Baby Formula: Out of the Mouths of Babes and into the Coffers of Terrorists
Why are retailers locking up infant formula behind glass cases like cigarettes? Associated Content reports that the “CVS chain of stores in Connecticut recently put formula under lock and key at its 131 stores. This is happening not just at CVS stores, but at grocery stores, and mom and pop stores all over the country.”
The need for heightened security for products like Enfamil and Similac is because, “to thieves,” according to BusinessWeek, “infant formula is ‘gold in a can’ because it’s relatively expensive and easy to resell on the street.”
And there’s evidence that some of this gold is making its way to terrorist organizations in the Middle East, thanks to Organized Retail Crime (ORCs) here in the U.S.. The author of The Retail Manager’s Guide to Crime and Loss Prevention, Liz Martinez, writes:
“According to CIS Robert W. Nolen, a lead trainer in a course developed with Bureau of Justice Assistance grant money called “Understanding, Combating, and Surviving Terrorism,” many criminals from terrorist countries specialize in the re-sale of stolen consumer goods. The profits from these enterprises are used to fund terrorist activities.
“Shoplifting and burglary crews target retail goods that are easy to resell quickly, like baby formula, OTC medications and apparel. The crew members are often professional shoplifters or burglars who earn their living through this kind of work. Many of them are recruited by and work for established rings of Middle Eastern fences who funnel the ill-gotten profits into terrorist organizations.
“In many cases, men and women from El Salvador, Honduras and Mexico travel together, doing the actual stealing. Each person in the crew has a particular area of expertise, whether it be distracting store employees, doing the actual boosting, or driving the get-away vehicle.”
And there’s more. From Retailers Organize Against Crime, Security Management Online, Karen E. Thuermer recounts two startling incidents:
“In June 2005, The Christian Science Monitor reported that the FBI uncovered a retail theft gang in Texas that specialized in reselling stolen infant formula. The FBI reportedly traced the proceeds to the Middle East, where terrorist groups, such as Hamas and Hezbollah, are active. In connection with that case, Texas authorities seized some $2.7 million in stolen assets, including $1 million worth of stolen infant formula.
“The terrorist connection is not new. It dates back to before 9-11. At that time, a number of grocery store chains in the Houston area were experiencing thefts of thousands of dollars a day of baby formula. When they compared notes, it became apparent that the thefts were carried out by teams of five to six women and younger men primarily from El Salvador and Honduras who were eventually identified as working specifically for Middle Eastern fences.”
What can retailers do to stop ORCs from taking baby formula out of the mouths of babes and putting into the coffers of terrorists?
The first step would be to join the Law Enforcement Retail Partnership Network (LERPnet). According to the task force’s website, LERPnet
“is a secure national database for the reporting of retail theft and serious incidents, which allows retailers to share information with each other and law enforcement. In response to an alarming rise in organized retail crime, the retail industry and the FBI have teamed up to launch LERPnet. With LERPnet, retailers and law enforcement will be able to fight back against illegal activity including organized retail crime, burglaries, robberies, counterfeiting, and online auction fraud.”
Former FBI criminal investigator Chris Swecker told a House subcommittee back in 2005 that “The use of the task forces, coupled with a partnership with the industry, is seen as one of the most effective and efficient tools by which to identify, disrupt, and dismantle organized retail theft enterprises impacting the health, safety, and pocketbook of the American consumers.”
The second step would be to aid LERPnet by organizing and analyzing in-house retail data with the implementation of an identity resolution solution.
From our Knowledge Center series, Loss Prevention expert Jeff Stein writes in Tech Tools to Trap ORCs that
“ORC members often have multiple or hidden identities. But retailers, thanks to many encounters with the same bad guys, have all the data they need in their existing databases. Unfortunately, the data is spread across different systems and departments. With an identity resolution solution bolted on to your existing architecture, you can gather data from multiple data sources and apply sophisticated similarity search techniques to resolve multiple identities so you can figure out who the guy in handcuffs really is. And just as importantly, identity resolution susses out hidden relationships between individuals so you can also figure out who this guy works with.
“Today, the ORC groups have gotten more sophisticated. The larger, more organized groups use their ill-gotten money to support terrorists, money- launderers and drug lords. Fortunately, retailers and law enforcement have also beefed up their tools and resources to combat ORC with dedicated investigative units, various web sites, specialized databases, identity resolution software and RFID tags.”
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