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 IndustryLeaders 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 YorkSan 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 DistrictAttorney 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 CrimeOperational 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 AssetsVirtual 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