Transcripts For CSPAN2 Law 20240705

Subcommittee on a rise of organized retail crime. Discuss how criminal networks are recruiting people online and on the black market encourage congress to pass new legislation to help address the issue. [background noises] [background noises] committee on Homeland Security subcommittee and counterterror and Law Enforcement intelligence will come to order. Without objection subcommittee may recess at any point. The purpose of this hearing is to evaluate the unprecedented uptick in organized retail crime in the United States and to hear testimony from key witnesses from federal government and private industry. I doubt recognize myself for an Opening Statement. That afternoon. We welcome you to todays important hearing on organized retail crime threats to our public safety. The topic of todays hearing is the issue of organized retail crime. Which has been rising throughout the country demonstrating a threat to tens of thousands of retailers of all sizes and subjecting employees and customers to reale harm. As Many Americans flock to stores to complete their Holiday Shopping this christmas season, Large Organizations of professional shoplifters are exploiting soft on crime policies to ransack american businesses. And to carry out an unprecedented spike in retail crime are generally organized retail crime involves association of two or more persons engage in illegally obtaining merchandise of value for retail establishment. As part of the criminal enterprise. This is not the same thing as shoplifting or petty theft of both of which are always the illegal. This type of organized activity involves multiple and inspire across various stores and state jurisdictions furthert complicated matters which Law Enforcement agencies to combat these crimes. We also have reports Transnational Criminal Organizations were tcos are taken advantage of open borders are also engaging in retail theft. Its important to note criminals do not show any bias when selecting targets in this crime occurs across a wide spectrum from big cities to small towns in both urban and also rural areas. Retail crime is overblown impacting every one of our districts as many have seen retails are over typing challenges posed by the criminal clactivity. They are taking steps to ensure the safetyim of their staff, customers, products this includes measures like placing common items like detergent and baby formula behind antitheft plexiglas utilizing smart shopping carts equipped with automatically locking wheels too prevent thieves from exiting the stores with the Court Without paying. In a washington d. C. Progressive City Councils implement a soft on crime legislation its embolden criminals to run a ramp it through the district. One cvs has displaying tissue paper rolls of toilet paper as the photographs not the actual product but photographs to prevent theft. In situations like this wheat must look at the Immediate Impact on families and consumers. This right here directly drives away a mother looking to buy diapers and formula at her Neighborhood Store or a family looking to quickly grab overthecounter medicine for theirr loved ones. These chaotic calculated robberies not only pose a risk to employees, customers and store owners but there is a multifaceted domino effect on our communities as well as the workload that occurs on Law Enforcement. Theao National Retail federation which will be participating in the second panel today surveyed over 230 retail Asset Protection professionals and found that 90 indicated organized retailfe cre is more of a risk to Retail Businesses now than it was just three yearsrs ago. Businesses of all size and all locations from Big Box Stores like home depot, macys, gap, walmart, target, cvs, walgreens and many others to mom and pop shops at my hometown of texas are all worried about these Alarming Trends are sounding the alarm on the rise of criminal activity tied to them. In addition to widespread theft they have turned deadly last week Security Guard at a macys in philadelphia, pennsylvania was fatally stabbed by a man attempting to steal merchandise. A second Security Guard was also injured. According to reports the suspect was later arrested has a history of retail theft of a robbery and drug offensive across the philadelphia region. Moreover at this macys location alone they filed over 250 reports of retail theft in a year. Then, last or to home depot in hillsboro, North Carolina elderly employee of home depot was assaulted by a man attempting to steal power washers. According to reports was two years old make 82 years old was finally shoved her and the attempted theft and later died of his injuries. Sadly these incidents are not isolated similar tragedies have occurred across the country. Notwithstanding the violence is tied to organized retail crime has resulted in damage to storefronts and other properties weve seen on the news in many locations. Organized retail crime is also responsible for financial losses to retailers. As a result Closing Stores in certain locations was also quite the negative impact on those communities they serve and kills jobs for thousands of americans. According to a report by the Retail Industry Leaders Association on the impact of organized retail crime nearly 70 billion worth of goodsat was stolen for american retailers on a microlevel walmart as stated the severity of largescale theft and other factors have led walmart to close several stores and is raising prices affected nationwide. Reports also indicate walmart will open a workspace eight recent drastic measure aimed at mitigating criminal activities. T target recently announced to e closing in nine Stores New York San Francisco customer safety from violent ties to organized retail crime. Part ofci the challenge in addressing organized retail crime includes the theft to participate in organized retail crime criminals often a pill for items below the threshold for felony charges. Recognizing such offenses are typically not subject to prosecution in certain jurisdictions. Ta criminals also know they will be released under certain built reform laws. Upon release criminals proceed to engage ing similar or more severe criminal activities without encountering any consequences. I look forward to him from San Diego County districtin attorney summer stefan will also be the next president of the National District Attorney Association on the Important Role prosecutors play in the safety of our communities. Including address and the challenge of organized retail crime. I also look for to this hearing is an opportunity for bipartisanship for us to come together and hopefully agree that we do have a real issue here and if so what can we be doing at this level . The surgeon retail theft is more than teenagers looking for a thrill. Its an abusive soft on crime policies and evidence of a deeper rooted issue driving crime and fear amongst our communities. We have a distinguished panel of witnesses testifying too and including federal panel of witnesses to examine efforts to combat the rising trend organized retail crime. Will also have my second panel of witnesses from industry and State Government about their perspective on the serious challenge. I like to thank all the witnesses with us this afternoon and i look forward to the discussion. I now recognize the Ranking Member at my friend from rhode island for his Opening Statement. Thank you chairman. For working with us to call the hearing on organized retail crime. Many of us have heard from retail is concerned by organized retail crime and so todays hearing for us to explore the scope of the problem and determine best how to respond. Crime over all continues to be at historically low levels has fallen even more in recent years according to the fbi between 1993 and 2022 the Violent Crime rate across the United States has fallen by more than half homicides following 35 robberies falling 76 . Burglars falling 78 . The trend continues to the date. Violent crime decreased to further 2 in 2022 compared to the previous year. E however we must always strive to do better to ensure all americans are safe in their homes, their schools, and their neighborhoods. We have heard reports of organized retail crime becoming more prevalent which leads us to todays hearing. We all need to understand the nature of organized retail crime and the best practices for ending it. I want to be clear what we are talking about here. We are not talking but ordinary shoplifting committed by individuals working alone. We arecr talking a large organid groups then engage in systematic theft of retail goods the subsequent resale of stolen goods for financial gain. Organized retail crime does not just impact large retailers, it also affects momandpop shops and especially retail employees. And beyond the important concerns about safety these crimes also raise costs for american consumers. Every time a store is robbed of products its a higher and more security windows are installed new Security Systems. Some of those costs are inevitably going to be passed on to shoppers. It is important we get to the root ofha the problem of organid retail crime to keep people safe and lower costs for everyone across thesy country. This bipartisan hearing is a chance for us to hear from both Industry Leaders and a retail rd federal Law Enforcement agencies about their efforts to combat organized retail crime. I want to thank our panelists for joining today and look forward to your remarks. And without any objection i like to yield the final two minutes of the Opening Statement to the gentle lady from nevada missed titus been a leader in congress on thiss issue. A gentle lady is recognized for. Thank you, mr. Chairman and thank you Ranking Member for yielding and for holding this hearing. Ive been deeply involved in this for several congresses. It is one of the most talked about issues in my office from business, from Law Enforcement from stakeholders. I witness this myself from me too you in a walgreens in my district. A roundtable with Law Enforcement and business including home depot. I agree with all of this as ive said before that bird by convenience when crying i get caught upp in one of these schemes or operations while they are out there doing this holiday season. In addition this retail crime that is organize has considerable monetary effect on the business and on our communities. Ey inng nevada the organized Retail Crime Association estimates in 2021 Retail Products theft costs our states economy about 82 million. No community is immune from the suburbs to the inner cities from biguc business to Small Business and particularly his trouble in an urbanized Commercial Area like my district in downtown las vegas. Retailers have a strong presence there. They make a large contribution to our local economy and they are targeted. The bills that ive introduced combating organized retail crime is bipartisan. Thirtyseven republicans, 47 democrats and every democrat on the subcommittee is a cosponsor and very proud of that and would to thank them for their support. I know this hearing will help highlight some the increased trends and highlevel organized retail crime. Will underscore the need for federal action investigators and prosecutors to have the tools they need organizations and activities are tied to it behind the scenes that many people dont even realize. Thank you again. Thank you for the time and i look forward to hearing your expert witnesses. I yield back thank you chairman. Thinking Ranking Member other or remind Opening Statements may be submitted for the record. I am pleased had to distinguish panels of witnesses before us today. Its veryy important topic. I ask a first panel please rise and raise your right hand. You solemnly swear the testimony you will give before of Homeland Security the nine states of house of representatives will be the truth, the whole truth and nothing but thehe truth so help you god . You may be seated. Let the record reflect the witnesses have answered in the affirmative. I would now like to formally introduce our first panel. Mr. Michaele certainly serves s a Homeland Security investigations special agent in charge with the new england field often in boston, massachusetts mr. Jason kain currently serves as a special agent in charge of u. S. Secret service National District and finally perez is Deputy Assistant director transnational organized crime Violent Crime Operational Support sections of the fbi criminal Investigative Division. Thank you for joining us today and thank you for your service to this nation. I would now like to recognize the witnesses i know you have written statements we appreciate those if you could summarize that and keep it to five minutes you are now recognize. Chairman, Ranking Member and subcommittee. Thank you for the opportunity to appear before you today to discuss Homeland Security investigations global efforts to combat organized retail crime and organize theft groups is the largest Investigative Agency within the department of Homeland Security. As unique authorities in expansive investigative mandate focus on securing the homeland from transnational crime and threats impacts our national and Economic Security are 6800 special agents are stationed in 253 domestic field offices but 4000 state, local federal tribal Task Force Officers. Specialized post country so the Strategic Focus crimes of exploitation and victimization upholding fairness in global trade and protecting national security. The unlawful Activity Associates organized retail crime intertwines with many of these aforementioned priorities therefore represents an area of our investigative focus. In 2022 retailwi theft was responsible for approximately 72 billion in losses according to the National Retail federation. In response to this to effectively communicate the severity of organize theft groups involved in retail crime and other systemicc thefts. Operation 2. 0 is a multitiered strategy focused on one integration of efforts using enhanced public and private sector partnerships to creating efficiencies of scale in data collectionon and lead dissemination, three, using this information to disrupt and dismantle orc and affiliated organizations and lastly using global reach to engage in a robust Public Awareness campaign to inform and educate consumers and industry on this threat among others. It is widely recognized 21st century criminal networks diversify profitability and influence. No longer tied to a single criminal scheme or enterprise it is not uncommon for organize theft groups to be involved in or affiliated with those networks who perpetrate financial fraud, identity theft, human smuggling and trafficking trade, Money Laundering, narcotics and trafficking among many others. One thing remains constant organize step groups of their illgotten gains. The use of traditional and trade based Money Laundering methods continue at Digital Assets Virtual Currencies can now be used with relative ease and facilitate the immediate movement, concealment and a laundering of illicit proceeds. Recognizing the complexity of illicit finance hsi collaborate with the Association Certified anti monday laundering specialist to publish a guide for Law Enforcement investigators and Financial Crime professionals to help combat orc and ot g. Further, hsi cornerstone outreach interfaces was traditional and nontraditional banking and Financial Institutions to continue our longstanding efforts to educate our partners on emerging financial threats through anti Money Laundering training including typologies of Money Laundering associated with orc. Using infrastructure to support our efforts hsi relies on lead tong bowmans energy according c investigations across the full spectrum of Law Enforcement and private sector partners. This past year received 222 requests from state and local Law Enforcement in addition to private sector partners led to a doubling from the last fiscal year alone. As we continue cyber enabled crimes financial fraud identitys theft complex global trade practices and organized retail crime hsi is wellpositioned to check the threat head on. Thank you again for your support of hsi and for the opportunity to appear before you today i look forward your questions. Thank you. The chair recognizes mr. Kaine for your Opening Statement. And distinguished members of the subcommittee, thank you for inviting me too testify before on the current investigative capabilities and how they may be of help address and the trend of organized retail crime. When the nations original investigative agencies and secret service has been charged with safeguarding the nations Financial System since 1865 this includes conducting criminal investigations to protect the american public, Financial Institutions Critical Infrastructure from criminal expectation. Over time investigations have evolved from traditional and civil war to crimes religion Electronic Fund transfers become popular 1980s. Today we have extensive authorities safeguard financial Payment Systems and criminal exploitations even if those activities are increasingly transnational in nature. Secret service and solicit funds transcript from organizations and illgotten gain secret service has exceptional record of success in disrupting organizations and we are remain committed to keeping pace with technology and innovation and the evolving of cyber criminals. These losses are victim based and selling of personal information via dark web. The aide to secret service and her continued Law Enforcement partnerships last in congress renewed its commit to the National Institute by passing legislation to allow operations to the indo fiscal year 2028. Legislation to strengthen our capabilities of the secret service and our Law Enforcement to combat cyber enabled crime including organized retail crime. When the ongoing efforts must Cyber Task Force is directly funded by congress to provide a working environment to support. Task forces are in 42 offices across the United States. Through them we were close with u. S. Attorneys office and Law Enforcement agencies to ensure our partisan most relevant information criminal trends, tactics used by organized criminal groups. Our well established and trusted relationships with Financial Institutions stemming from herun origins in combating currency affords us the agility with cases and organized retail crime. We are fully engaged in a partners this partnership is essential to accomplishing our mission. Organized retail crime is crime of opportunity criminal to exploit this about the school in cyberspace. Efforts to stay ahead of organizations and their capabilities is paramount to deter future crimes will organized retail crimer is nota traditional errors focus for federal Law Enforcement capable of organize groups to commit theses crimes based on the rept of annual losses of over 100 billion. The focus to the secret service disrupt and deter criminal activities recover funds longer term but worked to ensure those criminal exploit our businesses, our cyber enabled crimes often tytransnational multijurisdictional nature which is why federal assistance in many are not only warranted its essential. Basing the current trench laid organized retail crime i sent the following principles of the should help to form congressional efforts to dress organized retail crime. One is resourcing is essential to lawenforcement ability to effectively detect investigate and arrest those committee elements crimes for this must be constant and consistent not just reactive measure. Prioritize indemnify assets and recover losses. They can enjoy the prophets there be no crime. Continue to strengthen the ability of stakeholders to prevent detect investigate their product federal programs such as secret service. This bill is a collaborative relationships is necessary to address organized retail crime and other cyber neighbor crimes were partnerships p Law Enforcement and the private sector are essential but we often say build trust before you need it. This is vital for Effective Response for Law Enforcement. Lastlyce ensure Legal Authority that can control Law Enforcement activities keep pace with criminal trends. Im honored to represent the dedicated men and women of the secret service here today they worked tirelessly on behalf of the American People continue to maintain her standing some of the worlds premier Law Enforcement organizations. Appreciate your partnership, your guidance and welcome a questions you have. Thank you. Thank you mr. Kaine. The chair now recognizes mr. Perez for your Opening Statement five minutes. Good afternoon franky member and members of the commit its my pleasure to be here today to speak to you on organized retail theft more specifically fbi Major Theft Program. Im Deputy Assistant director criminal Investigative Division under my investigative responsibility ive raised programs including the Violent Crime and the gang approved crimes against childrensp specifically transnational organized crime which includes Major Theft Program. Long a rich history combating organized crime continued dedicate resources to combat that threat using Intelligence Driven approach to identify disrupt that most grievous actors. Criminal organizations are diverse and trade employ a myriad of criminal activities, traffic in narcotics and firearms to fraud and major theft. The fbi is where the continually evolving trend of organized retail theft and we prioritize efforts to combat thisar threat might work with Law Enforcement partners to identify these organizations, disrupt them, dismantle it using the enterprise theory investigation employ sophisticate investigative techniques. We tell theft consistently might consist mostly of state crime cyclically evolved into activities you do proliferate transnational organized crime. Stone goods are transported across state lines or internationally. What illicit goods proceeds from retail crimes are used to fund other transnational criminal activity. To better support these investigations fbi partners wih state, local, federal law and enforcement around the country through various task force initiatives took about the fog and Violent Crime and organized fbi lead several major theft taskforces from the country that are dedicated to the feeding these criminal organizations involved in interstate transportation of stolent good. Some of the challenges with investigative organ organize theft most of these crimes appear as state defenses things like shoplifting, beat it they are not reported to the fbi may not have clear connections to Transnational Criminal Organization. To address this challenge fbi continually partners with state and local Law Enforcement to share intelligence on crime trends and patterns to create Better Networks to identify criminal actors. Just this past april organized task force arrested Seven Members and organize theft through investigation resulted in collaboration by over 70 Police Departments throughout the new england area. Several members of the crew were arrested in connection with thefts throughout the region include catalytic converters stolen from a performance of the vehicles, cash from automatic teller machines are shouldice and roosters. The crew is leisure responsible for estimated 2 million in losses throughout massachusetts and hampshire since 2022 and 2023. Several of these defendants have been convicted the fbi continues a part of state and local Law Enforcement agencies in these types of cases. In addition to the Major Theft Program we dedicate resources towards retail theft through things like our authority tout investigate hobbs act violation. These cases a dollar amount is less important than the overall impact of the community. The theft is facilitated through violence. These crimes might have a lower financial loss associated with them but the larger impact on the community in addition to the impact on interstate four congress is significant. The fbi actively participates to the Retail Industry and private sector partners. The National Retail Federation Conference making private sector outreach efforts to her office and private sector and office of private engagement. And also to fbi headquarters and a 56 field offices around thert country. These relationships and industry events are important active communication information sharing, coordination between fbi and retail partners. Recent smash and grab robberies have guarded much media attention, the fbi also focuses on investigating and disrupting e conflicts theft schemes involving targeted retail theft of high dollar items such as sophisticated fraud schemes and steal commercial cargo loads. We were close with private sector to develop a strategic Cargo Theft Initiative and address the growth in the cargo theft and supply chain theft. In march of 2023 cargo net Industry Association reported six 100 increase in strategic cargo theft. Somemo of these cart go theft schemes theft and fraud and cyber enabled fraud such as compromise. Fbis initiated theft groups in groups coming from chile other south american countries and visa entries to commit crimes and return back to the countries and share some of the proceeds and sell the proceeds international. Appreciate the opportunity toin speak to the committee today and i lookic forward to answering yr questions. Thank you mr. Perez. Ofre for five minutes questioning additional ram may be called after all members have been recognizing how recognize myself for five minutes. I appreciate the service and what you all do and especially your partnership with the state and local levels. It starts by trends. And ask each of you quickly are there areas geographic areas, cities that seem to have higher rates of organized retail crime that are being impacted . And ill start with you and go down the line. Thank you sir for the question. We see the criminal Transnational Organization are no logo tied to it schemer enterprise. What we do see is organized retail crime groups involved in certain methods and methodologies. I think theyre driven by greed and opportunity. Not so much location and geographic region. Mr. Perez quickly any areas you see being impacted . Out state no areas in particular. I agree with hsi there is geographical they take the exploitation where the opportunities can be exploited. Gas pumps are huge thing several years back. I95 our offices around the country have nine major taskforces. They vary in range from los angeles, memphis, pittsburgh to west texas el paso evicts establish an organized Crime Task Force as well this is deferred to buyer local field offices isk cannot speak to one area more than another. Various trends mention one quarter icing theft fuel theft of fuel in west texas in your area that are significant that leads us to establish local partnerships to targets of the unique threats requests what about thresholds . Im using state by state or jurisdiction by jurisdiction or action from das that have led to increases . Lets say that raising of a felony threshold. Is that having an effect on the number of organized retail crimes against that you see . , i cannot speak to that. Any other on the panel . No, sir. Okay. Lets go for the secret service mr. Kaine, what does the secret service he is the largest threat to maintaining a safe environmentt for dental transactions whether it be credit cards, gift cards, u. S. Currency, talk me through that. With the holidays hitting highvolume places like Convenience Stores gas station seems to be the best they can get a lot of numbers very quickly. The second kind of on the edge of new things which is like the scanning of the qr code which are not actual qr codes. They will take it to a site and ask you to apply information, personal information that is a new everything gift card fraud which is happening more prevalently will people taking gift cards we encoded it in the back, activating quickly with limited amount of money. When you buy the gift card your load in the dollar up. Combat and thats a hard its heavier on the retail its at the Convenience Store levels on the locals again the person giving the atm sliders they need to make sure those devices are legitimate. But i say give it a tug and might come apart you never know. Next we are talk about operation boiling point focus on combating organized retail crime trends. How many organized retail crime investigations have hsi Boston Field Office conducted to identify any redtape or roadblocks astute in the way between effective partnerships with state and local level . Thank you for the question. We do have active investigations ongoing no. I dont have a historical number but certainly those are international in scope. Theonce that involve federal, fake, local partners spread throughout new england. What i will say is i dont see any redtape. What i do see is the necessity to prioritize that myriad of crimes that we see as federal agents. We see threede tiers of retail crime when youre single scope who may steal out of necessity to your more coordinated groups that mightri not reach in interstate commerce number three is where i think the right should be as a more he more sophisticated networks. Those involved in sophisticated sophisticated methodology. We do see a gap between one to another state, local, private sector which serve to your point. Are these deterring or scaring the public as it scaring the public and deterring businesses from having open stores in differentth places . What i could say is obviously the awareness of the crime has certainly been something we have seen much more of. I think the awareness will help us to attack those networks and make sure we have an impact. Thank you, my time is expired and now ranking record is the Ranking Member of your questions were. Thank you all again your Public Service and coming here today. One of the things we are challenged with we have this conversation as difficulties with the data. To the chairmans question about certain areas where its more prevalent to questions about is a more prevalent over time . We are hearing from the retailers it is and we believe them. But the date is spotty. Going to ask each of you are you able to get as agencies the data you need from local Law Enforcement, for retailers to help you anticipate the trends . If not are the things we can do at the policy level to help fill in the data gaps we can better wrap our hands around the situation and how to deal with that i will open it up to any of you. Thank you for that question. And certainly to that point is white hsi established 2. 0. Four pillars toio establish partnerships. We havey dissemination but also acquisition that will help usd disrupt those organized crime organized retail crime networks. Lastly make sure we are enhancing Public Awareness campaign. Too that point is understand the data. Understanding the threat and for us in Law Enforcement speak on behalf of secret service and fbi what i said the more information we have the better prepared we are to address not only existing threats but emerging threats that maybe we dont see that part point cyber enabled crime is something we are significantly concerned about Network Intrusion and data breaches combat information that may not be public is certainly a concern to Law Enforcement. Cy i think we could be a benefit to our private sector partners to help them resolve and mitigate those threats. , one of the things with our facility we will train 5000 people or at Law Enforcement agencies this year throughout all of your districts. Those we come the barometers for fraud and what is happening in the sectors rate that becomes my data resourceen. They are telling me very robustly this is occurring in our district heres where we should apply resources. One area that we talked about is countering Money Laundering in 2023 is something we suggested which helps us go after unlicensed Money Laundering we believe if you can at the pocketbooks of bad actors they will find a new crime to participate in. That is the two things. Thank yous are similar told my colleagues have said as far as collaboration the fbi national we tried to improve framework to collect that information from Law Enforcement. Her criminal Justice Information service and through our program to collect that data from Law Enforcement that is only as good as what is being put into the database if you will. Sofo we try to expand that and augment that through our collaboration individually with our fieldan office. Task force concept is triedandtrue for our Law Enforcement we sit in a cold look at an environment of at times we will embed with them in effusions under simplest averments on the country to really be on the front line to receive that data and better leverage that information in addition the outreach pieces i mentioned with elements dedicated for private sector engagement. Domestic Security Council program to really have direct contact and outreach with our private sector partners to include the Retail Industry. Also the specific efforts we do out of her Major Theft Program and have discussions to attend these conferences and be a part of thatre discussion to articule and receive it that need is from the Retail Companies to better receive that data so we can make decisions by. Thank you the time i have left is one more question. As we mentioned earlier, we are not on what individual shoplifters we are talk about sophisticatedan organizations tt are stealing goods at scale for resale during this to make money for selling goods on the black market or online or what have you. Could you talk a little bit about what your agencies are doing at that point of resale to try to disrupt with the organizations are doing question work i would think often times its easy to catch themso potentially at the resale point then is at the store level. Thank you sir for that question. Might i just add it will help us to do that to understand those that are involved in ecommerce platforms and thirdparty third partysellers and reseller. That is certainly something in her Innovation Lab in her cross center we are working very closely on. Those are great areas to what i call make your case. We also have to forensically prove it so those two key elements for us are helping put the point away. Similarlyea with focus on the darknet of illicit proceeds,yo narcotics, weapons and stolen goods in the darknet. Sometimes the retail portion will look at it try to identify the organization is more individualized we can use that to begin a case and develop the intelligence to determine where the merchandise is coming from. We look for ways to identify those networks and disrupt them through those patterns with the goal there is to again identify work up the chain sometimes identify the money group as well that comes and returns from the sale of goods really helps us identify where they networks are precooked some overtime allele toback. Think in the chair now recognize a judgment from North Carolina. Mr. Bishop. Are lax local prosecutorial practices with a property crime contribute to the organized retail crime that you described . There again i cannot speak to that. I can so we work aggressively within the federal scope of statutes we have goods for interstate transportation of stolen goods, or things like the hobbs act those are violations we will investigate aggressively. Can at times we can leverage state prosecution as well if for some reason you cannot charge a case federal work aggressively to leverageis both. Close our lax Border Control policy contributing to Transnational Criminal Organization conducted organized retail crime . Works i cannot speak that either. To progress in either of you speak too that . , what i can say were certainly laser focused on criminal networks and thus criminal networks that affect our National Borders Economic Security. Whether they reside internationally or domestically i think we are between our border and security taskforces are transnational investigative units overseas and or an internationalpresence we ared both on your traditional conviction but your nontraditional which would be cyber intrusion, mitigation, obviously other more complex methods to investigate transnational crime. Mr. Cano . We obviously had several cases to your point joint case with hsi in california regarding fraud. The groups are Eastern European coming in and subverting the border process. We have proms identifying them so we do see it. I see it on a very limited scale but not on the scale maybe the year old and hsi see it. Have there been reductions and local Police Forces . My impression during the pandemic following the georgia floyd killing and the issues related to that we saw Police Forces decline. Sort of a surgeon and resignation. We recover from that . Locally as far as resignations i dont know i think there is a challenge in recruitment for local Law Enforcement theres recruitment at our level to get people on the books. I cannot say its attributable to those. Mr. Perez . I amm aware of some decline n recruitment. For the federal departments and Law Enforcement. I cannot speak to as to the why. Following company it that obvious they had an affected nationally. I cannot speak to whether theres an upswing or not. Was state and local partners have been recruiting. Im partners where they need it. Think some of the more nontraditional methods or assisting state and local Law Enforcement partners whether they are in Violent Crime, narcotics trafficking, weapons trafficking, other areas certainly organize step groups we can provide those resources to them. The task force program. We can help to augment their local Police Departments with possibly data sets and other information they might not have available to them for. I am familiar international, North Carolina for example theres an enormous loss of a police force cities throughout North Carolina morphing with that than other cities in the country. Theres been tremendous impairment of the police force forcing thell size of the police force their way down from their anticipated numbers but it. It struck me i certainly appreciate thehe fact waiting to attribute causes that doesnt seem to me but we can help treat symptoms by doing more information sharing and task force and resource provision if we caused a lot of the problem by not sufficiently backing Law Enforcement and policymakers have given an adequate support t for their Law Enforcement. If we have prosecutors who decided not to prosecute crimes. Favor border that is uncontrolled and it gives rise to Transnational Criminal Organization led bands and do these types of crime are probably not going to solve the problem until we address those problems. That is just my observation for us really appreciate thee effos you bring to the case every single day and all of those men and women who work under you and in your agencies. Thank you. If i was asked by the chair recognize a gentleman from california. Think it mr. Chairman i want to follow up on mr. Bishops comments. Data information and i can ask the three of you how much of this is organized crime versus retail crime that is shoplifting . Do you have any guesstimates here . Sir, thank you for the dated that we have is certainly something we need to work better on. With state and local partners. I cannot speak to exactly the difference between a more retail crime. And i ask you that because i want to make sure we are not operating in silos and if we are we try to get away from them. Mr. Perez mentioned the gangs that popped up in my county, county,Orange County californiay local d. A. Brought up to my attention. And we brought up to the feds attention. We change the visa program. The visa waiver program. And we hope that helps to begin to solve the problem. But i cannot help but think sometimes we are chasing our own tail and we are a little bit late to the party so to speak. And so sharing information almost on a realtime basis is key to figuring out the patterns and trends ofk what is emergin. From the situation a lot of groups. Looking at the retail versus the shoplifting versus the organized crime weve got crypto weve got interesting things working here. Cooley want to protect from these losses fairly want to protect retailers as well. Coming up with good solutions. A lot of our Law Enforcement numbers are down. That is a big issue we got to figure out some solutions. Smash and grab, organized crime, retail theft is hard to figure out which is which. If youou do not know which is which its even harder to come up with a good solution. I look forward to work with all of you and try to figure this out. Get some reall data folks appear with the administration. With Real Solutions in real time. Let me ask another question which is we talkat about your cooperation federal, state, local what about international . International players out there might be part of the situation . We appreciate that comment. Certainlyte our investigative president presence overseas is the largest that we have working through a host country transnational criminal investigation units are very important to receiving information. As you know our authority is special agents in the International Footprint differs and that in the United States. We certainly rely on our knowledge the investigators and others to make sure we are receiving the appropriate information were able to act on them. Are better than they have been in my 22 years. There Getting Better . They are Getting Better and i believe that because information flows so much either between our country and the informal agreements. But we canin provide and what ty can provide a suspect certain countries as you know will never work with us. But many along the way have been very good to us especially very good to our investigation for. Over all i was a relationship is good. Th maybe in a better situation as well. We position agent strategically and hurt legal offices well over 60 round the world. More specific to the startup of the south american we are up three positionr, in addition to our legal attache we supplement the office to add additional bodies. We have legal attache is in mexico we have supplemented that without refrigerants or Border Liaison Officers. We supplemented that office in chile to add additional bodies. And mexico. We have also supplemented that with what we refer to as our Border Liaison Office is. We operate in mexico to collect information and communicate more directly with our counterparts. I am glad to hear you say that because it is not your problem. Is not their problem. It is our problems. A victim, whether it is a family a Family Member any diplomatic solutions, let us know, we are herens to help. Im out of time and i yield. The gentleman yields. The chair recognizes gentleman from new york esposito for questioning. Good afternoon, thank you all for your service and for being here. It seemsowow that one of the pry hurdles to successful prosecution of organized criminal groups repeatedly targeting Retail Businesses is the difficulty to tie an individual or a group to multiple incidents across several jurisdictions such as patterns rather than looking at each incident individually which fails to recognize the toll the group may have and maybe taking on a particular retailer. I want to thank the chairman for his work on this committee and one of the things that weve been focusing on the committee that i chair, the subcommittee of emergencyta management and technologies is communication and cooperation between different agencies, i spent a career in nypd and as Law Enforcement professionals we could probably say that one of the greatest tools in our tool belt is communication with other agencies. So i think whats important for those that are listening back home and for those here, what resources are available from agencies like yours that could specifically help local and state agencies so that we can do a better job . Sir, again, i go back highlighting task force initiatives, developing safe streets, organized task force that is have unique threats, unique responsibilities, establishing, mayor theft task forces and the program for the department for the fbi, other elements of the department are really our core model for collaboration, both federal and state levels and we are working with our partners to establish a Strategic Initiative to help target organized retail theft o really just better allow resources and funding and communication efforts at the federal and state level throughout the country. Thank you. Thank you and i would echo, i would see too, deconflict in. Thats great resources because they dont all talk to each other, however, a lot of them participate, nypd does in accurate database which allows all state agencies to talk but front task force, similar to the other task forces, again, thats how we inject tools, resources, again, thats funded by you that goes directly back out to the office. Thats how wee do it. Otits been highly successful. The gentleman here today 80 of the work i do is not for my agency but state and local agencies. Sir, thank you, having worked in new york city i know nypds finest very well. Thank you for your service. Thank you. I can certainly speak to centers of excellence, crime center, national and intellectual properties and coordinations andyo many, many others, certainly there are all great senator that is provide great resources and information to federal agencies and i think what we are doing and we need to do a better job is making sure that we are reaching into our privateny sector in state and local partners to ensure that they understand the Resources Available to them. I think the National Intellectual property right center that we lead is certainly a great example of Public Sector and Public Partnership that is we need to use to enhance investigations, you know, i think i think we have the holistic view and whole of government in private sector view on crime, itll be toughgr for us to to attack this threat. To your point, very often wei see resource that is you provide are often from the top down and i guess my question is, how can we do a better job making sure exactly what you mentioned. Thesee smaller Law Enforcement agencies. You go back to my district where i represent many villages, some of those villages have their own Police Departments and deal with retail crime every single day. They may not be afforded the same opportunities like the big ones, like the nypd and other big Law Enforcement agencies, so not only i guess what can we do as members of congress to make sure that all Law Enforcement professionals know exactly the resources to provide and the secondary of the question, how can we on both sides of the ill work with you to make sure that, one, those resources are there and number two, that those smaller agencies, even the ones that are in tucked in small towns that are unfortunately are battling issues right on main streets, how canan we make sure that they have the information that they need to take advantage of the great work that you guys are doing . The time has expired. I would say we need to be nontraditional iny approach and that is possibly, you know, inserting special agents in subject matter expertise into local Police Departments much like we have with our Task Force Officer program, train the trainer and let them be the best resource in their Police Department to comee to hsi, atf, wherever it may be. Certainly we do that in rhode island, we do that in vermont, vermont and other areas. Its a National Model that we all use. Thank you very much. I would love to follow up with you on this. My time has expired. I yield back. The gentlemans time has expired. The chair recognizes lady from nevada, ms. Titus. I mentioned earlier that i had witnessed some of the organized crime and it was in a walgreens and a person came up with a backpack and just started scraping eyelashes into the baccalaureate. Eyelashes arent power tools and look around but theres certainly a market for it and they dont sell it directly, they sell it to somebody at swap meat who sells or sells it to someone that sells it on the internet. Yeah, he comes in here once a week but the company told us not to do anything about it because we might get hurt or the customers might get hurt and all of us have been in stores where you now see everything is locked down and you have to call a clerk to come over and help you retrieve something. You cant just pull it off the shelf. So its dangerous, its inconvenient and its costing tax money as well as the business profit. What can we do to help you do your job better and i would ask you, mr. Krol talk about operation boiling point. Its like Fusion Centers in communities where all the different kinds of Law Enforcement, First Responders and the private sector in my district las vegas nobody has a better eye in the sky than gaming does to try to address this and my bill hr895, its a provision to house a center to organized retail crime within hsi and i wonder if might comment on how that would help us to bring information together. Onestop shop or complement what youre doing . Thank you very much for your longstanding efforts in this space. I cant speaked to, you know, legislation that is still ongoing and hasnt been signed into law, what i can say is that we have seen a similar model used many, many times before and that model is not new. Multiagency command centers, multiagency deconfliction centers that involve the public and privateat sector and Law Enforcement partners are certainly the best case and best model for us to continue. Operation bulling point 2. 0, little are active stance to identify who to be in contact with and how do we gain information in private sector that we dont already have. I think we talked about the first line of defense state and local partners and i think thats an important piece of 2. 0. That raises the other kind of itproblems. These organized groups use the money for drug trade but also for human trafficking. Can you talk thebe about that mr. Cane . Most of the crimes under our purview dont lend itself to human trafficking. Probably more my colleagues. Either one. We do have a human trafficking, i cant speak to any connections specifically to organized retail theft. I mentioned earlier criminal organizations, diverse, they are always going to look for an opportunity to make money, retail theft, trafficking in person, drugs, guns, whatever allows them the ability to make money. I havent seen a correlation between the two but that speaks to the need of what we have been talk thing about, continued collaboration, collection sharing among Law Enforcement partners. Chair recognizes the gentleman from arizona, mr. Crane. Appreciate it. I want to say thank you to the gentleman on the panel for your careers in Law Enforcement. I did notice when chairman pfluger asked if any of you saw any trends in the explosion of organized retail crime, none of responded with any trends that youfo guys were noticing. That struck me as interesting because i know that you guys are all really smart or you wouldnt be here. Isnt part of being an Effective Member of Law Enforcement having the ability to spot trends and pattern recognition, mr. Krol . Yeah, certainly appreciate your concern and recognize your question, of course, we focus on emerging threats and existing threats truly to respond to those is something that we do every day. I think the sovereign able crime up front is something that we are dealing with right now. Network intrusion and data breaches especially items, identity, licenses, financial information, something that concerns most of us. I would say that would certainly be a trend that we would look to. Okay, thank you. Having a billionaire like george soros spending 40 million of his own money supporting leftist prosecutors and das who are soft on crime might have something to do with it . Is that a trend that might have something to do with the insanity that we see in americas cities right now . Thank you for your question. I respectfully withhold comment on that one. Smart. Mr. Cane . I wouldnt have the context to provide intelligible answer. Okay, mr. Perez . I think that might be a trend that hasas something to do with the lawlessness that we see going on in American Cities . I cant comment on that. Okay. How aboutin lowering the felony thresholds as mr. Pfluger brought up, do you think it has anything to do with it . Same answer . I respect the fact that you gentleman have to be careful. I get it but you think that might be a trend that has something to do with the out of control retail crime that we see going on across the u. S. . I cant comment on that. As i mentioned the federal statute that allowme us to investigate the crimes are ample and we investigate them aggressively. Okay. Well, to be honest, mr. Perez, the federal statute doesnt have anything to do whether youre able to spot trends that anybody in the country knows and understands. Everybody knows whats going on. Its so obvious. Let me give you a Little Research that i just did up here right now. This is from forbes, target blames organized crime for closing nine Stores Across the u. S. Guess what cities they were in . New york, seattle, portland, San Francisco, oakland, any trends there . We all know. Thank you. I yield back. The gentleman yield. Yeah. Mr. Perez picking up on this line of questioning, does the inclusion of a consequence of a penalty, prison sentence of a fine deter criminal activity . Sir, thats an opinion i know i could speak to that youre with the fbi. If theres a severe penalty, does that prevent crime from happening . Does it prevent crime from happening . I can tell you what would leverage sentences in the federal system to gardner better cases and gardner better intelligence. Mr. Cane, do penalties have an impact of deterrence of criminal activity . I think it has a deterrence on cooperation or pursuant further cases, absolutely. I think the point is trying to pinpoint why organized retail crime is happening, its affecting the safety of our communities. When i read the memo from District Attorney bragg that says hes directing his assistant District Attorneys not to prosecute, other things and armed robbie should not be prosecuted as felonies, does that have an impact on organized retail crime in new york city, mr. Krol . Sir, thank you for that question. You know, what i would say i would echo their comments is that certainly has a huge factor. I would say that the length of potential, you know, jail time has certainly has an impact on criminals if you will but outside of that, i cant really spectong that what a prosecutor would prefer to see . Okay. My time has expired. Yields back. I would like to thank the witnesses forou your valuable testimony and at this point in time seeing no other members to question the fist panel, thank you ford. Your time today. I now invite the second panel to take their seats and as administrative note we know that there are votes coming up so we will continue to roll straight into this, give you a second to switch out and take your notes. [inaudible conversations] okay. I am pleased to have a second distinguished panel before us on this very important topic. Ais you to please rise and raise your right hand. Do you solemnly swear that the Committee Testimony you give will be the truth, the whole truth, and nothing serves as Vice President of Asset Protection. In this role, he leaves initiatives and number of programs focused on Asset Protection store operations, engagement across the industry andd promoting best practice and policy initiatives around crime, violence and issues with the profitability of Retail Store Operations Asset Protection, sto operations, engaged across the industry and practices around crime, violence, loss, and instances about profitability and store operations. Mr. Johnson has up to three decades of local Loss Prevention and experience. Mr. Scott glenn serves as Vice President of Asset Protections for home depot. In this role, he certainly is responsible for home depot Security Systems and corporate security. Prior to this time, with home depot, he spent nine years with the sears Corporate Division and has served on the board with Loss Prevention magazine. And the retail association. Excuse me. Miss at me dekoda is Vice President of the International Council of Shopping Centers. She has been involved in Public Policy initiatives in behalf of marketplaces and industry since 2013. Manages the Public Policy agenda towards retail crime, among other policy issues. Prior to her time here, she served as a Public Policy adviser and a coop fellow in the offices of senator edward m. Kennedy and frank. And miss summer stefan is the current president elect of the National District Attorney Association. In addition, d. A. Stefan holds cochair of the National Association of women, and judges the human trafficing committee. I thank all of our witnesses for joining us today and for your time. I now recognize you for the Opening Statements. You have five minutes. Thank you. Thank you distinguished members of the committee for inviting me to testify on behalf of the National Retail federation. And the Retail Industry on the issue of national crime. We have submitted a longer statement for the record. My testimony will surmise that the mission. I work with the worlds longest retail trade commission. As an industry, retail contributes 3. 9 trillion to annual gdp and supports 1 in 4 u. S. Job and supports 52 million working americans. Before joining the nrf, i spent time holding facials with National Retailers. My previous position was leading the corporate security in active protection teams per multibrand organization. I have witnessed firsthand the evolution of progression of theft across the Retail Industry. Shoplifting and organized crimes are not new. However, the landscape of today is unprecedented and unmatched. The frequency of theft, the openness and brazenness of the criminals, the violence, and the quantities of merchandise stolen are truthful indicators of criminal activity beyond amateur and opportunistic shoplifting to me. These are markers for the proliferation and evolution of organized retail product. Our networks orchestrate influence and create demand for those committing theft and fraud in our retail environments. Shoplifting, cargo theft, pergola release, smashing grads, and various brought have adjusted the means to their end. These networks range from loosely organized local and regional groups to highly sophisticated hierarchies offering at the international level. These criminal groups thrive on enabling others to commit their crimes. They prey on the homeless, the addicted, and even the victims of human trafficking. They profit from the reselling of stolen items online, re channeling stolen items back into our marketplace, and the transportation of stolen goods beyond our border. We believe these folks use organized retail crime as a gateway crime to fund more nefarious activities including drugs, weapons, and human trafficing. These groups must be the focus at our local, state, and federal efforts. The impact of organized retail crime extends far beyond retailers profitability. Retailers continue to spend billions of dollars to protect their goods, their workers, and their consumers, including measures that have impacted the shopping experience. Customers have experienced shortness of hours. Small businesses and National Brands have close locations, creating Community Tax revenue loss. Despite what some people say, orc is not a victimless crime. This continues to escalate. There has been more than a 100 increase on assault on violent acts in the last year alone. Employee injuries and deaths have occurred as recently as last week in the city of philadelphia. Retailers have put in final training, Mental Health support, and training to keep their employees safe. Have impacted Employee Retention and pampered efforts in a already tight legal market. Criminals involved in orc continue to take advantage of jurisdictions with higher felony thresholds, lesser penalties for theft, and communities lacking Law Enforcement resources. Even when Law Enforcement engages, lost jurisdictions because of the challenge. One of our members is currently dealing with members of 70 individuals traveling to more than 190 of their locations in more than 250 incidents of shoplifting and fraud. All the summer after ended, the majority atlarge was engaged with challenges in different prosecutorial crime requirements across the states. The commenting retail crime act supports retailers against such criminal organizations in the creation of a federal Interagency Center will bring together information sharing and investigative support at the federal, state, local, and tribal agencies. Changes to the u. S. , code provide these enforcement tools across jurisdictional crimes. With federal coronation, collaboration, support, and resources, we can bring the fight to these organized groups. Please consider three key points. First, without a doubt, the issue of organized retail crime as a serious impact of retailer continues to worsen without appropriate action. Second, this is not a retail only issue to solve. It requires all of government in on the approach. Finally, Congress Needs an important step in passing the consumers act last year. I urge and encourage you to take the next step forward with the organized retail crime. Thank you for your time and consideration. Thank you, mr. Johnson. , you have your five minutes. Thank you. Thank you honorable members of the subcommittee. Can you turn your microphone on. Thank you. Should i start over . Good afternoon. Honorable members of this subcommittee, my name is summer stefan. I am also the president elect of the National District attorneys association. I have devoted my entire professional life to serving our community and keeping it safe. 33 years, that is longer than i have been alive not doing this. That is why this issue is very important to me. It is not just an economic issue. If you go to the ground level and actually talk to the employees in the stores, you will sense the fear and the trauma and how much impact this has on human beings. And to subject to industry where they do not sign up for a world of Law Enforcement where there are daily threats, they sign up for what should be a safe industry, and instead it has turned into the wild west. Around the groundlevel view, i appreciate bringing the voice of the victims to this committee and for your attention to this really, really important issue. You have heard that reports. The reports of the loss of jobs and also the reports about the increase in violence. They are the most important and impactful. I have made combating retail threats and organized retail theft a priority in my office because of what i have seen, the impact it has on my community. I wanted to send a very clear message that we would use every tool in our possession to bring justice and accountability. Because of that, i formed a Specialized Team that this issu organizing along with our state and local Police Officers in order to identify the perpetrators. There are three key challenges. First the evolution of this criminal industry, involves more networks that are more organized and therefore are better able to hide their identities, usually masked up, they even have their license plates covered, theres a lot of premeditated information that goes into it, which means our investigation needs to be more sophisticated. Second, we have a very adequate legal framework, meaning we have very weak laws that deal with these issues. And this has helped this kind of crime become less accountable. The third key challenge is coordination, that there wasnt in the past good coordination between the Retail Industry between local Law Enforcement, prosecutors and the state and federal level coordination. Here are some examples in San Diego County to show you how prolific this is. By the way, we have prosecuted 76 defendants for organized retail theft and we track organized retail theft in our system separate from regular theft, 76 defendants, only three cases that i will mention are more than 1 million and a quarter, a theft of 7000 of multiple stores, 350,000 in victorias secret, 230,000 for the sunglass hut store, how many sunglasses can one person need . The prosecution was made possible by a new law that passed in 2019 that targets specifically organized retail theft and allows us to aggregate something that we are not able to do for regular theft. By the way, chairman pfluger , your state was able to put together a task force similar to what we have in san diego. We also work with the Highway Patrol because most of these organized thieves travel from county to county and they dont stick to one county. Also making their detection difficult. We supported the informed act but it is not funded. So, we encourage that there be funding specifically in order to better enforce the informed act. Also, we support the coronation center that many members of this committee has asked for because being able to bring together the resources in one Coordination Center is a proven tool that is effective. Working with the nda, it has been a pleasure to see the court needed efforts come to fruition, including a national walkthrough where we walk through 100 stores with other prosecutors offices to see for ourselves the problems. Thank you very much for this opportunity, we stand ready to assist and answer any questions. The chair is recognizing mr. Glenn for your Opening Statement of five minutes. Good afternoon, members of the subcommittee, on behalf of the home depot and our 470 thousand associates, im happy to speak to you today about organized retail time crime. We operate over 2000 Big Box Retail stores in the u. S. , my job is to ensure the protection of our associates, customers and assets. We are here today to talk about why it is an increasing problem to our customers and associates and how we can Work Together to stop this. A critical step that congress should take is to pass the combating organized retail crime act. Many have asked if retailers are overhyping the problem, the fact is that retailers were faced with many challenges over the past years and orc is one that is clearly sustained. Its impact to the home depot and many retailers is making them take measures we wouldnt have considered years ago. Even putting police cars at our stores along with many other tactics. Despite these efforts, the problem continues. We even tragically lost a few associates to this issue as wood noted in the Opening Statement. Retailers are not exaggerating the problem, we know firsthand in our stores the impact is growing incrementally. While at some level theft is a cost of doing business, the recent rise in orc and its consequences are what bring us here today. There is a myth that orc only happens in big cities, unfortunately criminals do not discriminate when it comes to targeting stores and orc is happening everywhere, in urban and suburban environments and everywhere in between. Generally, they will sell as quickly as possible. They are also forced with other activities such as drug and we are talking about theft for need for greed, not for need. This largescale multijurisdictional activity is carefully choreographed, sophisticated criminal rings are occurring in vulnerable populations. My top priority is customer and associate safety. Since 2020 we have seen a significant uptick in our store and Asset Protection associates coming into violent contact with bad actors. These individuals are becoming increasingly aggressive, they are dangerous and often care little about any consequence other than getting out of the store as quickly as possible. Our associates have been threatened with knives, guns and also other physical attacks. I believe theres three primary root causes at first the availability of drugs, particularly opioids and fentanyl. Specifically the availability has driven a need for easy and fast cash. The rise of thirdparty marketplaces allows criminals to anonymously resell stolen or counterfeit goods. Which has made it easy to monetize products and sell them at scale. To fight this, the home depot strongly supports the consumers act, the last contributor is the increasing lack of resources and support for local, state and federal Law Enforcement opportunities assistance. Retailers need help in disrupting these criminal activities. Lets talk about solutions. The home depot is working hard to address all three underlying causes. First we have grown our Investigative Team by over 180 since 2016. In stores, we are using technology and physical deterrence. These include everything from increased security personnel to secure closures, to smart shopping carts and data analysis. We have launched a program where we invite local Law Enforcement and politicians to visit our stores and see this technology and tactics in action and to help educate proactively and build relationships. To address online concerns, we have added resources and implement the Technology Tools to identify bad actors using cover of online marketplaces. A federal task force would allow us to expand upon the progress made and give us all a great nationwide partner. The home depot strongly supports the bipartisan organized retail crime act introduced in the house and in the senate. In support, by several members of this subcommittee, as a professional in the field of protecting customers and associates, ask that all members of congress Work Together to ensure we are combating this to help stop these senseless crimes in our communities. Thank you for the opportunity to tell our stories and we look forward to answering your questions. Chairman pfluger, distinguished members of the subcommittee, im pleased to appear before you today with our partnering organizations and leaders to discuss the strategies of the International Council of Shopping Centers. In combating organized retail crime or orc. Nearly 50,000 north american members represent marketplace professionals including retail tenants, investors, economic filament and legal professionals. We promote industry advancement for the places people shop, dine, work, play and gather. Todays Retail Centers are no strangers to change. Many in this room might remember their first job, their first date or providing your wish list to the malls santa claus. Where you have found the malls, you might find breweries or pickleball courts. Despite these changes, retailers remain the overwhelming majority and 77 are Small Business. Sadly, Retail Property owners are facing an unprecedented number of orc incidents, orc involves illegal acquisition of merchandise in substantial quantities through theft and fraud as part of an unlawful commercial enterprise. And it is important to distinguish orc from traditional shoplifting or a single individual breaking the law. Traditional shoplifting is part of a largely spontaneous and selfserving activity, typically executed by individuals who need merchandise for personal use they simply cannot afford. Those smallscale shoplifters should not avoid prosecution, we recognize that many of these individuals need to be treated separately from those who operate as a part of a larger commercial enterprise. Orc puts a more serious strain on Business Owners particularly Small Businesses in multiple ways including shopper and employee safety, Reputational Risk and financial stability. We focus on the theft and retail of highvalue branded items that are in demand from shoppers from designer handbags to laundry detergent. We need goods are resold using an online marketplace or other means of sale, most consumers are underwear unaware that they are purchasing stolen goods. While smashandgrab garners the headlines, the problem is pervasive, impacting Shopping Centers large and small in all regions of the country. One major mall owner reports that retail crime theft incidents of over 1000 have nearly doubled over the past eight years. Violent crime including aggravated assault, battery and armed robberies have tripled at those Retail Centers. This is just what Property Owners know. Many retail employees have simply stopped reporting incidents to local authorities because they question whether Police Response will be timely or effective or because they fear retaliation from their handlers. This pattern contributes to a lack of prosecution of orc cases and leads to difficulties in allocating public and private resources to combat orc. Here are some pragmatic steps that will enforcement can take. First, building on the success of state and local orc Coordination Centers, congress can pass legislation to create a federal Interagency Task force. As my colleagues noted, there is broad bipartisan support. It can make a meaningful impact on orc by activating the federal coronation center while also ensuring criminal penalties address the reality of how orc enterprises operate. Second, the federal appropriations process can provide federal law and force mood and agencies the resources and a mandate to investigate and prosecute orc rings more effectively. Appropriators funded a Similar Initiative to combat theft with the creation of the National Intellectual Property Rights coronation center. We understand they sought to replicate that and use it as a model for the federal center. This coronation center is a natural next step to build on the effectiveness of the operating boiling. 2. 0 and the accomplishments of the task forces. Despite the rise of ecommerce in recent years, brickand Mortar Stores remain the main channel for most goods and services in the United States. However, the rise of orc has contributed to why some stores chose to close. That should not be taken lightly. On behalf of icsc , i say thank you to the subcommittee and my fellow colleagues for their interest in this issue. Thank you, the chair will recognize members in order of seniority for questions. Miss stefan, thank you for your testimony, to the penalties and bolded organized retail crime and organized retail criminals . Based on my experience and the experience of my team, we believe it does. One of the facts that we rely on is we didnt even see organized retail crime or smash andgrabs, these brazen thefts of hundreds of thousands of dollars until california passed a law that elevated the level for a felony crime to 950 if i may, can i ask, has that had an impact on what happened in los angeles, the 300 of ransacking that happened at nordstrom, the 1000 that happened at the ikea store . We are the second largest county in california, so i assume that our experience would have some bearing on other counties. The California Law is across every county, california, and the key problem is it didnt allow for first time or second time, theres no aggregation and you can steal every day of the week just under 950 and it is the same penalty. So the criminals are coming back every day of the week and they are not prosecuted . They are prosecuted in san diego, but it doesnt mean that it can be a deterrent because its always going to be a misdemeanor. They are not going to remain in custody. What is interesting, a previous witnesses wouldnt talk about the thresholds, they wouldnt talk about the deterrence, but what im hearing is that deterrence matters. Mr. Johnston, are the members and employees scared . Does that have an effect on the consumers being scared to go into retail scores stores because of this . Yes, this is not a victimless crime. Employees, consumers, communities, we are all victims of organized retail crime. Our retailers have reported as i alluded in my oral testimony, many of them have seen increases of 100 or more over last year, which those were all time highs to begin with last year. Injuries, deaths, employees are fearful. No employee should wish to go to work in fear for their job, no employee should have to quit or leave the job for fear. I agree with that, just today, in northwest d. C. , it was reported on wisconsin avenue that six guys with guns romped to the verizon store, for the phones and other technology, im so sorry for the loss home depot has had. That is just horrific. Are your employees at home depot scared for their lives when they go to work because of the rise in organized retail crime . Thank you for the question, i appreciate the chance to answer that. I think we have been at the forefront of trying to protect our associates and take the appropriate steps to make them feel as if they are in a safe environment. Environment. Broader fear in the environment i think we have done a nice job of making associates feel good. Mr. Johnson i asked press witnesses if they see trends, are there cities in the United States that have a higher level of organized retail crime. Ms. Stefen testifiedtn that in n diego they are testified but maybe not los angeles county. Do you see trends, cities where theres higher levels of incidents . We do have anre annual survey that goes out to our retail member that is one of the questions is where they often see the highest levels of organized retail crime andge weo provide a top 10 list. It is based on their responses. It is based on their experiences and their internal data. But that is not to say that along with panelists and organized groups pray on whoever wherever and they can obtain goods and dollars. Can obtain if youth have nonaggregated penalties, doesnt that add to a criminals mind set that they will take advantage of that if they know they will be prosecuted for misdemeanor instead of felony . I would agree with that. Aggregation can play a large role in deterrence where, you know, an individual act, an organized retail crimeag is nota singular act. Its conducted in multiple acts, multiple perpetrators, organized effort so aggregation can be of ergreat support in and assistane in thisce matter. Thank you, last question. Day one policy that took Armed Robbery in some cases from a felony to a misdemeanor, does that embolden . I believe that every prosecutor should follows the rule of the law and robbie is a felony. Thank you. I yield back. I recognize the Ranking Member for line of questioning. Well, thank you all very much again for being here and i want to dive into sort of the recommendations that you all have present today the community and lets start with the Coordination Centers which several of you referenced in in have been piloted in parts around the country. Can any of you comment on the experience of your organizations with Coordination Centers, whats worked, what has not, what are the best practice that is we should be mindful of as we look to expand the model across the country . We have had conversation with hsi about participating with them onor the coordination centr but at this point we have not. I believe in Coordination Centers based on our experience in San Diego County. We use it for every pressing issue, for example, we use it to track School Threats very successfully where we are able to note exactly whether a threat has been resolved and whether we are able to make that school safe, we use it where we finally are able to track 49 million stolen to elder fraud in san diego in one year. So we look forward to having that same type of effort in order to gather accurate data. The best way to come up with solutionsdi is to really know te size of the monster that youre dealing with. And then mr. Grand, one of the root causes of the retail theft that you highlighted is the availability of easy platforms for resale particularly, online. And, again, i will open this up to any of you. What should we as congress be thinking about when it comes to the resale aspect of this. Should there be tougher requirement for Online Platforms to know customers and to know who is selling goods particularly large amounts of bulk goods that are highly likely to havee been procured through retail theft . Yeah, thank you for the question. You know, in a perfect world, long before being resold we woulde not actually experience loss. I think the informed consumers act wast . A great fist step but also know theres opportunities with enforcement. We also know theres opportunities with education and we need to continue to kind of round out the the needs and the ability of using the informed act to kind of help that resale opportunity and actually put some teeth into it from a prosecution perspective. The informed act is a great tool that it needs the people with expertise in order to make the cases. In the old days we had the pawnshops so we put together that we need the show id and other things so everything went online and really this is why covid shut down made more shoppers go online so this became extremely profitable but we need the ftc and Law Enforcement to be able to have the technology to work with those platforms in order to bring accountability. So i think we all agree that this is an issue thats worthy of our attention in congress and we allll want to Work Together o try to help you in combating organized retail theft. Thats why i sign on as cosponsor toi representative titus and bucks retail theft act and i encourage colleagues to look at the bill and do the same. It deals with the aggregation issue and penalties in the u. S. Code but also gives Homeland Security and doj some additional tools on the investigative and data sharing side that are important as well but the last moment that i have here, people are watching and those of you from industry that are leaders in the space have adopted practice to help protect employees and your customers. I just want to give any of you opportunity, if there are best practices that you wouldic loo highlight that might be useful for others who are watching to see as well. Thank you for the question. What i would tell you is that our our process and our policy at the home depot is to make our associates understand risk versus education process, two provide them with tools for deescalation, really making sure that they understand how to extricate themselves from these types of scenarios and three be great witnesses. Teaching people to be great witnesses to whats happening around them can help us then close cases down because we bring all of the information together into kind of a processing database for us and we use that information to work withth Law Enforcement. Thank you all, i yield back. The gentleman yields. The chair recognizes the chairman from new york, mr. Esposito. Thank you, mr. Chairman. Thank you for the work that you do. Madame District Attorney, im paraphrasing but i believe when the chairman asked a question, your response that a District Attorney must do everything in their power to uphold the law and someone for example is charged with robbie and should be a felony and prosecuted as such. Obviously that question came about because of the da that we have in new york city specifically in manhattan and i know mr. Magaziner mentioned when its retail theft many are trying to Work Together. Many arent trying to Work Together but there are actually a member of this subcommittee who is a very big supporter of that. Mr. Goldman is ail big supporter of mr. Bragg in manhattan and theres no question that we are trying to Work Together but when we see cities like new york city, city that i wore the uniform in, proud nypd detective for my entire career, those cities are suffering because of policies put in place by democrats. Thats without question. We have in the state of new york the governor who was a democrat, state legislature and the senate, democrat controlled, put in place criminal justice reform. Bail reform and at no point at any time did they have any conference with people in Law Enforcement who actually on the street making sure that they were living out to protect and serve. At no point did they have conversations with men and women who wore the uniform who were wrestling illegal firearms from peoples hands. Those conversations never happened. They did it because they believed that they were going to reform our criminal Justice System and i will say someone again who has spent career in Law Enforcement there are reforms needed but there are reforms that need to be painted with a broad brush so i want to thank you for saying what you said and making us all realize that when someone is elected District Attorney it doesnt give he or she the ability to rewrite in new yorks case the penal code and get to pick and choose what crimes they prosecute. This has led places like new york and not just the city but in places like my district and southwest porter of long island where you walk in places like cbs and walk in with your family and grab the little desk, people were taking those baskets filling them up with whatever it is that they wanted and walking right out the door why because of laws put in place on the other side of the aisle, there was really no repercussion and literally took the handcuffs out of Law Enforcements tool belt and put the handcuffs on prosecutors. So what im asking here today is what can we do, i mean, what is it that members of congress, what can we do to work with local Law Enforcement agencies, besides changing the justice reform, what have you seen that is successful in your area that you can do to curtail from disasters that we are seeing . I think what youre doing here by example coming together around smart legislation which has bipartisan support is a test. For me in san diego whenever im fighting battles i emphasize that public safety, the safety of our children, communities small and large. Thats a human issue, thats a human rights issue. Nothing will thrive without safety. You take out our police, Law Enforcement, you take out our prosecutors or you make up and you take out the safety, with that there is just no going back. You cannot thrivefo as a neighborhood. I always elevate the voice of the victims where theres nothing more possible than hearing from the people affected and being on the ground because that is just avoids all politics and thats how i handle my region. And youve been a District Attorney for how long . This is my second term. Prosecutor 33 years and i would assume that at no point in prepping for a trial or anything like that and at least in my career and nypd one question that is never asked by those when theyre responding to a 911 call is what Political Party are you from . Exactly. No Police Report ever shows that. Thank you. Mr. Chairman, i yield back. The gentlemans time has expired. The chair recognizes the gentleman from california. Thank you, mr. Chairman. I want to thank the witnesses for being here today and and stephan did a lot of work for californias Da Association when i was in the state legislature. In the few second that i have, few minutes i want to ask you, start out quick questions from you. First of all, this should not be a partisan issue, this is about victims, this is aboutth protecting our communities, so first question to you is would we be better off funding or defunding the fbi, getting rid of the fbi . Sir, we need excellent institutions. Like the fbi . Thank you very much. And then some people in this house that have advocated for that. Second of all, i want to ask you specifically in san diego, the District Attorney in san diego, very good friends with Orange County da, so right now you said california, 970 is the threshold. Anything below that is a demeanor. Anything above that is a felony . 950, yes. 950. And no matter how many times. It doesntyt aggregate. You do 949, 949, 949 and its still a misdemeanor . Yes, sir. One has there been any legislation to change that . It couldld be taken into consideration. There have been discussions, but it has to go back into a proposition before the voters. A proposition passed by the california voters, not the legislator itself. Yes, sir. Okay home depot, one of my favorite toy stores. Yes, sir. I noticed you put in Self Checkout counters. Has that helped or hurt the situation in any way . Thank you for the question. I dont know that there has been any data that ties Self Checkout to organized retail crime. It is certainly something that we are keeping an eye on and looking at the data. But we dont see the type of crime we are talking about are more aggressive rollouts of carts full of products, breaking the locked containers and swiping the shelves and running out the door with 10, 12 individuals. That is what we see in our stores. Thank you very much. And i wanted, you said the challenge we are having with these Shopping Centers, the tenants are moving out, closing down because of the losses in some cases. The question is, who are the victims here, who suffers when you have a Major Shopping Center losing tenants . Thank you for that question. Icsc represents retail facilities of all shapes and sizes, and everything in between, and you are right, we have seen an unusual amount of store closures in geographic areas that have experienced high numbers of orc cases. And when the stores start closing due to the effects of orc, we see loss of jobs, we see loss of state and local sales tax generated and loss of property tax generated and of course it is a blight on the community. A single Grocery Store typically creates 2. 4 million and has an average of 133 jobs. And really, if store closings start increasing, not only will sales and property tax collection decrease, schools and First Responders will be the ones that suffer most. In addition to that Shopper Experience being diminished, you will see effects on other Public Services as well. Not just the loss directly to a retailer but really to the whole community in terms of tax revenue, the ability to support local services and like you said, in my district right now, i see it every day, Shopping Centers losing major tenants in the whole area, it does not look well and the challenge is trying to bring in retail to support that community. But i want to thank all of you for being here today. And mr. Chair, im out of time. And this will be the last question, the chair recognizes the gentleman from arizona. Thank you, i would like to start by introducing a couple letters into the record, one from the Retail Industry Leaders Association. I want to start with mr. Johnston, earlier you said that your organization has a top 10 list, can you go ahead and let us know what those are . Thank you for the question, sir. I do not have those off the top of my head, i can provide that to you in a later date. Do you happen to know any of them since you are testifying here before congress . In no particular order, los angeles, San Francisco, new york, memphis, oakland, chicago, illinois. Imagine that. Just like the last panel, similar trends we are looking for, pattern recognition. What do those have in common, sir . I mean, i get it, you have to be careful that if you Want Congress to help, you have to be honest about these things. These are all democrat run cities. All of them have policy changes just like mrs. Stefan was talking about, somebody who has done this her whole life, who knows that crime doesnt care about your political affiliation, it doesnt care about your skin color, it affects everybody. How about you, you represent home depot, when these stores go under and they lock their doors and barred up their windows, does it just perfect lukens republicans or white people . No, it affects everyone. Yes, it is pretty sad, but like a lot of things in this country, unfortunately, this is another selfinflicted wound. And the worst part about it, you sit here and you talk to the folks before you who are all leaders in the fbi, Law Enforcement, and they cant even tell you what the trends are. Its no wonder we cant solve these problems because we cant even have serious conversations anymore. Mrs. Stefan , did i say that right . You said we didnt even see the smashandgrab type of events until the law changes. When you see these type of retail crimes increase, you also see other crimes, other Violent Crimes like murder, robbery, et cetera, do you see those increase as well . San diego is one of the safest urban counties in america, so we work very hard on solving crime, murders, we have about 100 per year which is too many for me, but extremely low for the fifth largest county in the United States. So, we see trends but we Work Together in the task forces to shut them down, to make sure that our community is safe. We just dont leave anything to chance, so as we saw these trends in organized retail crime, we brought together the task forces, we work on solving them with retailers coming together, putting the images from their videos in one room, coming together to solve this issue. And this is why i was excited about testifying, hoping that other regions will follow the example that we are setting, that my team is setting. Im not surprised that your city has a track record that it does, i spent a lot of time in san diego, i was stationed there for about a decade, and for the most part, i did feel relatively safe, so thank you for what you do. And i hope there other folks in Law Enforcement, all of the country that are watching this and can learn from your example because one thing i can tell you is, you dont seem too interested in partisan politics. You seem interested in justice, protecting the people that elected you, appointed you, wanting you to protect them. And i appreciate you for doing that. I cant say that about every d. A. , every prosecutor in the country. I think it is despicable, just like the question to the panel before you, we have individuals that are pumping aliens and millions of dollars into prosecutor races and d. A. Races all over the country to try and weaken Law Enforcement in those areas. That is despicable, it is disgusting. And americans all over the country of all creeds and ethnicities, races, religions are paying for it. Thank you, i yield back. I would like to say thank you to all of our witnesses on both panels today for the valuable testimony and members for their questions. Members of the subcommittee might have additional questions, and we ask these individuals to respond by writing, the hearing record will be held open for 10 days, without objection, the subcommittee stands adjourned