimensions of the problem or formulating an effective targeted response. Some cases, retailers are targeted by the gangs for weeks or even months before it becomes clear that the crime is even taking place.
▶ 0:31:55If we're going to tackle this problem, we need standardized national data utilizing a consistent, widely accepted definition of organized retail crime. We cannot dismantle these criminal networks until we have a real understanding of how they operate and how much damage they're causing. Secondly, we need to see better coordination between federal law enforcement agencies and their state and local counterparts.
▶ 0:32:17a national task force could be very useful in finding the broader patterns in local incidents and conducting complex investigations across state lines. I would hope any such task force would be nimble enough to follow organized retail crime as their methods evolve.
▶ 0:32:342022, Congress passed the Informed Consumers Act to bring more transparency to online transactions on certain platforms, but perpetrators of organized retail crime took note and moved their operations to smaller platforms not covered by the law. A nationwide task force would help us make sure our laws are keeping up with the criminals and ensuring law enforcement at all levels is empowered to counter organized retail crime.
▶ 0:32:58I'm glad that we have a very strong panel here today to share their expert knowledge and experience and to discuss solutions that will better protect employees, consumers, and communities across the country. I thank you, Mr. Chairman. I yield back. Gentleman yields back. Without objection, all other opening statements will be included in the record. We will now introduce today's witnesses. And so, I recognize the gentleman from California, Mr. Isa, for the purpose of introducing uh the Honorable Summer Stefen. Without objection. Thank you, Mr. Chairman.
▶ 0:33:29And and this is truly a great pleasure. Uh I'm there's not enough you can say about Summer's tenure as district attorney. She came uh into an organization that needed help.
▶ 0:33:42She rebuilt it and then fought off those time and time again that tried to undercut her ability to prosecute and keep San Diego a a city that in fact uh had reason one of the safest large cities in America particularly she fought prop fought for Prop 36 and for those who don't know Prop 36 in California we had created a situation at a state level in which there was no crime time
▶ 0:34:12for shoplifting. Effectively, the $900 rule couldn't even be implemented because you couldn't find out how much they were leaving with. That they left with a a case of high-end liquor. You couldn't stop them to find out if there was over $900 of high-end liquor. So, at the end of the day, they didn't just steal $900 10 15 times a day. They in fact may have been stealing more but with impunity.
▶ 0:34:38As many of the others in their opening statements mentioned, there was a gap between the federal and the state. Summer worked very hard with US attorneys of both parties to try to narrow that gap and to get some prosecution. She particularly, unlike many district attorneys, was willing to go to the field.
▶ 0:34:57and whether it's uh dealing with the retailers or going even into homeless uh encampments to see those goods being dumped uh uh in massive amounts after being stolen. She's been there. Her her advocacy made a difference in the outcome of Prop 36.
▶ 0:35:18and since the time of its imple uh its passage, she has prosecuted more than 2,000 repeat felons created a situation in which San Diego is once again a place where retailers can operate and worked with the federal government on organized crime that ultimately is the back end of much of that theft. So, I'm thrilled uh to see my uh my longtime friend and and our ally in San Diego and welcome her.
▶ 0:35:47I yield back.
▶ 0:35:48Sorry. UC request.
▶ 0:35:51Yes. At this moment, I'll recognize uh the ranking member, Mr. Rascin, for UC
▶ 0:35:58Thank you kindly, Mr. Chairman. I ask you C to enter a statement for the record dated today uh December 17th, 2025 from ICSE representing 50,000 North American marketplace professionals including owners and developers of retail centers as well as retail tenants, investors developers. Without objection, thank you. I'll now introduce the rest of the witnesses. Mr.
▶ 0:36:23Scott McBride is the chief global asset protection officer at American Eagle Outfitters, a lifestyle brand and retailer with locations worldwide. In his role, Mr. McBride is responsible for the comprehensive protection of the company's assets across five continents. Mr. Chris Spear is the president and chief executive officer of the American Trucking Association, an organization made up of trucking companies. He also serves on the board of directors for the American Transportation Research Institute and the Trucking Cares Foundation. Mr. Dr.
▶ 0:36:51Shane Bennett is the principal of theft, fraud, and abuse at Target. He previously was the director of assets protection, field investigations for Target, where he led strategy and personnel who addressed the organi addressed organized retail crime. We welcome our witnesses uh and thank you for appearing today. Will you each stand so we can swear you in? Please raise your right hand.
▶ 0:37:17Do you each of you swear or affirm under penalty of perjury that the testimony you are about to give is true and correct to the best of your knowledge, information, and belief. So help you Let the record reflect the witness witnesses have answered in the affirmative. You may be seated. Thank you. I want you to know that your written testimony will be entered into the record in its entirety. Accordingly, we're asking you to summarize your testimony in five minutes.
▶ 0:37:42And um you'll if you get close you'll hear this at first and then if you get really long you'll you'll hear a a whack with a gavvel to to remind you that time is expired. And uh I'll remind you I'll try to remind each of you to turn on your microphone when you speak. But um we'll now recognize um Mr. Bennett for his five minute opening statement. Chairman Biggs, Ranking Member Cohen, and esteemed members of the subcommittee.
▶ 0:38:12Thank you for the opportunity to address the committee today on a very pressing issue. My name is Shane Bennett, and I have nearly 40 years of experience in assets protection and fraud prevention. Currently, I lead retail crime strategy for Target Corporation's fraud and abuse team focused on largescale organized retail crime or OC. Target is a great American company with more than 400,000 team members and 2,000 stores all here in the US.
▶ 0:38:40Over my career, I've worked in stores, in the field as an OC investigator, and in my current role in fraud and abuse. I have witnessed firsthand how dangerous and highly coordinated OC has become and the impact it has had on both consumers and This isn't about the casual shoplifter. Organized retail crime is far more advanced. No single state or retailer can see the full picture.
▶ 0:39:06Retail crime enterprises deliberately operate across jurisdictions to evade detection and This makes it very difficult for state and local agencies to investigate their activities without the help of federal partners. The Combating Organized Retail Crime Act or Corka would help bridge that gap. The impact on consumers, your constituents, is significant.
▶ 0:39:30These criminal enterprises contribute to lower product availability on shelves, increased safety risk for both our team members and guests, and disrupts supply chains, and ultimately fuels widespread financial fraud, which funds criminal activities impacting our communities. More recently, gift card scams have surged, and I'm certainly that many of your constituents have been or know a victim.
▶ 0:39:56The Department of Homeland Security estimated more than $1 billion in fraud losses over the past two years. And a 2022 AARP study found that one out of every three Americans have either experienced gift card fraud themselves or know someone who has. This issue becomes even more urgent during the holiday season when gift card purchases spike as people turn to them as easy last minute gifts.
▶ 0:40:23Although there are several fraud vectors involving gift cards targeting consumers and businesses, one example is gift card Criminals steal inactive gift cards off of retail shelves, tamper with the card by copying the activation data, then reseal them before putting them back on store shelves. Once an unsuspecting shopper loads money out of that cart at checkout, fraudsters use sophisticated methods to detect the balance and drain the funds.
▶ 0:40:52Ultimately, profits funding criminal At Target, we've built a multi-layered prevention model to combat this fraud. This includes real-time analytics, increased training and education for our team members, and an industry-leading innovation like our decoupled gift card technology. This helps prevent fraud activation and protects our guests and your constituents from being targeted by Retailers cannot combat gift card fraud alone.
▶ 0:41:22We work closely with partners through the gift card fraud prevention alliance, educating consumers, sharing data, and identifying interstate trends. Additionally, our partnerships with federal agencies are essential. For example, Target and industry partners coordinate with federal law enforcement through Project Red Hook, an initiative with Homeland Security Investigations.
▶ 0:41:43This collaboration chases uh this collaboration traces illicit financial flows, identifies transnational fraud networks, and disrupts organized retail crime operations that span multiple states. In the past two years, there have been 232 arrests with asset seizures totaling approximately $8 This partnership shows that we can dismantle criminal groups.
▶ 0:42:10The Combating Organized Retail Crime Act would strengthen and expand the model by providing tools needed to disrupt the sophisticated criminal networks and protect consumers. Target along with the entire retail community strongly supports Corka, urges Congress to pass this bipartisan legislation quickly. Thank you for your leadership on this issue and I look forward to your
▶ 0:42:32Thank you and we appreciate your testimony. Now I recognize uh District Attorney Stefen for her fiveminut opening statement. Thank you, Chairman Biggs, Ranking Member uh Cohen, and Ranking Member uh Rascin, members of the subcommittee for this opportunity to speak before you.
▶ 0:42:54Um I am before you as a 35-y year prosecutor for the record that's longer than I've been alive, not a prosecutor, and I rose through the ranks to become the elected district attorney for San Diego County. For perspective, San Diego County is the fifth largest county in the United States. I have the honor of serving 3.3 million people that uh call San Diego home.
▶ 0:43:18Uh I'm also the chairwoman of the National District Attorneys Association, one of the oldest prosecutor associations in the nation. Uh a few years ago we saw that organized retail theft was not what it used to be. That it was highly organized, highly sophisticated, and to keep up with it, we needed to get organized.
▶ 0:43:42So I formed within my office an organized retail theft task force and worked with our police departments on combating uh this crime. With that, we've had great success. Uh I believe that we may be uh the office that has prosecuted more organized retail theft.
▶ 0:44:04Uh in three years, we've brought 336 defendants who were responsible for organized retail theft to justice uh with losses to stores of $3,28,000. But this is just the tip of the iceberg.
▶ 0:44:22And I think one of the reasons that I am uh so grateful for the work of this committee is because despite all the resources where I've put this task force and the number of people we've prosecuted, we have not been able to get past the booster level. That's the people who are conducting the theft.
▶ 0:44:44And then uh in many cases where we were able to build through uh search warrants, cell phone evidence, uh capturing camera evidence, were able to go up the chain to the fence level.
▶ 0:44:59But we recognize very quickly that we cannot get through as a county prosecutor to the level of the organized criminals that are pulling the strings and that are responsible for reselling the products or shipping them overseas to never be found again. I'm going to give you an example of a case that we did recently that I think really illustrates this point.
▶ 0:45:26Um, we had a very sophisticated heist at a chain jewelry store. They targeted Rolex watches and within a couple of days as we were putting the case together, we were able to make some arrests and discovered that the Rolex watches were all already shipped overseas.
▶ 0:45:51But I think what really made me more passionate about the fact that this needs to be a whole nation effort is because we discovered that the same crew was also responsible for the same type of thing in the state of Washington.
▶ 0:46:09But we had no alert system or a data bank of federal, state, locals to address and to get an alert that they might be coming for us because we have a very um you know fancy store just like the one in Washington.
▶ 0:46:27That's just one example, but we've had many cases, especially in the crews that target commercial and uh home burglaries that we've discovered have committed a chain of those across the United States. And when we got them, we were able to get the group, but we were not able to recover the product nor to get up to the chain, the international and national chain that's involved.
▶ 0:46:56I also want to tell you that another thing about being on the ground is that this is such a victim centered crime. the when we prosecuted the Ulta store $700,000 heist looking in the eyes of those young workers that expected to have a safe place to work and found out that they're you know they couldn't even look at the thieves because they would look at them like what are you looking at
▶ 0:47:26you can't do anything about it um that really made it clear that we need a national data bank so that we can really go after this sophisticated crime, these criminals, and protect our employees and our community. Thank you very much for this opportunity.
▶ 0:47:46Thank you. Thank Thank you. And now we recognize Mr. Spear for his five minutes of testimony. Chairman Bixs, Congressman Cohen, and subcommittee members, thank you for the opportunity to testify about the rapid rise in cargo theft and the threat that it poses to our economy as well as our national security. For over 90 years, the American Trucking Associations has represented an industry that now employs 8.4 million of the hardest working men and women in the country.
▶ 0:48:15Today, these Americans are on the front lines of an escalating crisis, and they need backup from Congress. Brazen thieves are robbing our industry to the tune of $18 million a day. Motor carriers not only have to replace stolen products, but shoulder higher insurance premiums and invest in new security measures. These added expenses put jobs and businesses at risk. And those elevated costs for fleets are felt by consumers at the store.
▶ 0:48:46Plainly, there is a direct connection to rampant cargo theft and what Americans are paying at grocery stores. Across the supply chain, cargo theft is estimated to cost up to $ 35 billion annually. This is money that belongs in consumers wallets, not criminals pockets. There are two categories of cargo theft. Straight theft and strategic theft. Straight theft has been around since trucks have been on the road a century ago.
▶ 0:49:16It involves the physical theft of cargo from a distribution center or the back of a truck. Crews will stalk tractor trailers and strike when they are stopped at a rest area or even a traffic light, putting truck drivers and other essential supply chain workers directly in harm's way. In Arizona, police recently arrested several individuals who had stolen six figures worth of energy drinks.
▶ 0:49:40They were later linked to a $3 million heist of In Georgia, four men were recently convicted for multiple thefts of electronics, copper, and apparel totaling more than $1.7 million across the entire Southeast. These incidents are happening in every state and in every district. In contrast, strategic theft involves the use of advanced cyber tactics to trick shippers, brokers, and carriers to divert and hand over their loads.
▶ 0:50:11This high-tech form of cargo theft has become a digital renaissance for thieves, surging 1,500% since 2021. Over 90% of fleets are small businesses operating 10 trucks or fewer. Yet they are forced to compete in an arms race trying to match the formidable technological capabilities of sophisticated criminals who are often based overseas.
▶ 0:50:37The transnational aspect of cargo theft also makes it a national security issue. The proceeds from stolen goods finance other criminal activities including drug trafficking, organized crime, and even potentially terrorism. Just one example, a shipment of high-end refrigerators was stolen from one of our Memphis, Tennessee members in St. Louis. The local police filed a report but declined to investigate further.
▶ 0:51:04Several months later, the ATF stumbled across the refrigerators when they raided a warehouse. They were being stuffed with US drug profits before being sent back across the southern border. What the local police dismissed as a simple insurance matter turned out to be a pivotal piece of a Mexican cartel's Trucking is interstate by nature, which means the thieves targeting the cargo we haul are interstate as well.
▶ 0:51:33State and local law enforcement often lack the resources and the jurisdiction to adequately investigate crossborder crimes. This is clearly a federal Only the US government is equipped with the capability and the constitutional authority to pursue criminals across state and international lines. For these reasons, ATA strongly supports the enactment of the Combating Organized Retail and Crime Act.
▶ 0:52:00This legislation would provide law enforcement with the tools and enhanced legal frameworks to combat this highly complex national and international threat. Rather than ignoring what our economy needs, Corka would centralize data and coordination, federal, state, local, and industry, and proactively unravel schemes orchestrated by transnational crimes. The theft of cargo is a nationwide problem, and it requires a national solution.
▶ 0:52:28By bringing the fight to organize theft groups, Corka would help safeguard Americans work in our supply chain and it would protect national security. Thank you. you and I look forward to answering your questions.
▶ 0:52:41Thank you. Next chair next recognizes Mr. McBride for his five minutes opening
▶ 0:52:48Chairman Biggs, Congressman Cohen and esteemed members of the committee. Thank you for the opportunity to address the critical issue of organized retail crime. OC is not new. What is new is the veracity, sophistication, frequency, and geographic reach that has escalated dramatically in the last 5 years.
▶ 0:53:08These criminal networks exploit the internet and encrypted messaging apps to recruit thieves, coordinate consolidation of stolen goods, and liquidate them through illicit online marketplaces or black market sites. They even exfiltrate exfiltrate stolen products out of the country. retailers have invested in new technologies and provided clear insights to the scope of these thefts.
▶ 0:53:36timestamping video evidence, pinpointing locations of the missing items, and enhanced collaboration with law enforcement. Despite our efforts, the problem continues to grow. OC is far more than simple shoplifting. It represents a sophisticated criminal network and enterprises, perpetrating massive thefts and escalating violence against our associates and customers.
▶ 0:54:01These groups cross jurisdictional lines to avoid prosecution, deploy professional style tactics to fuel their nefarious operations, include reverse logistics, illicit liquidation, financial crimes and They repeatedly victimize retail stores of all sizes from the mall to the strip center to the big box and Main Street and from home improvement to grocery to apparel and sporting goods.
▶ 0:54:31They interrupt the normal shopping experience for our customers, demoralize our associates, and disrupt our supply chains. The rise in retail theft and violence is highlighted in the NRF's annual impact of violence and theft report. This year, DA this year's data reveals that retailers have experienced a 19% increase in merchandise thefts over the past year, compounding on the reported 24% increase from 22 and 23.
▶ 0:54:57And on violence, 51% of retailers report thieves are more aggressive this year than the following 73 and in addition to the 73% increase from last year. Instore theft is only one aspect of organized retail crime. Groups have become more sophisticated in both method and tactic. Over the past year, 70% of retailers have reported increases in phone scams. 55% increased their digital and e-commerce fraud.
▶ 0:55:25and over 50% saw increases in cargo theft. Criminal groups utilize military style tactics, counter surveillance to commit cargo thefts on railroads, complex deception tactics to obtain gift and cyber criminals active activities to steal freight across the supply chain.
▶ 0:55:49Consider one of my most recent cases where Homeland Security investigations worked alongside state and local police to investigate and interdict a consolidation and exfiltration scheme. Stolen apparel was being prepared to be packed into sealand container destined to cross the Texas border into Mexico.
▶ 0:56:09With the assistance of corporate investigators, HSI recovered approximately 2,000 pairs of American Eagle jeans, retail value of $100,000 inside of nearly $2 million in other RFID research revealed my items were stolen from 35 stores across 13 states within the past four weeks of that time. The group was let was tied to a group out of Houston and Katy, Texas that are linked to transnational criminal organizations in Mexico.
▶ 0:56:43example is when 35 I'm sorry a further example is when 20 stolen vehicles arrive with more than 40 individuals suddenly converging on a suburban mall armed with implements of destruction ranging from tire irons to firearms that endanger customers and threaten staff to commit theft. This was a coordinated attack with premeditated and a determination to plunder and escape.
▶ 0:57:13The stolen items were not necessities. This group operated under the direction of a larger entity which means with means to mobilize and monetize their illicit gains. In conclusion, the combating or organized retail crime act corka is an essential missing layer. It would establish a cargo theft and retail crime coordination center bringing together federal, state, and local law enforcement with private sector experts to share vital information.
▶ 0:57:44As a professional dedicated to pre protecting consumers and associates, I implore all members of Congress to work together to ensure the combating organized retail act is urgently becomes law. Thank you for pro providing me this opportunity to testify. I look forward to answering your questions.
▶ 0:58:02Thank Thank you. And um I recognize myself now to enter a UC. We have a letter from the National Association of Convenient Stores um um about this issue and about this topic. So I'll admit that into the record without objection. Now I recognize the gentleman from North Carolina, Mr. Not for his five minutes.
▶ 0:58:24Thank you, Mr. Chairman. Thank you for holding this important hearing. uh to the the witnesses who were here. I look forward to this conversation. We are uh very excited to to have this hearing because it addresses a very real problem. It addresses just one more area of American life that organized crime is really uh striking at the heart.
▶ 0:58:45And when you step back and look at the effect of organized crime for a variety of reasons, including unchecked migration uh from people all over the world coming to this country, some of whom are coming with bad intent. You look at weak law enforcement policies, anti-law enforcement policies, you know, you look at former drug dealers are now cartel operatives. You look at uh former welfare cheats are now international fraudsters. Uh old neighborhood brawls have turned into war zones, gun battles.
▶ 0:59:14You look at um local gangs are now being replaced with international crime syndicates and that extension has certainly gone into retail crime. Many of you have mentioned that already. And in my experience in law enforcement, of all of those particular types of crime, most Americans are least familiar with organized retail crime. Even though organized retail crime affects arguably every single American the most.
▶ 0:59:42By some estimates, I've seen that the direct cost for organized retail theft is over $100 billion a year in this country. It's growing. The indirect costs are many multiples higher than that. And in regards to my observations as a former often when you observed a petty crime, an individual crime, it was one spoke in a much larger wheel. And to that uh extent, Miss Stefan, I want to start with you.
▶ 1:00:10A lot of people who are questioning this bill uh have a fear that it is going to take away local law enforcement's ability to fight this crime. As a former federal prosecutor, I used to work with local law enforcement to attack crime. Please tell us why federal assistance in t in tackling organized retail theft is needed uh from a district attorney's perspective.
▶ 1:00:35Thank you for that question. Absolutely. There's a role for state prosecutors like I've talked about, but there's a role for federal prosecutors. One great example of how you can split and conquer and make your community safe is an elder justice task force where we were able to take uh a a real action against these scammers that are going after our elderly.
▶ 1:01:02We could only again get to the people that were showing up at the doorstep of our elderly and prosecute them. But by teaming up in a task force that included the US attorney, we were able the the federal government was able to do a recall action. You know what that is? Has a lot of power to bring the higherups of these terrible scammers that are abusing our seniors. I envision the same thing for retail theft.
▶ 1:01:30Organized retail crime does not stop at your jurisdictional boundary, does it?
▶ 1:01:34None at all.
▶ 1:01:35And in regards to the crimes I mentioned, gangs, drugs, violent criminals, fraudsters, there is a federal forum for those criminals.
▶ 1:01:43Absolutely. It's a logical extension. Why would we not have a federal forum for uh organized retail thieves?
▶ 1:01:51These criminals travel across county lines and state lines and international lines. So the only way that you can defeat a big monster like that is to come together and leverage our individual power set to take care of our
▶ 1:02:07So it's safe to say it would be a partnership, not a replacement from the federal law enforcement.
▶ 1:02:11Absolutely. I don't plan on being
▶ 1:02:13Great. I hope. Yes, ma'am. [laughter]
▶ 1:02:16Mr. McBride, I want to talk to you briefly. You talked about the levels of sophistication of these international crime syndicates. Can you describe who these people are uh and what type of mechanisms they utilize to further their criminal activity?
▶ 1:02:31Thank you for the question, Congressman.
▶ 1:02:33I cannot speak to exactly who they are. That is more of a question for HSI and law enforcement agency, but have ties or
▶ 1:02:40In your experience, what have you? In my experience, we know that Xfiltration schemes um and we're getting a clearer and clearer picture because of uh data that we are able to collect on our own product um that is showing there is a highly sophisticated levels of roles and responsibilities within these organizations. Some people do not leave the state.
▶ 1:03:00They commit the crime, but they are working for someone that is outside the state or even outside the country who might be a shot caller that is developing this mechanism and is employing and I say that loosely as a term employing them to do these crimes at different levels for different jobs. Whether it's the boosting, the muing of moving the product, cleaning it and consolidating it, re-shipping it to a central location, and then the exfiltration. And it's safe to say this is not just an interstate issue. It's an international issue.
▶ 1:03:30It is transnational polycriminal organizations are the ones that are really calling the shots here.
▶ 1:03:35Gentleman's time is expired. Thank you. I yield back. Thank you, Mr. Chair.
▶ 1:03:37Thank you. Chair now recognizes the gentleman from Tennessee, Mr. Cohen.
▶ 1:03:40Thank you, sir. I want to follow up with Mr. KN's question. I'm going to start with Director District Attorney Stefen, Daryl's friend. Uh, does this does this deter if his car um theft devices does that help your situation?
▶ 1:03:56They can't get into the cars with his devices on them, can they?
▶ 1:04:00Well, innovations like that have been very helpful in auto theft. That's
▶ 1:04:04Daryl's fighting crime.
▶ 1:04:05Pardon me?
▶ 1:04:06Daryl's fighting crime as we speak.
▶ 1:04:10She speaks.
▶ 1:04:10As you speak, right, let me see. Mr. McBride couldn't give us any names. Mr. KN wanted some names. I'd like some who who are we talking about in drugs? We know it's El Chapo and and El and Pablo Escobar and blah blah blah. U who is it in this situation? Who are the big names? Do we get any of them ever?
▶ 1:04:28Um well, we we we know some names. Yes. Um, we know that, for example, when it comes to these what I talked about, the commercial burglaries and the home burglary crews, those we've been able to identify um to a group that is is abusing what's called an ESTA visa that's coming from a variety of countries um and they're coming in and then getting
▶ 1:04:58replaced and another group comes in and just follows through with what they've been doing. So, that has been identified. Um,
▶ 1:05:07can you tell us the names? I mean, are they are they are they big crime syndicates or are they just just
▶ 1:05:16Well, I you know, the the I think it's big crime because it's affecting a lot of people uh victims in my community. Um, I I go by what the, you know, the federal government is what does the designations and and I know that the FBI designated them as a U crossnational uh,
▶ 1:05:39transational crime group.
▶ 1:05:41San Diego is different than Memphis and Kansas City. You're on the international
▶ 1:05:45Are are cities in the interior of the United States getting the same type of crimes? Are they people from outside the country that are doing this I'm see bobbing heads in the crowd. Do you bob too?
▶ 1:05:57Uh, from the people that we've captured in in these uh commercial and residential burglary crews, they have hit multiple states. Uh, and so I don't think that they're traveling from state to state very easily.
▶ 1:06:12I can't tell you if they're in in your state, but we've, you know, we've had cases where they have Arizona, they've got uh state of Washington, they've got Colorado, we've had several of the sophisticated crews that have come uh across multiple country. And how do we know it's when we arrest them and we download their phones using a proper search warrant, we're able to track their communication, their movements.
▶ 1:06:39They usually rent cars in different locations and start over. So, this is very sophisticated. It's not like the fentinel where I can tell you exactly where it's coming from and who's producing it. Um, it's much more uh distributed. But I think my answer to you would be this that without a database, we are not going to be able to connect the dots. And that's in the Corga bill that there would be
▶ 1:07:07exactly and in the Corka bill section 17 um numerous six it talks specifically about that part of what it's going to uncover is connections with intersections with other criminal activity like potentially elder scams like uh human traffs anyway but it's just like is there an alapone out There is there's some big criminal type that's
▶ 1:07:38in charge of this whole deal.
▶ 1:07:39Not that I know of, but what I do know is we haven't done enough to get the answer and we won't get the answer without a task force.
▶ 1:07:48Congressman, I can only speak to following our product and our product is being exfiltrated across the Texas border into Mexico. Our product is being interdicted in the port of Long Beach headed for Colombia, South America. Um, we've also uh been involved in investigations with HSI on container shipments out of the port of New Jersey. So, those products are being loaded onto a container.
▶ 1:08:12That container is being manifested to leave the country, and all of the product in it is stolen from multiple retailers, mine included, inside of those containers. We've recovered many of them. Some have slipped through and not been able to be stopped. Um, so from a transnational perspective, there are kingpins out there. I do not know their names. I'm not privy to that law enforcement side. There's probably confidential information that's not being shared with the retailers.
▶ 1:08:39We need to talk to the FBI and Cash Patel. This should be his area of jurisdiction. Is that correct?
▶ 1:08:43Gentleman's time is expired.
▶ 1:08:45You may answer the question, Mr. I believe that it is a federal issue and that we need national link analysis and HSI has been the most helpful so far and we would expect that they would be able to lead this charge. The FBI is certainly involved as a partner along with other federal agencies.
▶ 1:09:01Thank you sir. Chair now recognizes the gentle lady from Florida, Miss Lee for 5
▶ 1:09:07Thank you, Mr. Chairman, for holding this important hearing and thank you to all of our witnesses for being here with us today. You have highlighted something that is so important for us in Congress to recognize and that is that the threat of organized retail crime has grown exponentially and today we are seeing such sophisticated schemes involving fraud, impersonation and also cyber related tactics and that necessitates
▶ 1:09:37in many ways a federal coordinated response. In my home state of Florida, we have seen an increase in cargo theft and it's impacting freight hubs all over our state. The increasing sophistication of these criminal networks highlights that need for greater federal law enforcement support. And so, Mr. Spear, I would like to go back to you and your testimony.
▶ 1:10:04One of the things that you noted is that there is in some state and local law enforcement uh areas a lack of resources and jurisdiction and uh you noted that this was clearly a federal responsibility. I would like to hear a bit more from you about that lack of resources and jurisdiction, how it is affecting crime prevention in this way.
▶ 1:10:28uh and also the advanced cyber tactics that are being used to disrupt uh in in our cargo transport and also the safe containment of these uh retail products.
▶ 1:10:41Thank you, Congresswoman. Yes, I'd be happy to. Uh trucking obviously operates in all 50 states, every congressional district. So, we see the panoramic, you know, view of the nation. Moving freight state to state is a daily experience for us. But we worked with state law enforcement. We work with local law enforcement. The problem with this is that you're obviously moving from one point to another. This freight can get taken at any point in time in any state. Uh it's it's that sporadic.
▶ 1:11:12And so obviously we'll work with local law enforcement if they're the first on the scene, state law enforcement. Uh but that freight can obviously be in another state before we can even figure out that it was taken. So the speed of of our response, the ability to share information quickly.
▶ 1:11:31Federal databases could be a harbature for that could really understand the broader ramifications, not just about where the freight could be headed in different states, but you know, also other links and organizations that might be responsible for it. Local and state law enforcement aren't going to have that ability to see stateto state, see federal. That panoramic view is the missing piece of the puzzle. Okay, we're working just fine local and state.
▶ 1:11:55It's it's getting the national fabric, that interstate fabric into the puzzle to make it complete and actually be able to go after these criminal organizations effectively with the speed that we need uh to tackle the problem. The transnational criminal organizations that is an international element that's the strategic theft I was speaking to. These groups are operating out of Eastern Europe, Russia, South Africa, China. These are places that if you have a laptop, you have access to a process, a system.
▶ 1:12:26You can go into a bill of laden and redirect freight as it's in motion. We've had members that the driver thinks it's legitimate. It's the company's system that's telling them to redirect, drop the freight to a dummy site. That freight's long gone before they even figure out that it was taken. That's going to require multiple states being, you know, part of a federal fabric to be able to understand where that threat's coming from and how to prevent it.
▶ 1:12:52State local governments do not have that capability to attack transnational organizations. That is a federal responsibility. It's the missing piece of the puzzle. If you put it in under Corka, then you really have a full solution to tackling this problem
▶ 1:13:07And Mr. Bennett, I'd like to go back to you on this subject. I know that you uh also work a lot in digital and cyber defense in your position. So would you please comment on the the the organized retail crime is no longer limited to instore theft. Uh you touched on a couple of these other digital consequences things that are happening. What are you working on?
▶ 1:13:32what are you seeing from a cyber defenses perspective and how technology is being used to help uh promote and and perpetrate these
▶ 1:13:43Representative Lee, thank you very much for the question. Uh from my perspective, the work that we do on our team, this is a really important element. Um, from a technology perspective, um, advanced analytics, identifying patterns of behavior, all of these things are critically important. I'm sure everyone on the panel has received a text message that says you didn't pay you need to pay a a a fee or a fine, an easy pass.
▶ 1:14:14At first glance, that doesn't seem like organized retail crime. You might not connect it to organized retail retail crime, but that's a fraudster fishing information from you that ultimately is going to turn into some sort of laundering activity in large part in the retail environment. So, those are examples of how consumers see OC and they don't realize it and it might look like an individual issue, but it is connected to a much larger uh scheme and scam.
▶ 1:14:44I know I mentioned our gift card early on
▶ 1:14:48um and we could talk about that.
▶ 1:14:49Yeah, thank you. The timing's expired. Thank you.
▶ 1:14:51Thank you.
▶ 1:14:52Recognizes the gentleman from Texas, Mr.
▶ 1:14:56Thank you, Mr. Chairman. Uh thank you all for being here. I uh as a former sheriff for Fort Ben County, Texas in law enforcement for 30 years. Back in 27 2018 already, we were experiencing organized crime uh in the greater Houston area. We arrested several individuals uh from Venezuela coming in creating you know committing many many burglaries, residential burglaries. We had them coming in from Honduras and everywhere else.
▶ 1:15:24Um and and I believe that uh that many of these burglars would come into our country, you know, having been deported previously several times for previous crimes. And me personally, I believe what you guys are experiencing right now and the increase in crime is because of our southern border and that poor southern border over the past several years.
▶ 1:15:50Would would you agree uh if I just go down the line, would you agree that our policies at the southern border have contributed to this chaos we see in organized theft, retail theft across our country? Just a yes or no.
▶ 1:16:04I can't answer that. Um
▶ 1:16:05okay, then we'll go to the next Mr. Bennett. Yes or no? The view that we often have in retail is limited. So I can't really answer that.
▶ 1:16:16We move 76% of the USMCA freight. So yeah, it's definitely an issue. Um we're moving target.
▶ 1:16:23Yeah, you highlighted the fact that they were with the was you the one talked about the refrigerators.
▶ 1:16:28That's correct. And they were going back across that's correct.
▶ 1:16:30Milwauke Mexico and everybody else. How about you, Mr. McRock?
▶ 1:16:33We I do not have any data that would lead me to be able to say yes or no. Well, I think the average person that has served in law enforcement for all the years, you're seeing what Trendiago was doing, and I'm assuming that they're probably involved with some of this. But just my experience as a sheriff, I think over the past several years, our southern border policies has not has contributed to this chaos. Uh whether it's in just retail theft, just part one crimes, everything. I mean, assaults, all of it as a result of our southern border. And I'm going to make a prediction.
▶ 1:17:01You've seen an increase in crime over you I mean, the numbers are safe. You said that they over the past several years these crimes become Do you believe that with our position now at the southern border with Donald J. Trump, are you optimistic that we're going to see a reduction in some of this organized retail crime as a result of our position at the southern border with with just not letting anybody in anymore? Just yes or no? Ma'am,
▶ 1:17:26I can tell you definitively when it comes to uh drugs and fentinel, yes. I cannot tell you with regard to retail assuming retail theft will probably help them with their drug addiction.
▶ 1:17:38My perspective would be that we need the support from the federal government to help solve this issue.
▶ 1:17:45Besides this bill, Corkcol have the piece of the puzzle that we need to combat it not just domestically but internationally. My position is that organized retail crime is recruiting and has recruited more than um we know across all states and that Corka is the only way that we're going to get visibility to this type of crime in this crime scheme.
▶ 1:18:07Well, again, through my experience uh as a sheriff and in arresting some of these bad ombres knowing that after we've arrested them, they've been deported four, five, six times for some of the same damn crimes they've committed before we've arrested, but they keep coming back. I I'll just say this, Mr. Bennett. the federal government is getting involved because Donald J. Trump has secured the southern border. He secured the southern border. So the way you reduce, you know, all of this recidivism is keep them out of our country, right? Keep them out.
▶ 1:18:36And I think uh I support the idea of a task force, by the way, Mr. Chairman. I think it's a great idea. But I believe that we're going to come back, maybe have a hearing another year or so, and I think you're going to have a better uh a better attitude about this because I think that the southern border is a serious serious issue. And now that it's been solved by keeping the bad ombres out, you're gonna you're help is on its way is what I'm saying. I yield back.
▶ 1:18:59Gentleman yields back. I recognize the gentleman from Wisconsin, Mr. Tiffany.
▶ 1:19:03Thank you, Mr. Chairman. Mr. Bennett, um the leading home improvement retailer in the Midwest. Um they gave me an example of um theft that's happened in their stores. Does this sound plausible? The numbers are really staggering. 2022, husband and wife teams steal over $33,000 worth of goods. They've stolen a half a million dollars um from other retailers.
▶ 1:19:2519 different teams of Romani suspects, some people refer or some people refer to them as gypsies across the Midwest stealing electrical breakers. $165,000. Eight different 2024, eight different suspects committing theft via credit card to the tune of $224,000 at 46 locations. A total of 107 individual police reports. Only three have been arrested.
▶ 1:19:522025, 209 separate instances of re rental equipment theft, 128 different stores, $350,000 loss. Is this plausible?
▶ 1:20:06Representative Tiffany, thank you for the question. Um, I'm not familiar with all of those cases obviously at a partner retailer, but certainly it is plausible. I mean, $165,000 of electrical breakers, what the heck are they doing with them?
▶ 1:20:22Well, I can speak to uh my space here in fraud. I can tell you that there are numbers of consumers that are victimized. Um I've worked cases where we've had 38, you know, victims from 38 different states all linked to one investigation. So, these sort of complex structured activities are certainly uh certainly plausible.
▶ 1:20:45Uh Mr. Spear. Um, I'm going to follow up on Mr. Nell's questioning here. Um, so you you think about the southern border. I mean, doesn't it make sense if we are being diligent as a federal government on our southern border about who's coming in and out of the country that um some of these bad actors are transnational. Is that
▶ 1:21:10That is correct. And the best way to access this is often times the southern border. Correct.
▶ 1:21:17It's a contributing factor.
▶ 1:21:19Doesn't it just make sense then that by securing the southern border for this particular issue that it's going to be
▶ 1:21:28There's no qu there's no no uh question about that. I think the southern border is certainly an element to it, but it's a very complex problem. It's not just the southern border. It's legit, no doubt. But this is happening electronically. The strategic theft that I spoke about, that's the 1500% rise since 2021. So again, if you have a laptop, you can access and a lot of these groups want to fly under the radar. I mean, I understand Congressman Cohen's question about names. I wouldn't focus on names.
▶ 1:21:58I'd focus on numbers. This is vast volume of of freight being stolen electronically and redirected and a lot of it's getting shipped out of the country. So this goes way beyond hit and run [clears throat] type of theft, the straight theft that we have seen in over a hundred years with trucks. This is very complex digitally driven renaissance. This is really sophisticated stuff and a lot of it's being handled out of Eastern Europe.
▶ 1:22:26I was just over a meeting with the European Parliament educating them on the problem in their backyard and they were oblivious. They had absolutely no idea that a lot of the theft that is occurring here in the United States is originating in their backyard and there needs to be an element a federal element that coordinates that states localities do not coordinate with Interpol. That is a federal responsibility between DHS, DOJ, and DOT.
▶ 1:22:51Bringing them into the puzzle, completing that fabric, and being able to to coordinate the broader implication beyond the southern border is really what we're looking for.
▶ 1:23:01So, you're talking about all elements need to work together, right? Because Mr. Cohen um or no, Mr. Raskin commented about this is not your average shoplifter. So, um there are some prosecutors are going to have to up u up their game, right? And I'm not referring to you. Mr. Ice had um um gave a glowing uh review of of the work that you've done, district attorney, but uh isn't it correct that prosecutors need to do their job also? Is that correct?
▶ 1:23:28Absolutely. I I think it's just all the pieces have to work. Nobody's trying to take jurisdiction from the others. It's just fulfilling those parts and pieces. Sharing information is step one. You've got to be able to understand beyond one state where the cargo is moving. Is it the origin where it where it originated? Is it in motion? Or is it the destination? That could that couldvas multiple states? Who do you file it with? Where does it go? That depository is really needed.
▶ 1:23:55I want to get one final question in for Mr. McBride. Which state policies targeting organized crime in your opinion have been effective? What state policies have been effective?
▶ 1:24:06Gentleman's time is expired, but you may answer, Mr. McBride.
▶ 1:24:10Yes, Congressman. So, thank you for the question and I um there are multiple states that have enacted organized retail crime laws and those are being very very effective within those states. The challenge is we need that national level link analysis and coordination center to be able to tie those together. Thank you,
▶ 1:24:29gentlemen. The time is expired. I now recognize gentleman from Alabama, Mr. Moore, for his five minutes.
▶ 1:24:34Hey, thank you, Mr. Chairman. Uh Mr. McBride. Um, have there been changes in the types of merchandise targeted by criminals uh in OC?
▶ 1:24:42So, every single retailer, thank you for the question, Congressman. Uh, every single retailer has a key set of products that are being targeted by the organized retail crime groups. In my case, it is denim. It is jeans from American Eagle Outfitters. It is the highly lucrative u most expensive item that we sell on a regular basis. Other retailers have their own products that are being targeted.
▶ 1:25:05Uh there were some photographs in the hearing room earlier of those products that are being recovered on a daily basis from law enforcement agencies at the local state levels all over the country.
▶ 1:25:17Can you explain how certain policies have led to an increase in OC? So in the postcoavid era did you feel
▶ 1:25:25Yeah. In the postcoid era the organized retail crime groups took the time to retool and they have used the internet encrypted apps to recruit um known associates. They've uh used leverage techniques and social engineering to gain the upper hand on on folks within the on citizens within the United States to do the dirty work at the lowest levels. They are sometimes minors. They are recruited. They are expendable to those organizations.
▶ 1:25:54They they will roll up the next one to commit those crimes. But they have a multi-level organized set of command structure that they use to boost move consolidate clean because they'll remove tickets, they'll remove sensor uh anti- theft devices.
▶ 1:26:13They will throw away any GPS trackers that we insert inside this cargo to try to be able to get eyes on the movements and then they will uh exfiltrate that product out of the country.
▶ 1:26:25Are the jeans being lifted off the shelves or how's that happening when you say they just they're coming into the stores themselves?
▶ 1:26:31Correct, Congressman. So, in the retail stores, they are being boosted by what we call boosters, right? They come in and commit mass thefts. They may come in and overwhelm a staff in a store that may only have a few associates working. They use intimidation tactics to try to come back and revictimize the same locations over and over again because it's easier for them. We are also experiencing cargo theft. We have some of our shipments interdicted.
▶ 1:26:56We have uh as my fellow witness stated uh trucks that are broken into at truck stops uh at red lights in the mall parking lot. They will be removed.
▶ 1:27:07Mr. fear. I I I remember like we were in the trucking business growing up and I was in New York one night. We were in the sleeper asleep and uh we the truck started shaking and all of a sudden we go back and they've cut the lock and they're stealing out the back of the truck. But now it sounds like it's almost and it's a technological advantage for the criminal element, right? So how does that how do they reroute this? Is that something they're doing with the GPS system or how are they sending these trucks? Are do they look official and then they send them an email and say, "Hey, you're going here." How does that happen?
▶ 1:27:35Yeah, hackers will get into the systems uh bill of ladens. They can see actually the most expensive cargo. That's what's different here. It's not just a hit or run and we roll the dice that we get something valuable. They know what's in the truck. It could be pharmaceuticals. It could be munitions. It could be a whole host of things that we don't want criminals to even know is in the truck. You can see that when you get into the system. And they double broker. They work with brokers. They are a facade. They're they're going as a legitimate motor carrier, but they're a front.
▶ 1:28:05They're a false front. And they intervene in that process as the broker is handling the freight from the shipper to the motor carrier. They pose as a false carrier
▶ 1:28:14So, will they take it to a dock or a warehouse somewhere normally or?
▶ 1:28:17Yeah, it it'll move in generally multiple states. Um, you know, it it these are products that often end up going overseas. Energy drinks, they're banned in multiple countries. Didn't know that. Actually,
▶ 1:28:28it's like cursor's beer used to be banned and and and the smoking the bandit, they would move them east in the state. But
▶ 1:28:34growing up in Wyoming, I can understand you know all about that.
▶ 1:28:36Yes, I do. Um, you know, energy drinks, they put them on the black market in these banned countries. It's a very sophisticated crime. It's not just the hitandrun type of crime that we're familiar with for the last hundred years. This is, you know, a a a very criminal activity that's done overseas, well abroad.
▶ 1:28:56Yeah. I was uh in New York that night. They stole shrimp out of our reefer unit. But you know, the thing was they didn't know what was in it. I'm amazed now that they actually get the bill of bladen and know what they're stealing. Uh Mr. Bennett, uh one last question here. Um do you think soft on crime policies affect the safety of your employees and customers inside Target
▶ 1:29:17Um you know, my my experience is that uh we have seen violence in our in our stores. Um and and I think that uh um crime in our communities is problematic and uh you know what is most important to us at Target is protecting our teams and our guests and uh uh we certainly focus on that from a strategy
▶ 1:29:47Gentleman yields back. Chair recognizes a gentleman from California, Mr. Kylie for his five minutes. Thank you, Mr. Speaker. Uh, in California, we have had probably the worst retail crime uh problem in in the country. Uh, you know, you go to our major cities, uh, most of the things in basic convenience stores are behind lock and key. Uh and uh the cause of this is uh probably three-fold. A lack of resources for police.
▶ 1:30:13Uh some uh rogue district attorneys like George Gascon uh in LA who fortunately has been uh removed by the voters. Uh and then uh very weak laws when it comes to punishing uh retail theft. Things got so bad we have a witness from Target here today uh that last year our governor Gavin Newsome was visiting a Target when a a thief thief absconded with a variety of merchandise.
▶ 1:30:36Uh, and the governor starts berating one of the target employees, saying, "Why aren't you stopping them?" And apparently the employee didn't recognize who she was talking to and said, "Well, we can't because of the governor." Uh, despite this, uh, the governor himself opposed an initiative that I was part of last year uh, to actually restore some real consequences uh, for retail theft in California. Uh, it eventually became known as as Prop 36. uh the governor led the opposition uh against it.
▶ 1:31:06Uh the state's uh political class uh closed ranks in opposing Proposition 36. And yet at the end of the day, it passed with 68% of the vote. It passed in every single one of California's 58 counties, even uh Governor Nuome's uh San Francisco. It got more votes than any other uh measure on the ballot, showing just how fed up the people of California are uh with the the rampant uh lawlessness that is proving such a threat to business and to uh to safety.
▶ 1:31:37Uh so I we have a district attorney with us today uh district attorney uh 7. I know that you were a supporter or at least have uh are grateful for the passage of Prop 36. Can you uh just let us know how it's improved the ability uh of your office to actually hold criminals accountable and to deter
▶ 1:31:54And thank you, Representative Kylie, for your help with this proposition. It has been a gamecher for us. Uh we've been able to prosecute it targets, as you know, habitual offenders. It doesn't target the kid who makes a mistake. Uh but with targeting the habitual offenders, um San Diego has already seen a 23% reduction in property crimes.
▶ 1:32:18It still doesn't get to that highlevel uh organized criminals that we need this legislation, the Corka legislation for, but it certainly has given us the tools to act. And of course, something that I worked on for a whole year alongside you and other leaders.
▶ 1:32:36That's right. the DA's association really led the charge on that. So, thank you for uh for all of your your work on it and for what you're doing now. And we certainly need uh these measures at the federal level to supplement uh those new consequences. Uh just out of curiosity, if you could have your wish as to any other changes that we could work for uh in California to make uh your office better able to uh to protect the people of San Diego. Anything come to mind?
▶ 1:33:00Well, I for now my wish is for the Corka bill that the National Days Association supports and I support. I think that we don't know what we don't know. And by having a database, you will learn information, connect the dots, and be able to go after organized crime. There's really no other way to do it.
▶ 1:33:22Great. Well, thanks very much. And uh we have made crime illegal again, as we say now in California with his initiative. We still have a long way to go, but we've seen real improvement in no small part because of dedicated prosecutors like yourselves. Thanks very much. I yield back.
▶ 1:33:35Will you yield to Mr. Not for
▶ 1:33:37I'd be happy to. Yes,
▶ 1:33:38I love it. Thank you. Uh, Mr. Kylie, I want to be sure we we're clarifying something here. There's a lot of talk about names, organizations, and so forth. And in my experience as a prosecutor, you have a local incident like a drug seizure. Then you have a repeat local incident, the same seizure, the same person. there's a search warrant of a device or a car and international contacts are discovered. You go up the chain and you realize this is part of a much larger operation. It's not every stop.
▶ 1:34:05It's not every seizure, but when you uncover a an an international organization with a more sophisticated wheel, you have a forum in federal law enforcement to hand that case over to. That's where I receive the cases. And we're talking about whether it's drugs, whether it's firearms, whether it's human trafficking. There is a forum when those incidents occur. There's not that forum for retail theft and the retail theft is occurring over and over and over with impunity.
▶ 1:34:34Uh I just wanted to clarify that. And is that consistent with what you've uh experienced, Madam DA?
▶ 1:34:39That's absolutely the right description. So we have that. We have a forum for fentinel where we handle some cases. The feds handle international cases. We have it for um scams. We have it for gang violence. We do not have it for something that is ripping off the places that are the heartbeat of America. Small businesses and large businesses.
▶ 1:35:03That's right. And it's literally one more point, Mr. Chairman. It's literally I would get a a notebook
▶ 1:35:09of a case summary that said this started local and now it's clearly international and then I would work with local law enforcement to prosecute that case. You can't do that with retail theft. We need to fix that.
▶ 1:35:20That's right.
▶ 1:35:21Thank Thank you, Mr. Nutton. Those are great points and appreciate them. And so I recognize myself for for five minutes. So this this kind of reminds me of the um uh idea in America that there was no such thing as the mafia, if you remember that. Uh hard to believe, but we went into the 70s.
▶ 1:35:45the movie The Godfather uh was required to remove the term Kosanostra or mafia from it uh by Joe Colombo who was the head of the New York crime families, one of the one of the five families. And so this kind of reminds me of that because none of us know who the kingpin is.
▶ 1:36:05We know that that it involves international uh manipulation and we know and suspect that in my opinion I suspect that uh you also have some south south of the border cartel activity as well directing this because I live in Arizona and we see evidence of this. So, this is a big thing that's happening and it's and it's spreading and it's growing.
▶ 1:36:28And even though uh I'm certain that that south of the border cartels are involved, I'm also just as certain that um there are other international kingpins that we have got to to reach out that are in China, Asia, Russia uh Russia, and Europe.
▶ 1:36:46So, I'm I just want to report that uh not too many months ago, I took a tour of my local Walmart, big super Walmart place, you know, I've been to the Target, too, but I didn't take the tour there, but I just, you know, I've been to Target, too. So, and what did we find is is they said, "Come, let us show you the aisle from which we've had to take uh uh really decisive action because it is the aisle from which most of our stuff was getting ripped off. It is the Lego aisle.
▶ 1:37:16Everything's I mean that's hard to believe but nonetheless um that's they were stealing it and they were they were doing it exactly what you were saying. They're ripping off a whole like what you were describing with jeans that somebody's coming in they're boosting a whole bunch getting it out there uh overwhelming the staff and moving it on on some marketplace uh extraneous marketplace. So uh there's a definite need to to resolve some of this uh this issue.
▶ 1:37:44I'm going to ask you a question in a second, Mr. Spear, but I want to say that that one of the things that has to happen at the federal level besides uh you know the this this national law that you're looking for, which is Corka, is you're going to have the the feds have got to do southbound operations on the border. We do northbound operations endlessly and we send people back and that's why you're seeing the slowdown. But we don't do southbound operations very often.
▶ 1:38:12And those south that dirt, that void allows uh truckloads of various items to go south of the border without ever being detected because we just don't have the personnel nor the the strategy to uh to interdict going south. So, southbound operations is going to have to step up if we're going to really close this thing down. Mr. Speaker, I wanted to ask you a question with regard to your your testimony on page 10 of your testimony.
▶ 1:38:40Um, I'm I'm trying to figure out your tables, tables eight and tables nine.
▶ 1:38:45Um, I want you to explain those to us and then I also want to talk about the large trucking companies versus the smaller or uh 10 units below trucking companies because I'm wondering um if is there a distinction? Are the big companies sharing the ripoffs as much as the smaller companies are?
▶ 1:39:04Yeah. Uh if you look at page 10 of the written testimony, table eight, table 9, table eight is is centered on motor carriers. So these are actual uh trucking companies that are are are moving the product. Um and these are the states where we're witnessing the most activity uh year-over-year. So uh as you can see, there's a lot of states in here that are their ports. Um we also have several that are that are inside the US, but also have access to riverways like Tennessee.
▶ 1:39:31So, um, you know, it's the type of cargo. It's usually occurring in larger cities, areas where there's ports, where there's ways that you can move, uh, very quickly. Um, but that that's the motor carrier chart. And then if you go into table nine, uh, that is the logistic service provider chart. This is the strategic theft that I was speaking about.
▶ 1:39:52This is the the brokers, the third party uh uh folks that handle intervene that handle the shipments uh on behalf of the shipper, the motor carrier. They're the broker. And this is where the electronic element comes in. Masking is a motor carrier or a false business obtains the the cargo and is able to move it state-tostate, even abroad. This is where we're seeing the 1500% surge since 2021.
▶ 1:40:20This is the escalating type of crime that's not just southern border, it's it's around the world. And the access through a laptop is the catalyst for doing that. So, if you look at these states, um you're also seeing a a a pretty similar pattern to what you see for motor carriers. Uh but this is where we're really seeing the surge of of cargo theft.
▶ 1:40:40And and is there any distinction between large trucking companies, particularly in the logistics portion, the the hijacking of the technology? Yeah, I mean some of our largest members have experienced it in various ways. Um and they have more interaction with other modes. Uh so with rail for instance who are also listed uh in the 90 plus you know supply chain sponsors uh supporting corkc um they have a lot of interaction interotal interaction uh with other modes as well.
▶ 1:41:10So there's a lot of connectivity and they're going to have a lot more robust systems to see what's happening and track it. They also have a lot more technology uh in the in the trucks as well as the trailers to track that cargo. If you get down to to 10 trucks or less operations, they're not going to have the wherewithal to to combat this, let alone the ability to who do I call? Do I call it where the cargo originated, where it's headed, or where the crime occurred? Who do I call beyond state and local law enforcement?
▶ 1:41:39There's no centerpiece to coordinate that. There's no sharing. There's no understanding. That's the missing piece of the puzzle that I think will bring in more capability for the 10 trucks or less businesses and we don't want to see those folks go under. They're very important to local communities. They're doing the hard work dayto-day. They're just as important as as the largest members of ATA. So, and you obviously that's a direct interaction too with truck drivers. We we really do care about their safety as well.
▶ 1:42:07So, being able to train up and have that capability, we want that to happen across all members, large and small. So giving them that capability I think would be a huge step up and we believe Corka does that.
▶ 1:42:18Thank you and I appreciate each member of our panel uh and your testimony and your statement that is written and incorporated into the record. We appreciate it. This is a uh an important topic to us and um uh as I spoke to I think all of you beforehand that this is necessary before you can even begin to move or mark up the bill.
▶ 1:42:41So, uh, we've been called to votes, but I'm going I I'm going to yield about 30 seconds max to my friend from North Carolina who's just itching to ask another question. So, uh, Mr. Spear, just briefly, is there anything we can do besides the criminal enforcement to assist in protecting the marketplace from these sophisticated scams?
▶ 1:43:03Yeah, I think the the enhanced enforcement, federal, state, local, and working with us, we have to invest in this. We've got to train our employees just as much. That's all important. It's multiple pieces at the same time. What's missing is the federal. So the enforcement piece is important, but I think better information sharing is really, really critical. We talked about that. Uh deputy district attorney talked about that in terms of other states and being able to see the broader, bigger picture. That's where you're going to see some of the bigger names and maybe who's behind this.
▶ 1:43:32Like I said, a lot of these folks want to stay low on the radar. They don't want to be tracked.
▶ 1:43:36Yeah. The best criminals are the hardest to catch.
▶ 1:43:37That's exactly right. And you're seeing them grow exponentially. So we think the the information, the reporting, the ability to harbor that information is going to really really help federal, state, local as well as our industry understand the bigger problem, connect the dots faster. Again, this is all about speed. It's being able to act quickly and understand that you get this extra piece of the puzzle in there. I will be in a better place to do that.
▶ 1:44:00Thank you so much. Thank you, Mr. Kn. Thank you, members of the panel. Everyone will have five days to uh ask additional questions or submit statements for the record. With that we are adjourned. Thank you.