Owner-op jailed after unwitting participation in cargo theft: Cautionary tale, mitigating risk

Danny Ramon: It comes down to there's no magic bullet. It's going to take a security mindset from the top down and the bottom up.

Todd Dills: Today, right off the top of the program for this Overdrive Radio podcast episode for February 16, 2025 a bit of a hypothetical that's. Well, really not hypothetical at all though. Well, withhold the names pending multiple court cases on their way to resolution. But consider this scenario. You engage with a broker you feel you know is legitimate for a load of copper bound for the Northeast. You drop that load for thousand six hundred do bucks, ultimately get paid, then go on about your business to the next one. Meanwhile, though, the same load is being rebooked, by the same quot unquote broker. Note the qu unquote there. I think its certainly safe to say at this point, the quot unquote broker contracts with yet another owner to move that load further west to the center of the country, whereupon that owner drops the copper and goes along his own merry way. Yet again, the unqu broker now has another operator in his sights for the third move of the copper, this time with the destination in the Los Angeles area. The owner operator who picks this load up, though promised a handsome rate, gets another indication of just where hes bound for along the way. Not a manufacturer who needs the copper for their products, rather the address for what looks to be the kind of place where old cars and trucks and scrap metal of various kinds are all sent to die salvage y. In essence, this operator calls the cops, opening a case that then winds its way back to the origin of the manufactured copper in the rural southeast where rural detective IDS and then orders arrested the owner operator that picked up the load to begin with, landing the driver in jail in his home region where he spent several nights before being bonded out at $50,000. The original crooks thequ broker on the load, likely impersonating ale legitimate entity or otherwise part of a double brokering ring of authorized entities, gets to sit at his or her computer, wherever he or she might be, and keep up the good work. While this owner last summer and his carrier faced scheduled court dates that come and go, ongoing discussion amongst defense and prosecution, all with no resolution. When I first heard about this particular case back late last summer, the arrest had just happened with a September court date scheduled, which was then pushed to October, and none of those court dates held ulimately.

Still there's been no resolution as efforts to untangle the scheme continue. Two other drivers were similarly caught up in it and at least initially charged as well. According to sources familiar with the proceedings. The charges? Obtaining property by false pretenses in excess of $100,000 or more just for falling for a fake brokers representation of himself as legitimate as he schemes with an unknown number of actually knowing accomplices to steal the copper.

I’m Todd Dills and today on the podcast we’ve got a conversation Overdrive senior editor Matt Cole head with cargo theft security firm Overhaul’s Danny Ramon about just what that company is seeing in the so called strategic theft landscape around the nation. Thats the kind of theft I described here at the top, often with multiple layers of deception and misrepresentation involved to unwittingly include entirely legitimate operations in their efforts to steal hot commodities.

Danny Ramon: Fraudulent or deceptive theft right is one of the things where we're seeing the most gains, the most sophistication and the most targeting. so I think that's the one right now that's doing the most damage.

Todd Dills: Deception and targeting have both gotten quite elaborative late too. Overhaul's most recent security alert to its client base as well as press members flagged not just broker ID theft but new levels of sophistication and actual carrier impersonation down to the very fleet trucks of established name brand carriers. A criminal network operating in California is cloning the tractors of well known large established carriers in attempts to gain entry to shipper locations and fraudulently obtain targeted cargo. Quote goes on. Equipment that arrives at loading docks is thoroughly cloned including the correct logos, colors, unit number structure etc. Drivers who arrive also have information about scheduled trailer pickups, mixing traditional fictitious pickup strategies into the advanced cloning of carrier trucks. Overdrive Executive editor Alex Locke recently wrote about a new so called fraud watch system from Overhaul getting in place with shippers to better verify carriers entering their premises and measuring and scoring them in different ways on various security protocol metrics that could at least help put a damper on this kind of theft. Likewise some of the double brokering that occurs some ways what shippers putting the overhaul system in place or doing resembles transportation. Attorney Hank Seatons recommended supply chain protocol from a year or two back, including more robust guard shack checks and sign offs to truly confirmed carrier broker and driver identities. Find in the show notes a link to a past podcast featuring Seaton and the protocol. Likewise Lockys reporting last week on overhauls FraudWatch system. Keep tuned for after the break. Coles check in with overhaul representative Danny Ramon about ways the entire freight supply chain can better work together to battle the problem of theft ball types. Whether those strategic Varieties or tried and true smash and grab trailer break inss and full trailer thefts that still make up a majority of all cargo theft incidents.

Here we go.

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Todd Dills: Find more information about the Howes company's full line of winter and summer formula fuel treatments at howesproducts.com. Here’s Danny Ramon speaking to just how bad it's gotten when it comes to cargo theft in today's world.

Danny Ramon: The state of cargo theft right now is bad. You know to put a little bullet point on it. but if you want a little summary of what'been happening, I mean we've been seeing increases on increases, right? Not just continued to increase, but acceleration. we were hoping at this point that we may start to see a leveling off. But that leveling off is in no way due to capacity constraints on the criminal side is just due to very likely we'reached a saturation of interested parties who are interested in getting organized around cargo theft. Right? But weve seen increases on all metrics of cargo theft in the US and Canada. Whether it's across a certain product type, vertical, they've all seen increases. Whether it's in certain states, they've pretty much all seen increases. they made jockey for position when we were talking about percentage and share of thefts but know outside of California being number one. but by and large theyve all seen increases in theft. And then when we talk about types of theft, how these thefts are performed, we were seeing massive increases in large scale pilagege, which can include the entire contents of the trailer. Pilriagege really just means taking the cargo out of the trailer rather than taking the trailer with it. and strategic theft or fraudulent pickup, what you know goes by several different names but fraudulent or deceptive theft, right. is one of the things where we're seeing the most gains, the most sophistication and the most targeting. so I think that's the one right now that's doing the most damage.

Matt Cole: There has been a lot of talk the last couple of years about fraud, leading to cargo theft. And while you know, obviously that's a huge deal, but the traditional style of theft of either stealing an entire truck and trailer or pilferagege like you were talking about, those are still the biggest. That's where most of the theft is still occurring, correct?

Danny Ramon: Yes, but by a smaller and smaller margin because the scalability of that type of theft is just not the same as it is with a fraudulent ord. Deceptive type of theft where you're using technology. Right. A straight theft which is the traditional theft, you know, where the entire tractor trailer or at least the trailer is stolen from the rightful driver, whenever it's unattended usually is still seeing increases as well. but that type of theft, like I mentioned, you know it's going to take a team of people, you know, usually three to five people, upwards of a week or more, especially if you're counting intelligence gathering on there and it's going to take at least a week or more to capture one trailer to steal one trailer of product. Whereas if you know what you're doing, if you've got a couple of you industry contacts on the bad actor side, you can steal dozens of loads in a day from behind the safety of a keyboard where no one's ever gonna see you. You're never gonna come into physical contact with a stolen product. and with the proliferation of E Commerce, you know, you can drop ship that to an E commerce warehouse where it just gets intaken into inventory, shipped out as it's ordered and you're collecting 100% of that profit. You know, you didn't pay for that product. 100% of what you're charging and receiving is then profit margin. So early on the industry widely referred to this genre of theft as fictitious pickup. And that's because when we first started to see this type of theft in the industry and we're talking you know, 10, 12, 15 years ago, fictitious pickup was what was being experienced by and large. And that's very much a social engineering type of theft where somebody has some inside information about you know, AVC Trucking is supposed to pick up this load at 4:00 on a Friday. Well you know what, we're going to show up at 2 o'clock on Friday pretending to be ABC trucking and saying hey you know, we're just trying to get out of here before rush hour, help me out. You know and people would often help them out and something like that would often gain them ideally a weekend's worth of lead time. But even if they only got a few hours worth of lead time, that was all they needed. now you know, we've had to broaden the category to strategic theft or theft by deception, theft by fraud, because of the highly varied methods that they use. And they will stack, switch and stack and mix and match these different MO based on the target that they're pursuing. Because they're intimately familiar with all of these logistics operations. they are familiar with the processes and procedures at the origins that they're targeting. They're familiar with the processes and procedures with the destinations if the destination is going to be involved in their scheme. But some of those schemes can involve falsifying paperwork, the bill of lading, which ends up then being the proof of delivery. You know, technology is advanced to the point now where you can scan and edit a PDF on your phone, and then, you know, you send it to somebody, have it printed out and you've got a new bill of lading for that truck. You know, and producing a new bill of lading for a trailer full of goods is essentially laundering that freight. Because you can mask the original origin, you can mask the intended destination, you can change piece counts and weights and seal numbers on there. So you know, maybe if a destination doesn't have processes in place to check digital Bols or blockchain enabled Bols from the shipper, they're going to take the piece of paper that the driver hands them and that's gospel to them. You know, if, if that piece of paper says there's supposed to be two pallets, on this 53 foot trailer, that's standard practice in some parts of the supply chain. Right? So they'll open up a 53 foot trailer and say two pallets. Cool, that's what we're supposed to see and everything's fine as far as they're concerned. What, when that was actually supposed to be a full trailer with you know, 20 plus, 40 plus pallets on there.

Matt Cole: The FMCSA is you know, trying to revamp its registration system with an effort of, of stamping out fraud a little bit. from what you've seen so far, do you think those efforts are going to make any difference in the theft world?

Danny Ramon: It's absolutely going to make a difference, in that, you know, they're going to close some of the low hanging fruit loopholes as it is, for these criminals that These criminals are able to exploit, but what it's going to do and by the time these measures are implemented, these criminals will have moved on to bigger and better tactics. They will have come up with more sophisticated schemes. but that does not mean that we should not take these steps that the FMCSA is going to take. You know, these steps that they're going to take, hopefully including, you know, transparency towards the private sector. When we're looking to vet carriers, we need a lot more transparency into the data that the FMCSA has in order to be able to do that effectively. if they do that, if they're able to give us those tools, I think that could actually make a really big difference in the supply chain security landscape.

Matt Cole: In this fraud landscape is the type of commodity that's being hauled. As important, as it used to be. you know, if I'm a carrier hauling certain things, does that matter as much as it used to?

Danny Ramon: It absolutely does because these thieves are after certain products. But what doesn't matter the way it used to is particular is exactly what products they're pursuing. because it's not necessarily about a cost dense product the way it was five, ten years ago now, it's about what they can get for. It's more about demand for that product. How quickly can they liquidate it? because as I mentioned, you know, it used to be if you were, if you were performing straight theft, stealing an entire 53 foot trailer of like product, chances are you're operating within a criminal network where one of the layers in that network is a fence. So that fence is then going to liquidate that entire load all at once. Which when you do things like that, you're not getting anywhere near retail or even wholesale value for that. As a thief, right. As a thief you hope you can get maybe 10 or 15% if you're lucky. now if you look at the way things are going now, like I mentioned with E Commerce, sites and the ability to just ship overseas, in bulk to legitimate buyers over there, buyers who think that they're buying legitimate goods, is increasing the profit margin. So all of a sudden it's not necessarily how cost dense the product is, it's how in demand it is, how quickly it can be moved because the thief is going to get a much higher margin for it. I mean a great example of this is you look at 2020 when all of a sudden we had dozens of truckloads of paper towels and toilet paper being stolen. Not at all. Costants but in demand.

Matt Cole: What does Overhaul anticipate looking into to the next year here?

Danny Ramon: Yeah, we, we're hoping that the, the criminal networks that are already involved have kind of reached their capacity right now. That doesn't mean that there's not more capacity for more criminals to get involved. And I believe that there is capacity for that and I believe we're going to see that how extensive it's going to be, how quickly it's going to happen, I don't know. But what I do know is that we're going to see an increase in a development in the sophistication, in the techniques that these cr ###inal are using for theft by fraud and theft by deception. they're going to come up with new tactics. a lot of it I have a feeling is going to involve falsifying paperwork foragg paperwork, doctoring paperwork. because there's a lot of things that can be done around that that can throw people off the scent when you're investigating or when you're trying to prevent a theft.

Matt Cole: Trucking companies, it seems like especially with the falsifying paperwork, there's only so much they can do. So you know, they get the paperwork to go pick up a load. If somebody shows up for them with, with false paperwork and takes the load, you know, the trucking company doesn't have anything to do with that. But what are some things they can do to try to mitigate their risk here?

Todd Dills: Danny Ramon's answer to that question in some ways points to the limitations on trucking company'ability to mitigate risks of fraud enabled cargo theft themselves. Other than keeping the fullest extent of awareness you can manage about you when you're working with, with brokers of any sort over the phone. Are they who they say they are? They appear to be on paper to be 100% legitimate brokers, authority active and with a long history, well known name to you and etc. Ask yourself just how sure you are that you're talking to an actual person that'with the company not just impersonating them to gain access to a shipper load. Otherwise Ramon suggests in what follows, owner operers can get prepared for ID verif_ification protocols themselves at shipper facilities and more vetting by both brokers and shippers. Load tracking too wonderful, right? At the same time, when it comes to strait theft, as Ramon will go to elaborate, there are certainly plenty of ways to avoid it. Starting with the old rule of thumb about not stopping for 250 miles after you leave a shipper destination to increase the likelihood you won't be followed by the would be cargo thieves.

Danny Ramon: There is no silver bullet. There's no one thing that's going to fix everybody's problem. I really wish there was. It make my job a lot easier. Right. but it comes down to, you know, maintaining your carrier relationships, updating records and making sure you've got a verified point of contact within each of those carriers. And then beyond that, really having a culture of security at the loading dock, making sure that everybody's being vetted properly when they come in. Is this the driver that we were supposed to receive? Is all the signage correct? Are there any red flags like is the license plate zip tied onto the grille at chest height indicating that maybe it's changed three or four times a day? there is that coupled also with a magnetic placard on the side of the tractor indicating that that also might be switched out three or four times a day. Look at the trailer. Does it look like it's had markings spray painted over and new markings put on top of it? look and see if the bolts on the back of the trailer have been replaced with ear. The rivets have been replaced with nuts and bolts because that means that they can open it without tampering with the seal. You, there's all sorts of things you can look at, but it comes down to making sure you know, you're giving your freight to who you think you're giving your freight to. Beyond that, the only thing that can help you is going to be real time visibility. You need granular visibility into your supply chain to be able to identify patterns of theft, or patterns of behavior that indicate theft or fraud while you still have the opportunity to recover it.

Matt Cole: And as far as the, the truck drivers go, I know the rule of thumb kind of used to be, I think it was 250 miles from your pickup location. you know, try to try to make sure you can get at least that far out. Is that still, considered best practice? or does it matter anymore?

Danny Ramon: I mean, a little from column A, a little from column B, it is absolutely still considered best practice. That is still, you know, when, when straight theft is practice, it is most often practiced by being followed from origin until it is, until it stops and is left unattended. and if it doesn't happen within a certain amount of time, there's a fair chance those thves are going to turn around and go back and Try and find some more low hanging fruit. That being said, situational awareness is key because it differs where you are and what you're hauling. for example, coming out of California, you know you hit 200 or 250 miles right as you crossed a state line into Arizona. We've seen a massive explosion in thefts in Arizona specifically for trucks that are leaving the LA base in the Inland Empire area. Because you know, for several decades at this point there's been a massive price difference between California and Arizona which has caused the truck stops just across that border on the Arizona side to have some really fantastic amenities for truckers. Which means it's a very desirable destination. Well the thieves know this, right? So their networked, what they're doing is they're setting up scouts at the origin sites who will identify targets, communicate the information about these targets to their accomplices who they have waiting, you know, in Lake Havasu, or in Kingman, Arizona, where a lot of these high amenity truck stops are and they're going to pick up the trail there. That in effect almost creates a new red zone starting at the California, Arizona border. Operationally you know, we can't realistically ask people to not stop from LA until they get to New Mexico. And even if we did, you know, considering the way these stuffs are happening, that would only move the hotspot to New Mexico you know eventually were kicking the can at this point. So really it is, it comes down to theres no magic bullet. Its going to take a security mindset from the top down and the bottom up to make sure that youre freight is secure coupled with all the layers that you can afford to install on your supply chain. Top Most being visibility so you know the location, the condition, the whereabouts of your cargo at any given time.

Todd Dills: As noted at the top. Read more about Overhaul's new vetting and security system being implemented at some shippers. Likewise the supply chain protocol of transportation attorney Hank Seaton Via links you'll find in the show notes. Big thanks to Matt Cole here for his work and here'a big thanks to you for listening. Safe to say we'hear much more about the subject of cargo theft Moving ahead. Stay safe everybody.