By Max Kvidera
The Georgia Bureau of Investigation had John Raymond “Johnny Ray” Smith Jr. in its sights when the agency formed its major theft task force investigating cargo theft in January 2009.
Earlier this year, the Georgia man was arrested for trafficking in some 700 embroidery machines pilfered from a container in Tennessee. In June he pleaded guilty to three criminal charges for his role in an estimated $3 million interstate cargo theft ring that investigators say had been operating for four years.
The ring targeted retail shipments bound for Office Depot, Wal-Mart, Target and Best Buy, stealing from trucks parked at motels, truckstops, rest areas and storage facilities, according to court papers.
Over the past 18 months, John Cannon, special agent in charge of the major theft unit, says the statewide task force has investigated more than 70 cases, collared about 50 individuals for cargo theft and seized $17 million in stolen goods. They have arrested some of the top thieves operating in the Atlanta area and along the Interstate 95 corridor to Savannah.
As impressive as their efforts might seem, they are only scratching the surface of stopping theft of cargo from transportation. Depending on the source, cargo theft loss nationwide is estimated at several hundred million to $30 billion annually. In the first half of 2010, FreightWatch International USA reported U.S. cargo theft losses from warehouse burglaries increased 5 percent to $102 million.
The size of the problem is difficult to pin down because of different reporting criteria, varying databases and some thefts not being reported, says Mary Aftanas, director over the cargo theft program at the National Insurance Crime Bureau. “No one knows how big the problem is,” she says.
Ed Petow, law enforcement liaison for FreightWatch and a retired commander of Florida’s Miami-Dade Police Department’s cargo theft task force, estimates thefts are rising 10-15 percent annually. “We’re hearing about most of the thefts today,” he says. “Five or 10 years ago, we were hearing about 30-50 percent at the most. FreightWatch hears about 70-90 thefts a month.”
Cargo losses are growing in part because of the weakened economy. Groups are taking everything from canned soup to toilet paper. “It’s still on the rise because it’s a crime of opportunity, and the opportunity exists all over,” says Tommy Bibb, of the Marion County (Fla.) Sheriff’s Office.
Cargo theft might be the early 21st century’s signature crime. A rogue’s gallery of scoundrels ranging from local hoodlums to international organizations is drawn to the valuable loads (see “Meet the Enemy,” p. 22). Cannon says he’s identified local individuals stealing as little as a box or a pallet from a truck or rail car and Cuban gangs from South Florida making off with whole truckloads. Bibb says he’s heard of potential links to terrorist organizations and drug cartels “getting into cargo theft because it’s so lucrative.”
Since the year 2000, thefts have often flown under the radar as isolated incidents in areas such as Southern California and South Florida. While electronics, pharmaceuticals and luxury clothing are frequent theft targets, the poor economy has spawned thefts of everything from beef jerky and fruit juice to detergent and toothpaste. Recently, food products have moved to the top of the list of pilfered items in some cargo-theft-tracking reporting systems.
Part of the difficulty in measuring the cargo theft problem is defining the crime and putting it into law. Depending on the state or local jurisdiction, cargo thievery has been called larceny, auto theft or burglary. Law enforcement and the insurance industry in collaboration with trucking and shipper interests have been pushing for legislation that would specifically target cargo theft as a separate crime category. Rep. Cliff Stearns (R-Fla.) in 2005 drafted legislation aimed at port security that included sections dealing with cargo theft. That legislation eventually became part of the Patriot Act when it was reauthorized by Congress.
The U.S. attorney general was assigned to work with the FBI to update the UCR, or Unified Crime Reporting program, the goal to update federal crime statistics to reflect cargo theft activity categorically. In January the FBI announced the UCR now reflected coding for the new crime category. “We’re going to turn the tide with the implementation of the UCR,” Aftanas says. “That’s going to speed up the federal response and prove this is a viable crime statistic.”
Before that happens, however, states have to reprogram their crime reporting systems to accommodate cargo theft data and communicate with the FBI system. “States are broke and don’t have the money to train people and modify their systems,” says Jared Palmer, general counsel for AFN, a freight brokerage and logistics service. “We’re in this little hiccup right now.”
The reporting of crime statistics is necessary because law enforcement gets funding through grants based on need identified by statistics, Aftanas notes.
Palmer is working to get tougher national cargo theft legislation passed that states could use as a model. Even with a federal law in place, the current penalties aren’t stiff enough, he says. “Offenders are out of jail pretty quickly,” he says. “One guy has been arrested eight times for cargo theft. The states don’t have the penalties and don’t understand the risks.”
Palmer, a committee member of the National Cargo Theft Task Force, whose annual summit is scheduled for October in D.C., says another piece of legislation he’s lobbying for focuses on cargo thefts of drugs or food products. In addition to the well-publicized theft in March of $75 million worth of pharmaceuticals from an Eli Lilly warehouse in Connecticut, Palmer says a load of insulin was stolen in 2009. The tainted product moved into the distribution channel, ended up in small pharmacies and was administered by people who became ill. He would impose cargo theft sentencing and penalties that would be trebled for theft of a consumable product.
“I’ve been talking with people at [a food manufacturer] who are concerned that one of the next things terrorist organizations are going to do is to try to infiltrate our food supply and poison it,” Palmer says.
While collaboration to combat cargo theft is increasing, funding to pay for the battle is more precarious. Cash-strapped states and local governments are usually unable to finance anything more than existing police salaries for task forces. Palmer is exploring looking at U.S. Department of Transportation infrastructure funding for future programs. “They talk about updating transportation infrastructure, but they never talk about updating the security of transportation infrastructure,” he says. “What’s the point of having good roads in place if the goods never arrive because pirates are stealing them.”
Palmer is suggesting asking for $2 million per state to update the cargo theft reporting system and finance equipment for task forces. “Funding will pay for itself,” he says. If that fails, private industry, including transportation, may have to pick up more of the tab.
Putting the sting in ‘sting trailer’ For a video interview with Charlie Coe, a Travelers Insurance’s Specialty Investigations Group investigator and former leader of the cargo theft unit of the New Jersey State Police, about what he and the SIG team do to recover stolen property and assist law enforcement, visit www.truckersnews.com. In 2008 SIG built a specially equipped sting trailer now on loan to departments around the nation to assist in cargo theft investigations.
Currently, says Jared Palmer, general counsel for AFN, due to a technicality it’s not a crime to steal the load in a trailer used in a law enforcement sting operation. Those goods technically don’t belong to anyone, and the trailer isn’t in the stream of commerce, Palmer says. He and others with the National Cargo Theft Task Force are eyeing legislation to change that.
When and Where:
Cargo Theft Hotspots
By Randy Grider
It’s not surprising that large metro areas and port states topped the list in 1999 for cargo theft. According to FreightWatch International’s annual report, California and Florida reported the most incidents in 2009. And using LoJack’s Supply Chain — Information Sharing and Analysis 2009 report, thieves are most active on weekends when more loads are left unsupervised. Breaking down days of the week, Tuesdays and Thursdays show a slight bump in activity during quarters where national holidays allow for extended weekends.
As for specific locations, truckstops, carrier facilities and parking lots are places cargo theft occurs most often.
Meet the Enemy
Theft gangs range from common criminals to highly sophisticated operations
By Misty Bell and Todd Dills
In many instances, says J.J. Coughlin, director of law enforcement services for Supply Chain Integrity, the final destination of stolen cargo has been determined in advance. “In a lot of cases they are almost taking orders,” he says. “There’s not too many people who are just going to go out and steal an 18-wheeler full of product and not have a way to get rid of it.”
Many cargo thefts occur either in carrier yards or at truckstops. He says it’s not unheard of for an organized crew to follow a targeted load for “300, 400, 500 miles” until an opportunity arises. Fortunately, Coughlin adds, these thieves rarely resort to violence. “Steal a whole lot of stuff, it’s a property crime. Stick a gun in someone’s face, and it’s armed robbery — 20 years [in prison].” Still, it pays to be aware and to treat security proactively. Once a thief sees the opportunity he or she has been looking for, “they can steal that rig and be gone in 90 seconds.”
Cargo theft gangs can be highly sophisticated operations like the Cuban and other crews operating from South Florida and New Jersey but dispatching teams into the U.S. interior, which, says Memphis Cargo Theft Task Force member FBI Special Agent Torrence White, will often include a couple of CDL holders, a few scouts in cars, an administrative person responsible for arranging rental cars and hotels some of these crews use. One signature of such a crew, says White, is a dual-driver scenario. A first crew heists a tractor-trailer and dumps the tractor nearby, hooking its own power unit and moving to dump the trailer farther on. “A lot of the first drivers might not know the final destination of the trailer, only that someone else will pick it up,” says White. “They’ll watch it for a couple of days to see if it’s hot.”
Down the line, a fence on eBay, Craigslist or in wholesale who for all intents and purposes operates like a legitimate business will be connected to the crew to sell the stolen goods. “Some might end up selling it all back to Target and Wal-Mart after taking it from them,” says White.
While the majority of cargo theft is organized, smaller one- or two-man crews often operate locally, targeting particular areas for trailer break-ins. In the Dallas area, where Coughlin is stationed, he says he knows of several fences that will hire locals to prey on drop trailers, giving them around $0.10 on the dollar for the stolen goods.
Koch Foods driver John Gibson tells the story of his only theft experience, on Cicero Ave. in Chicago near I-94. He was stopped at a light and his reefer trailer doors were opened by a thief, who unloaded boxes of chicken before, as Gibson puts it, “the driver behind me got mad and ran him over. They got 17 boxes of chicken and a heaping of road rage” for their trouble.
Drivers and carriers partner with law enforcement and insurance investigators to combat cargo theft
By Todd Dills and Max Kvidera
Talk with a cargo theft detective long enough and you might mistakenly walk away with the impression the phenomenon of the “driver give-up,” as New Jersey State Police Lieutenant Michael McDonnell calls driver collusion with thieves, is the biggest problem going.
Recall the scene from the HBO television series The Sopranos’ first season, in which a driver is cased from a distribution center by two characters and, when hijacked at gunpoint, requests that the cargo thieves rough him up so that investigators and his carrier will actually believe that he was robbed and wasn’t in on the theft from the get-go.
McDonnell uses that scene in presentations he gives frequently to industry parties and local law enforcement in New Jersey and elsewhere as head of the NJSP Cargo Theft Unit, a squad of five dedicated detectives centered in one of the biggest hotspots for theft in the nation.
McDonnell and others see both drivers and their carriers important partners. These type alliances are becoming more common in the fight against cargo theft.
McDonnell tells the story of a load of cell phones reported stolen from a truckstop in South Jersey. It was a “traditional driver give-up. Guy reports the load stolen. Police officer comes out, starts questioning drivers who were next to where the empty spot is. First guy he talks to says, ‘Oh yeah, I saw that truck with the big Indian on it with the circle around it. Yeah, and that guy you’re talking to, [the hauler who reported his load stolen], he was waving goodbye to the driver when he left.’
“That was a great example of a driver being alert, watching what’s going on and just helping law enforcement out.”
The “victim” in this case ended up cooperating with police to lead them to the cargo’s recovery at a known theft storage site in a warehouse down the street from the truckstop at Duncan Ave. and U.S. 1-9 in the shadow of the Pulaski Skyway in Jersey City. In his dealings with drivers, McDonnell says, “around at the truckstop I’ll hand out my card and say, ‘Hey, if somebody approaches you [offering to pay you to let them take your load], don’t say no. Say maybe. Take their info down.’”
McDonnell can point to many instances where “just great people” among the driver community have “helped us out like this — 99.9 percent of the truck drivers out there are just great. Sometimes they can be active participants in the investigation [see “Good Samaritan,” p. 24]. Sometimes they’ll just supply us with good information and steer us along or maybe we’ll introduce an undercover into the mix.”
For carriers, trucking industry cargo theft prevention frequently is a matter of carrier size and resources. Larger carriers have more money to train drivers, install security devices, track their loads and provide more secure parking facilities. “For those that have security programs and are vigilant about them in training and retraining their drivers, the numbers [of thefts] have actually decreased,” says American Trucking Associations’ Susan Chandler, executive director of the supply chain security analysis prevention council.
“There are issues with some small mom and pop carriers or brokered loads where all they’re doing is putting a load on a truck just to get it carried at the lowest rate,” says James Morton, director of corporate security at Prime Inc. “Theft or contamination of a load is a big deal to our customers and we take it seriously. We work to prevent them.”
Morton and his security department staff of 22 provide training at new driver orientation and follow up at weekly safety meetings. They require drivers to put a locking hasp and heavy-duty lock on trailers. Other devices include an anti-theft device for the truck that requires entering a code before it can be started and an Air Cuff lock to prevent the truck from moving. GPS is standard on trucks and trailers, and the company arranges for secure yards for parking in several cities nationally. “Some people say it’s overkill, but security is a matter of layers — it’s not just one thing, it’s several things,” he says.
When container hauler Evans Delivery changed cargo insurance companies in 2008, they began working with Travelers Insurance’s Specialty Investigations Group to reduce their incidents of cargo theft. Travelers SIG, says group leader Scott Cornell, consists of 9 full-time investigators based in theft hotspots around the country. They work theft cases for their clients and share information with law enforcement. Cornell and crew saw in Evans “a company that definitely took the issue seriously.” Cornell says Kim Lorimer, safety vice president at Evans, already “preached anti-theft procedures to the drivers and warehouses managers, dispatchers and others.”
But Cornell and his team recommended a program of additional measures, most of which didn’t cost the company a dime. “We’ve instituted a no-stop rule for the first 200 miles of any run,” says Lorimer, “as well as security checkpoints on all of our yards.” Bolstered communication of information about theft trends in specific areas between management, agents and Evans’ mostly owner-operator driving core has been key, likewise, to an almost three-fold reduction of theft incidents, from 14 in 2008 to just 5 in 2009.
“We’ve only had one incident so far in 2010,” Lorimer said in late July.
One product that has unintentionally aided security is the auxiliary power unit. “APUs are good for the environment and reduce idling, but a side benefit is as a security system,” Prime’s Morton says. In the past, drivers often left the engine running at a truckstop or rest area because the weather was too hot or cold, and the tractor-trailer would get stolen even though the doors were locked.
Chandler says that a couple years ago, several high-value loads were being transported inexpensively. Now shippers are more discriminating about what carriers they hire and what security measures they expect. “We try to advise shippers that want to haul their products in trailers with big letters saying ‘fresh shrimp,’ for example, might not want to advertise,” she says. “We’ve definitely seen a more conscious effort on the part of both shippers and carriers to work together to deter thefts.”
Trucks and trailers are of course most vulnerable to theft when they’re stopped. The number of warehouse incidents rises as clever crooks invade facilities or use technology to track specific loads from one location to another. The weak link appears to be truckstops. “Truckstops are the most dangerous place for a truck to be [for potential cargo theft] — no matter what kind of load it is,” Morton says. “It’s not the truckstops’ fault, but it’s where truckers gather and where crooks will be also.”
Some shippers and carriers are doing a better job of timing loading and deliveries, adjusting schedules so drivers aren’t stuck with a load on Friday that can’t be unloaded until Monday, or are providing a secure area where a trailer can be parked.
Common sense isn’t expensive. Preventive measures such as parking in a well-illuminated area, backing your trailer door against the back end of another trailer or a wall and locking your truck and not leaving the engine running will help thwart some thieves, Chandler says.
Misty Bell contributed to this report
Growing collaboration to fight the problem For a video interview with Travelers Insurance SIG unit leader Scott Cornell about good driver/carrier security practices, visit www.truckersnews.com.
TOP PREVENTION PRACTICE
Drivers and carriers can take the following measures in order to prevent theft from happening, rather than having to recover from it.
• Be highly aware of your surroundings.
• Know if what you are hauling is desirable to thieves, but realize that anything can be stolen: no load can be overlooked.
• Seek out safer, more secure parking, such as secure private yards with clear fence lines (into which patrolmen can see clearly) or secure sites affiliated with truckstops.
• Drivers and carrier personnel alike should make it a practice of building relationships with local law enforcement.
• Carriers should encourage shippers to use hidden cargo-tracking devices and use the same in their trailers.
• Take care of your cargo as if it is your own, and never leave your keys in your rig.
• Take advantage of and emphasize training and awareness of the problem.
• Utilize anti-theft and security devices like back-door, pin, landing gear and air cuff locks.
A cargo theft sting operation with a trucker at its lead
By Todd Dills
Alabama hauler Brian Miller (not his real name) was down on his luck. Sitting in a truckstop off I-81 in Wytheville, Va., earlier this year under a flatbed load he got on his CB and put the call out to anyone in the area that his CB, as well as his GPS unit, was for sale. “I was short on cash and the company wouldn’t advance me any more money,” Miller says. “A guy gave me $40 for the CB. I let him in the truck to talk on it and everything, and once we got back on the ground he kept talking.”
Miller was a company driver hauling copper at the time, and the man, who said his name was Anthony, offered Miller $50,000 for his load, itself worth in the neighborhood of $140,000. It wasn’t his to sell, of course. “I know it’s wrong, and things like this are costing other companies a lot of money.” Miller took Anthony’s number and said he’d think about it. He sat on it for a few days, he says, in which time he saw a mugshot of a man wanted in Memphis that looked like Anthony.
After calls to local law enforcement, he found himself talking to Detective Barry Clark of the Shelby County, Tenn., Sheriff’s Office and the federally deputized Memphis Cargo Theft Task Force, who, working with Miller and his Nashville-based carrier’s personnel, arranged to draw out a team of two thieves to a sting in West Memphis, Ark., next to the dog track and casino in the area of several truckstops off I-40.
“We ended up letting [Miller] take it to the destination, drop it, leave, and sure enough, the crew ends up showing up and taking it. It is a theft,” says FBI Special Agent Torrence White, “even though the driver was involved and had knowledge of it.”
“The crime,” says task force member Detective James Harden, “was committed before this even occurred. This is proactive law enforcement.” Harden likens this sort of operation to using a sting trailer strategically in an area known for a particular pattern of theft.
Police followed “Anthony” with the stolen load of copper across I-40 into Tennessee, where arrests were made.
And that $50,000 Anthony promised Miller? After Anthony finally showed up just as Miller and task force police were about to call the whole thing off, “We talked a little bit, then we went across the street behind this motel [at the dog track],” Miller says. “We dropped and hooked, he left and they went on their way. He said that the guy that he was dealing with had died a couple days before he got down there and that the money would be there later, but there wasn’t any money at all. I knew right then that that was a lie.
“I always wanted to be able to help guys like James and Barry. I don’t mind helping them. I just helped get one guy off the street. I wish I could do more.”
Taken To Task
On the ground with the Memphis Cargo Theft Task Force
By Todd Dills
A multidepartment, multijurisdictional cargo theft task force has a complicated job. What do they do?
Investigate Reactive law enforcement in cargo theft cases can be difficult, particularly if information provided is not received quickly. The Memphis Cargo Task Force, says FBI Special Agent Torrence White, exists to make gathering and acting on that information with speed possible.
He tells the story of his “trial by fire,” of sorts, when a contact in the trucking community notified the task force’s most senior detective, Barry Clark, of the Shelby County (Tenn.) Sheriff’s office, of a load of Sharp televisions stolen in West Memphis, Ark. “Our biggest issue is the timing,” says White. “Because this stuff is in transit, we can’t wait two or three days for a report. It’s headed to another jurisdiction and could even be out of the country by then.” In the case of that load of televisions, the timing was spot-on and the shipper had a tracking device in the trailer that had not been disabled. The $250,000 load was recovered, and the crew busted, after they passed into Mississippi.
Proactive investigation is more the bread and butter of a multijurisdictional cargo theft task force, though this also can rely heavily on timely information from the public, state and local departments and the trucking/shipping and insurance industries. From drawing out crews with staged trailers to coordinating stings with participating drivers (see “Good Samaritan,” page 24), the toolkit of a task force is broad and varied. “Whatever the situation calls for, we do,” says White. “A bait trailer can work, but you have to know where to take it.”
Network Without the right contacts, even the most diligent investigation can go awry. That’s why, says White, a good part of the Memphis task force’s job is spent reaching out to industry, the public and local and state law enforcement to be sure they can call on other individuals in different jurisdictions for help, if needed.
For instance, they’ve identified mobile, out-of-town crews operating in their tri-state area (Tenn., Miss., Ark.) and conducted long-term surveillance leading to eventual prosecution far from their primary area of operation. “Say we get and identify something out of the norm,” says White. “Two or three bobtail trucks sitting around with a bunch of cars in a truckstop somewhere. We might follow the crew we’ve identified for a whole weekend and nothing happens. A lot of times we decide to stay on them but we know these guys are moving out of the area, so we get on the phone and locate the next area.
Once, we followed a crew an entire week and nothing happened. They go up to Indiana and they steal a load there. The same crew, but the Indiana people have the information and they’re on them.”
Educate The networking efforts of a healthy task force will of necessity include a healthy amount of education of affected parties and local communities in both the importance of cargo theft — from a national security and economic standpoint — as well as the nuts and bolts of how theft crews operate.
“In May we had a cargo theft seminar,” says White, conducted over three days in Memphis in collaboration with the West Memphis, Ark.-based Mid-South Cargo Security Council, an industry-law enforcement partnership group.
Added to detectives’ investigative duties were building and distributing flyers, inviting contacts and planning educational sessions with reps from transport, shipping and insurance groups.
In a less heady example, but one that illustrates the Memphis task force’s educational mission in the driver community, on the scene of the recovery of that stolen load of TVs, which White described as “a sea of blue” when Mississippi state and local patrolmen pulled over the driver of the stolen rig near New Albany, the driver of the getaway rig still had his CB on. What was coming over the radio from truckers in the area? As White tells it: “Those cops! They’re always messing with us truckers.”
Law Enforcement Contacts
Cargo Theft Interdiction Program (California), www.chp.ca.gov/programs/ctip.html,
Cargo CATs (Los Angeles County), www.cargocats.us, (310) 603-3137
Memphis Cargo Theft Task Force, www.midsouthcsc.org/task-force, (901) 747-4300
TOMCATs (Miami), (305) 471-2142
New Jersey State Police Cargo Theft Unit, www.state.nj.us/njsp/divorg/invest, Click “Special Investigations,” (732) 548-7153
New federal priorities Memphis Cargo Theft Task Force members (pictured, from left) FBI Special Agent Torrence White and detectives James Harden of the Memphis city police force and Barry Clark of the Shelby County Sheriff’s Office will soon be joined by an as-yet-undetermined number of other federally-deputized officers as a reconstitution of the task force, begun in 2008, continues. The task force, White says, hopes to gain up to seven more dedicated officers by the end of 2010/early 2011. For a video interview with White, visit www.truckersnews.com.