Transcripts For CSPAN Law 20240706

The committee on Homeland Security comes to order. The purpose of this hearing today is to evaluate the uptick in retail crime in the United States. And your testimony. I recognize myself for Opening Statement. Good afternoon. We welcome you to todays important hearing on organized retail crime and threats to public safety. The topic of the hearing is the issue of organized retail crime , which has been rising throughout the committee, demonstrating a threat to and subjecting employees and customers to real harm. As Many Americans flock to stores to complete holiday shopping, Large Organizations are exploiting dashed to carry on an unprecedented spike in retail crime. Generally it involves two or more people obtaining items through theft or fraud through criminal enterprise. This is not the same thing as petty theft. Or shoplifting. This involves multiple events across stores and jurisdictions , further complicating efforts for Law Enforcement combat these crimes. We have reports that transnational groups are taking advantage of our open borders and they are engaging in retail theft. These criminals do not show any bias when selecting targets and this crime occurs across a wide spectrum from big cities to small towns and even rural areas. Organized retail crime is overblown some say but that is not even close. It is impacting every one of our districts. As many of us have seen, retailers are not overhyping the threats or challenges posed by the activity. They are taking steps to make sure to ensure the staff and products. They place common items like baby formula and detergent behind antitheft barriers. In washington, d. C. , where the Progressive City Council has implemented soft on crime legislation that has emboldened criminals to run rampant through the district. One cvs has resorted to displaying tissue paper and rolls of toilet paper as photographs, not the actual product, to prevent theft. In situations like this we must look at the Immediate Impact on families and consumers. This right here directly drives away somebody looking to buy diapers and formula at a Neighborhood Store or a family looking to quickly grab over thecounter medicine for a loved one. These chaotic and calculated robberies pose a risk to employees, customers, and store owners. There is a multifaceted domino effect on communities as well as the workload that occurs on Law Enforcement. The National Retail federation, which will be participating in the second panel today, surveyed Asset Protection professionals and found that 90 indicated that organized retail crime is more of a risk now than it ever was. Businesses of all sizes and all locations from Big Box Stores like home depot, target, cvs, walgreens and many others to momandpop shops are all worried about these alarming trends. They are sounding the alarm. Some of these cases have turned deadly. Just last week a Security Guard at a macys was fatally stabbed by a man attempting to steal merchandise. A second Security Guard was also injured. According to reports the suspect was discovered to have a history of incidents. At this macys location alone, they filed over 250 reports of retail theft in one year. Last year at a home depot in hillsborough, North Carolina an elderly employee was assaulted by a man attempting to steal a power washer. Mr. Razor, who is 82 years old was violently shoved during the theft and later died of his injuries. Sadly these incidents are not isolated. Similar tragedies have occurred across the country, notwithstanding that has included damage to storefronts. Organized retail crime is also responsible for financial losses to retailers. As a result they have been Closing Stores in certain locations and that creates a negative impact on the communities that they serve and it kills jobs for americans. According to a report, on the impact of organized retail crime, nearly 70 billion of goods was stolen in 2019. On a micro level call walmart has stated that it loses nearly 3 billion per year in u. S. Revenue due to theft. The severity of largescale left has led walmart to close several stores and has a raising of prices affect nationwide. Reports indicate that walmart plans to open a police force base within one of their stores. Target recently announced it would be closing nine Stores Across four cities. New york, seattle, san francisco, and portland, due to concerns about employee and customer safety from violence tied to organized retail crime. Part of the challenge in addressing organized retail crime includes the high theft threshold that have emboldened criminals to participate in organized retail crime. They pilfer items below the threshold for felony charges, recognizing that those are typically not subject to prosecution in certain jurisdictions. Criminals know that they will be released under week bail reform laws. They proceed to engage in similar or more severe criminal activities without encountering consequences. I look forward to hearing from the District Attorney who will be the next president of the national District Attorneys association on the Important Role that prosecutors play in the safety of communities, including addressing the challenge of retail crime. I look forward to this earring is an opportunity for a partisanship to come together and agree that we have a real issue. And if so, what can we be doing at this level . This surge in retail theft is more than just teenagers looking for a thrill. It is an abuse of soft on crime policy and evidence of a deeper rooted issue driving crime and fear. We have a distinguished panel of witnesses testifying today, including a federal panel of witnesses to investigate efforts to combat organized retail crime. We will hear from a second panel of witnesses in industry and State Government about their perspective on this challenge. I would like to see you go to the witnesses with us and i look forward to the discussion. I know recognize the Ranking Member and my friend. Thank you for working with us to call this earring on retail crime. Many of us have heard from retailers concerned by crime. The hearing today is to explore the scope of the crime and to determine how to best respond. Crime overall continues to be at historically low levels and has fallen even more in recent years. According to the fbi, a Violent Crime rate across the United States has fallen by more than half with homicides falling 35 and robberies falling by 76 and burglaries falling by 76 . The trend continues to this day. Violent crime decreased under 22 compared to the previous year. However, we must strive to do better to ensure that all americans are safe in their homes, schools, and neighborhoods. We have heard reports of organized retail crime becoming more prevalent and that leads us to todays hearing. We need to understand the nature of organized crime and the best practices for ending it. We are not talking about ordinary shoplifting committed by individuals working alone. We are talking about large organized groups who engage in systematic thrift of theft of retail goods and the resale of those goods for financial grime. It does not just impact large retailers. It impacts momandpop shops and retail employees. Beyond the important concerns about safety, these crimes raise cost for american consumers. Every time esther is robbed of products, they have to hire more security, replace broken windows and install Security Systems. Some of those costs will be passed on to shoppers. It is important that we get to the root of organized crime to keep people safe and lower costs for people across the country. This bipartisan hearing is a chance for us to hear from leaders in retail and from federal Law Enforcement agencies about their efforts to combat organized retail crime. I want to say you could to the panel is for joining us and without of john to objections, i would like to yield my remaining time to miss titus. Thank you member magaziner for yielding. I have been deeply involved in this for several congresses and it is one of the most talked about issues in business, Law Enforcement, and stakeholders. Eyewitnesses myself. I was at a walgreens in my district and we held a roundtable with representatives from Law Enforcement and business, including home depot. I agree with all that has been said before. We know that consumers and employees worry about their own safety. They worry about convenience when shopping and they worry that they are going to get caught up in one of these schemes or operations while they are out there during a holiday season. In addition, the retail crime but is organized has considerable monetary effects on the business and on our communities. In nevada, the organized Retail Crime Association estimates that in 2021, retail product that cost the state economy about 82 million. No community is immune. From the suburbs to the innercity to big business and small business, and it is particularly troublesome in a urbanized areas like my district downtown las vegas. Retailers have a strong presence there and they make a contribution to the economy and they are targeted. The bill that i have introduced combating organized crime is bipartisan. There are 47 republicans and 47 democrats and every democrat on this committee is a cosponsor. I want to thank them for their support. This hearing will highlight some of the trends around retail crime and it will underscore the need for federal action to allow dhs, investigators, and prosecutors to have the tools that they need to go after this organized crime and the associations, organizations, and activities that are tied to it behindthe scenes and many people dont even realize. Thank you again for the time and i look forward to hearing from our expert witnesses. I yield back. Opening statements may be submitted for the record. I am pleased to have two distinguished panels of witnesses here today on this topic. I ask that the first panel rise and raise the right hand. Do you solemnly swear that the testimony you will give before the committee on Homeland Security will be the truth, the whole truth, and nothing but the truth . Let the record reflect that the witnesses have answered in the affirmative. I would like to introduce the first panel. Mr. Michael krol is a Homeland Security investigator in boston massachusetts. Mr. Jason kane is a special agent in charge of the u. S. Secret Service National district. Finally, mr. Josi perez is Deputy Assistant director of the transnational organized crime, Violent Crime, and Operations Support section of the fbi investigative criminal support division. Thank you for joining us today and thank you for your service to this nation. I would like to recognize the witnesses. I know you have written statements. Please give it to five minutes. Mr. Krol, you are now recognize. Distinguished members of the subcommittee, thank you for the opportunity to appear before you today to discuss global efforts to combat organized retail crime and organized theft groups. It is the largest Investigative Agency within Homeland Security, we have unique authorities and an investigative mandate which impact our National Border and Economic Security. Our 6800 special agents are stationed in 253 domestic field offices and 93 international offices. While being supplemented by nearly 4000 state, local, federal, tribal Task Force Officers including 14 specialized and vetted transNational Criminal investigation units. The hsi combating Financial Crime and investigating cybercrime. Preventing crimes of exportation and victimization and upholding fairness in global trade and protecting National Security. The unlawful activity associated with organized retail crime intertwines with many of these aforementioned priorities and represents an area of our investigative focus. In 2022 c. O. P. Retail theft was responsible for 72 billion in losses according to the retail federation. In response, hsi initiated operation boiling point to communicate the severity of systemic theft. Operation boiling. 2. 0 is a multitiered strategy focused on integration of efforts to enhance public and private partnerships. Number two, creating efficiency of scale in investigative lee dissemination. 3 using this information to disrupt and dismantle affiliated organizations and finally, using hsis global reach to engage in a Robust Campaign to inform and educate consumers and industry about this threat among others. It is widely recognized that 21st century criminal networks diversify their criminal portfolios to increase profitability and influence. No longer tied with a single criminal scheme or enterprise, it is not uncommon for these groups to be affiliated with networks that perpetrate financials fraud, Identity Theft, human trafficking, illicit trade, money laundering, narcotics and weapons trafficking, among others. One thing remains constant. Organized theft groups must the origin of their illgotten gains. The use of traditional trade methods remain. At third Digital Assets in currencies can be used with relative ease to facilitate the immediate movement, concealment, and laundering of illicit proceeds. Recognizing the complexity of this finance, hsi collaborated with to publish it out for Law Enforcement investigators and Financial Crime professionals to help combat orc and ot g. Laundering training including moneylaundering associated with orc. Using existing infrastructure to support our efforts, we coordinate orc investigations across the full spectrum of Law Enforcement and private partners. This past year, mlbc had requests from state and local Law Enforcement. This information led to a doubling of each investigation which lasted as a yearlong. As we continue to see cyber m. A. Told crime, Identity Theft, complex global trade practices and other more technical methodology used in organized retail problems, they attacked this threat had on. Thank you again for your support of a chase i and the opportunity to appear before you today. Smacked the chair now recognizes mr. Kane for your Opening Statement. Thank you. Distinguished members of the subcommittee, thank you for inviting me to testify in the current investigative capabilities and how we may be of help in addressing organized retail crime. As one of the nations original investigative agencies, this includes conducting criminal investigations to protect the public, and infrastructure from criminal exploitation. Overtime, these have evolved from civil war to crimes that have become popular in the 1980s. Today, we have the authority to safeguard Payment Systems from criminal exploitation, even when those activities are becoming an increasingly international hr. The focus in respect to combating organized retail crime, we are providing shared resources and tools. We ate our partners for the specialized ability to track and seize illicit funds, often in the form of Digital Assets between criminal organizations. The secret service has the exceptional record of disrupting Transnational Criminal Organizations and we are dedicated to keeping up with the pace of technology to catch these cyber criminals. Have spent 2. 6 billion in 2022. These losses are victimbased such as compromises, pandemic related fraud, romance scams, and the dark marketplace. Congress has renewed its commitment to the National Institute by passing legislation that allows us to continue into fiscal year 2028. We must. One of the ongoing efforts of the Cyber Task Force which is directed by congress is to promote working environments. These task forces are in 42 offices across the United States. Through them, we were close with the u. S. Attorneys office to ensure our partners have the most relevant information used by organized criminal groups. Are well established and trusted relationships with Financial Institutions in combating financial currency and involving organized retail crime. We are fully engaged with our partners. This partnership is essential to fulfilling our mission. These are crimes of opportunity criminals exploit this. Efforts to stay had. Our efforts are paramount to preventing future crimes. While organized criminal crimes are not evidence based on the report of annual loss of over 100 million. Investigative focus of the secret service is to disrupt and deter criminal activity and recovering funds from americans to ensure those of criminal exploit are essentially prosecuted. Cyber enabled crimes are often transnational and multijurisdictional in nature. Based on the current trance related offices the cyber symbols should help to address organized retail crime. One is resourcing. It is essential to Law Enforcement possibility to investigate these crimes. These must be consistent. Prioritize in identifying and seizing assets from financial loss. Criminals can enjoy their profits or there would be no crime. Continue to strengthen the ability of stakeholders to investigate crimes by investigating local Law Enforcement and federal programs such as secret service, national computer, et cetera. The spell collaborates with relationships necessary throughout organized retail crime and other Cyber Network crimes. Partnerships between government and the private sector are essential. Build trust before you need it. This helps build a reflective sponsor lawenforcement. Finally, they control Law Enforcement activities to keep pace. This team has worked tirelessly on behalf of the American People and we continue to maintain our standings on this. We appreciate your partnership and we will offer up any questions that you have. Thank you. Thank you, mr. Kane. The chair now recognizes mr. Perez for your Opening Statements. Good evening members of the committee. It is my pleasure to be here today to speak you on organized retail theft or specifically the retail theft program. I am mr. Jose perez. I have various programs including the violent gang program, crimes against children, and specifically for this committee transactional organized crime. The fbis long and rich history of organized battling crime helps identify disrupt and dismantle. Criminal organizations are diverse and employ a myriad of criminal activities including trafficking, narcotics, firearms, fraud, and major theft. We are aware of the continuing trend of organized theft. We prioritize efforts to combat this threat by working with our Law Enforcement partners to disrupt them, dismantle them using the enterprise investigation, and employ sophisticated investigative techniques. Retail has been it consist mostly of several state crimes which have quickly involved into activities you to proliferate organized transnational crime, across datelines or even internationally. When illicit goods or proceeds from retail crimes are used to fund other transcriminal activity. These svi partners at state local, and Law Enforcement throughout the country combat with Violent Crime and organized crime. They lead several taskforces across the country in combating these organizations including transportation of stolen goods. Some of the challenges with investigating organized retail theft includes shoplifting, which are immediately not reported to the fbi. And may not include connections to transNational Criminal organization. They share intelligence on crime trends and patterns and create Better Networks to identify criminal actors. This past april, the fbi task force in boston arrested Seven Members of an organized theft crew and the organization resulted in collaboration with over 70 Police Departments throughout the new england area. Several members of the crew were arrested with connection with theft and robberies including catalytic converters and cash from automatic teller machines and itemized jewelry stores. They were responsible for an estimated 20 million in losses throughout the massachusetts and New Hampshire area between 2022 and 2023. Several of these defendants were convicted of the fbi continues to partner with state and local agencies across these cases. We also dedicate resources towards retail theft through things like our authority to identify hobbs act. This is important for the community when the theft is facilitated through violence. These crimes might have a lower financial loss associated with them but the impact on the community and commerce is significant. The fbi actively participates in Retail Industry and private sector partners. We attend raise partners such as the National Federation conference. We make outreach efforts for our office of private sector and offices of private engagement at you are fbi headquarters in our 56 field offices across the country. These are important to maintain active information, communication sharing, and between the fbi and partners. The fbi also focuses on investigating and disrupting complex theft schemes involving targeted retail theft of high dollar items such as sophisticated fraud schemes and cargo loads. We work mostly with the private sector to develop a Strategic Initiative and addressed the growth and cargo theft and supplychain theft. In march of 2023, they reported a 600 increase in strategic cargo theft. Some of these cargo theft schemes included Identity Theft and fraud and business compromise. The fbi has also initiated an initiative targeting south american theft groups and evolving groups, from chile and other south american countries explain things like the Visa Waiver Program and visa entries to return back to the countries and share some of the proceeds and serrett some of the proceeds internationally. I am looking forward to answering any of your questions. Thank you, mr. Perez. Members will now be recognized by security for their five minutes of questioning. Additional questioning may be called after all members have been recognized. I recognize myself for five minutes. First, i appreciate this service and what you will do, and especially your partnership with the state and local levels. I think i want to start into this by trends and ask each of you quickly are there geographic areas or cities that seem to higher rates of organized retail crime that are being impacted . I will start with you, and we can move on. Thank you, sir, for that question. We need to block criminal transaction organizations now no longer tied to a scheme or enterprise. What we do see is organized retail crime groups involved in certain, you know, methods and methodologies. I think they are driven by greed and opportunity, and not so much by region. Mr. Perez, any regions you see are being impacted . I would say no areas in particular. I agree with the act and they are geographical. They go where these can be exploited. For example, gas pumps. I95, there was no direct location. Mr. Perez, similar comments from offices around the country. We have nine major task force offices. They really very and reach from los angeles, memphis, pittsburgh, and we have established a organized Crime Task Force as well. This is applied by our local field office. I cannot speak to one area more than another. We have seen theft of fuel in west texas and certainly in your area that are significant. That leads us to establish local partnerships to tackle some of these unique threats. Have you seen state by state or jurisdiction by jurisdiction or action from d. A. S that have led to increases . Lets say the raising of a threshold. Has not had an effect on the number of organized retail crime events that you see . Sir, i cannot speak to that. Any other on the panel . I am sorry. Okay. Lets go to the secret service for mr. Kane. What does the secret service see is the largest threat to Financial Transactions for the be credit cards, gift cards, u. S. Currency. Talk me through that. With the holidays hitting, highvolume and places like Convenience Stores and gas stations seem to be the best because they can get a lot of numbers very quickly. Second, kind of on the edge of new things are what they call pushing, which is like the scanning of the barcodes which are not actually qr codes. They will take you to a site and ask you to apply information personal information and the gift card fraud which is happening more prevalently where people are taking gift cards and re encoding them on the back and activating them with limited amounts of money but when you buy that gift card to our loading the dollar up. It is a little more topheavy on the retailers. At the local level, on the locals, again, atms sliders. They need to make sure those devices are legitimate as best they can. It is best to always give it a tug. Mr. Krol, we are talking about operation boiling point. This is an organized retail crime trend. Many investigations has fostered field Office Conducted . Any red tape between partnerships at the state or local level . Thank you for that question. We do have active investigations going on now. We do not have an active number. But certainly those international in scope, and ones that involve our federal, state, and local partner spread throughout new england. I do not see any red tape. What i do see is a necessity to prioritize the myriad of crimes we see as federal agents. We see kind of three tiers of retail crime. One, your single scope. Who may steal out of necessity to your more coordinated groups who might not reach an interest in state commerce. And three, which i think is where federal agents should be, is more sophisticated networks. Those involved in cybernetic crime are in sophisticated technologies. But we do see the gap between one and two between our state and local partners, which serves to your point is. Are these events deterring or scaring the public . Something that is giving the public in deterring businesses from having open sores in different places . Sir, what i can say is obviously, you know, the awareness of the crime has been obviously something that we have seen much more of, whether in the media or Law Enforcement. I think awareness of the crime will help us to attack those networks and make sure we have it impacted. Thank you. My time is expired. Thank you, chairman. And for coming here today. I think one of the things that we are challenged with as we have this conversation on organized retail crime is it is difficult with the data. You know . Chairman krugers question about where this is more prevalent and questions about whether it could be more prevalent over time, which we are hang from the retailers that it is. But the data is spotty. I want to ask each of you, are you able to get as agencies a day to the immediate from local retailers to help you anticipate the trends, and if not, are there things we can be doing at the policy level to help fill in the state the gaps to help wrap our hands around this situation and how to deal with it . So i will open it to any of you. Take you for that question. To that point is why we established operation bullet. 2. 0. Four pillars to establish and enhance public and private sector partnerships. You know . We have dissemination but also acquisition of information that is going to help us disrupt those organized retail crime networks. Then lastly make sure that we are, you know, enhancing our Public Awareness campaign. I think to that point is understanding the data is understanding the threat in Law Enforcement. I think they speak on behalf of secret service and fbi seeing the more information we have the better prepared we are to address not only existing threats but emerging threats that maybe we do not see to that point. Certainly cyberenabled crimes are something we are significantly concerned about in Network Intrusions and your data breaches. And that information that may not be public is certainly a concern to Law Enforcement, and i think it could be a benefit to our private sector partners to help mitigate. Sir, one of the things with our facility is we will train 5000 people for Law Enforcement agencies this year. Those could now become the parameters of fraud. You know, what is happening in those sectors. My cft if, that is what they are telling me very robustly. We should apply some resources. We have honestly talked about it. Money laundering. Back in 2023, it was something that was suggested which helps us go after unauthorized money laundering. We believe if you can hit the pocketbooks of bad actors that they will obviously find a new crime to participate in. That is the thing. Similar to what my colleague had said as far as collaboration, the fbi nationally brings work to bring that information to Law Enforcement or criminal Justice Information service and through our program to collect that data from Law Enforcement. That data is only as good as what is being put into our database if you will. So we try to expand that to our field offices. We sit in a colocated environment with our state and local partners and at times will embed with them and in Police Departments around the country to really be on the frontlines to receive that data. Additionally, in the outreach pieces i mentioned, we are towards private sector engagement or National Security line councils. The program really has direct contact and a reach with our private sector partners to include the Retail Industry. Also, efforts we do out of our Major Theft Program to really be part of that discussion. Particularly to receive what that need is from the retail companies. Thank you. With the time i have left, one more question. As we mentioned earlier, we are not talking about individual shoplifters here. In many cases, individual organizations that are on that scale for retail. They are doing this to make money online or what have you. So can you talk a little bit about what your agencies are doing at that point of resale to try to disrupt what these organizations are doing. I would think often times it is easy to consummate the retail point and at the store level. Thank you, sir, for that question. Might i just add that the inform act will help us understand those that are involved in ecommerce platforms and their Party Sellers and resellers. That is really something at our Innovation Lab and across our Financial Crime center that we are working very closely with. Obviously with the Computer Forensics part, we work with marketplaces for a lot of things. Those are great areas to what i called make your case. So that is obviously those two key elements that are helping with that point that you just made. Similarly, we focus a lot on the darknet. Narcotics, weapons, and stolen goods. The darknet. We will look at those cases. Particularly the retail portion will look at that en masse. We will utilize Communication Development to look at where that merchandise is coming from. We look for ways to identify those networks and disrupt them to those patterns. Decoders to identify the money moved as well. And to note the sale goods helps us identify where this is. You are overtime. The cheonan recognizes the gentleman from North Carolina. Our lax local prosecutorial practices according to the organized retail crime that you described. Sir, again, i cannot speak to that. We work aggressively within the federal scope whether it is for interstate transportation of stolen goods are things like the hobbs act. Those are violations we will investigate aggressively at times. Are sometimes we cannot charge a case federal, we will aggressively. Our relaxed Border Patrol policies . I cannot speak to that either, sir. Can either of you speak to it . Sir, what i can say is we are certainly laserfocused on criminal networks and those networks that impact our Economic Security whether they reside internationally or domestically. I think we are between our border and security taskforces, overseas in our national presence, we are laserfocused, both on, you know, your traditional arrests and convictions in your nontraditional which would be your cyber intrusion medication. And obviously other more complex methods to investigate transnational crime. Mr. Kane . Sir, we have obviously had several cases to your point. Actually, we had several cases with hhi in california. The groups are coming in and kind of subverting the process. We have problems identifying them. I see it on a limited scale. At the bureau, they just sees it. Have there been reductions in local Police Forces . My impression is at least during the pandemic and following the George Floyd Killing and the issues relating to that that we saw Police Forces decline in sort of a surge in resignations and Police Forces locally. Is that still the case or has there been a recovery . Mr. Kane . As far as resignations, i dont know. I do think there is a challenge in recruitment of local Law Enforcement, and a challenge at our level to get people on the ball. I cannot say it is attributable to the defense. Mr. Perez . I am aware nationally of some decline in recruitment, and that is a similar challenge for us and all the federal departments and Law Enforcement. I cannot speak to as of why. I know the following covid that had an impact nationally. I cannot speak to whether there is an upswing or not now, sir. We recognize the troubles that are state and local partners have in recruiting. That is one area were federal Law Enforcement can certainly lend assistance to our partners where they need it. And i think other nontraditional methods where we are assisting state and local partners whether it is trafficking or other areas. Certainly organize theft groups. We can provide those resources to them to our Task Force Officer program. You know, we have 4000 Task Force Officers domestically. We can help to augment the local departments with data cysts and other information that they might not have available to them. In asheville, North Carolina, for example, there is an enormous loss of police force. Cities around North Carolina are more familiar with that and other cities in the country. And the police forcing. The size of the police force are down from their anticipated numbers. I certainly anticipate the fact that you guys are not really wanting to attribute causes of the problem that they face and are dealing with a death Law Enforcement aspect what you have to do. It does seem to me that while we can help treat symptoms by doing more information sharing at task force and resource division, we have caused a lot of the problem by not sufficiently backing Law Enforcement, and a lot of policy makers have given and make support for Law Enforcement. We have had prosecutors have decided not to prosecute property crimes if we have borders that are uncontrolled and gives rise to cringe National Criminal organizations and bandlike across the country to do these kinds of crimes. We are probably not going to solve those problems until we address those problems. So i appreciate the effort that you bring to the case every single day and others men and women who work under your agencies. Time is expired. We now recognize the gentleman from california. Thank you. I want to follow up on mr. Bishops comment. Data information. 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. The data that we have is certainly something we need to work better on and to understand the with our private and state and local partners. I cannot speak exactly to the differences between i ask that because i want to make sure we are not operating in silos. We are trying to get away from that. Mr. Perez, you mention the chilean games. That was an issue in orange county, california. My d. A. Brought it up to our attention. We brought it up to the feds attention and changed the visa program Visa Waiver Program. We hope this helps with the end result problem. I cannot help but think sometimes we are chasing our own data and we are always a little bit too late. And soap sharing information almost on a realtime basis i think is key to figuring out the patterns, the trends, and what is emerging. From the chili situation, it was romanians who had a problem with this. A lot of groups. But looking at the retail versus the shoplifting varsity organized crimes, you have got crypto. A lot of interesting things working here. But we really want to protect our communities from those losses and protect the retailers as well. We went to figure out the big pictures to figure out solutions. One of our Law Enforcement officers are down. That is a big issue and we have to figure out our solutions to at. You know, the smash and grab, organized crime, retail theft. It is hard to figure out which is which. But if you do not know which is which is even harder to come up with a good solution. I look forward to working with all of you to try to figure this out. Get some real data so based on that data folks appear to come up with good Public Policy and come up with Real Solutions in real time. Let me ask you one other question which is, we have talked about collaboration of the federal, state, and local. What about international . Do you feel like youre getting the information you need from International Players out there . Mr. Krol . Thank you, sir. I appreciate that comment. We certainly are in investigative presence overseas. And working to our host country with transactional criminal social investigative units is very important to receiving information. As you know, are authorities in the International Footprint differs than that in the United States, so we certainly rely on their knowledge and their prosecutors and others to make sure we are receiving the appropriate information and act on them. Mr. Kane . Sir, i believe the information to International Connections we have right now are better than they have been in my 22 years . So they are Getting Better . They are Getting Better. And we have informal agreements with what they can provide and what they can provide us. Certain countries as you know will never work with us but many along the way have been very good to us and very good to our investigations. Mr. Perez . Sir, i would say relations are good. Maybe in a better situation, as well. And strategically, we have well over 60 around the world. We talk about south american theft groups, sir. 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 kidnapped in mexico are held for ransom in mexico usually affects us here in the United States as well. Again, it is not your problem. It is our problem. Offer to work with us any legislative solutions are diplomatic solutions. Let us know. We are here to help. Thank you. We are out of times. The chair now recognizes the gentleman from new york. Good afternoon. Thank you for your services and being killed. It seems that one of the primary hurdles to organized criminal groups is repeatedly targeting retail businesses. It is a difficulty to call a individual or group to incidents across several jurisdictions. Such as patterns rather than looking at each incident individually which fails recognize the told the group may have had and may be taking on a particular retailer. I want to thank the chairman for his work in this committee, and one of the things we have been focusing on in the committees communication and cooperation between different agencies. I spent a career in the nypd, and i think as Law Enforcement professionals, we could probably say that one of the greatest holes in our toll pelt is communication with other agencies. So i think what is important for those 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 could do a better job . Sir, again, i go back to highlighting task force issues. But on things like our safe streets and organized Crime Task Force, we have unique threats and responsibilities, and establishing our major threat taskforces. Separately, the department for the fbi is really our core model for collaboration with communication at the federal and state level. We are working with our partners to actually develop a Strategic Initiative to battle retail theft and funding for communication efforts at the federal and state level throughout the country. Thank you. Thank you. I will now see to at at the center that we see at all federal agencies. That is a great resource for federal and state level. We have other challenges because they do not all talk to each other. However, a lot participate in with the why pd does and allows others issue to talk. That is how we kind of injectables, resources, and that is funded by you. That has been highly successful. 80 of the forensic work i do not even for my agency. It is for state and local agencies. Sir, thank you. Having worked in new york city, i know nypd very well. I can certainly speak to our centers of excellence. Across our Financial Crime, cybercrime, national and intellectual Property Rights center, and many, many others. Innovation lab. They are all Great Centers that provide resources and information to federal agencies. I think what we are doing and need to do a better job of is reaching into the private sector and state and local partners to make sure they understand the Resources Available to them. I think the center we lead is certainly a great example of the Public Partnerships that we need to use to enhance our investigations. You know, i think until we have that holistic view of whole government and private sector on crime, it will be tough for us to attack. So to your point, i think that very often we see that the resources that you guys provide which are amazing are very often i guess from the top down. I guess my question is how can we do a better job of making sure what you mentioned with these smaller lawenforcement agencies. I represent many villages. Some of those villages have their own Police Departments and deal with retail crime a single day. They may not be afforded the same opportunities like the big ones like the nypd or the bigger agencies. What can we do as members of congress to make sure that our Law Enforcement professionals know exactly the resources that you provide, and i guess the secondary part of the question is how can we on both sides of the out work with you guys to make sure that, one, those resources are there and number two, that those smaller ones, even the ones tucked in those small towns who unfortunately are battling these issues right on their main street, how can we make sure they have the information they need to take advantage of the great work you guys are doing . The time is expiring. I am sorry. I would say we need to be nontraditional on our a church. And inserting our special agents into local police arguments, much like we have with our task force program. It is, educate the educator. The trainer. Let them be the best resource for the fbi or atf , or wherever it may be. I think it is a national model. Thank you very much. I would love to follow up with you guys after this. Time has expired. We never can is a lady from nevada. Thank you, mr. Chairman. I mentioned earlier that i had witnessed some of this organized crime and it was in a walgreens. And a person came up with a backpack and you started spraying eyelashes into the backpack. They are not power tools. But they do not sell it directly. Where they sell the drill to somebody who sells his on the internet. So this really is a network. I say, can you see what aconite does . Yeah. He comes in here about once a week but the companies have told us not to do anything about it because we might get hurt or the customers might get hurt and we have all been in stores where you see everything locked down and you have to call the clerk to come over to help retrieve something and cannot just pull it off the shelf. So it is dangerous and inconvenient, and it has costed tax money as well as business profit. Here are the questions of what can we do to help you do your job better. And i would ask you, mr. Kroll, to talk more about operation Falling Point. It seems to me more like Fusion Centers we have in communities with all different kinds of Law Enforcement, First Responders, and the private sector. Nobody has a better eye in the sky to try to address this. And my bill hr 895 will help house a center to combat organized retail crime within hhi, and i wondered if you might comment on how that would help us to bring information together or be complementary to what you are doing. Thank you so much for your longstanding efforts in this space. Understanding i cannot speak to legislation that is still ongoing and has not been signed into law, i can say i have seen a similar model used many, many times before and that model is not new. Multi agency the complexion centers that involve the private and Public Sector and Law Enforcement partners are certainly the best case and best model for us to continue. Operation Falling Point 2. 0 is really recognition of this threat but also trying to take a little more proactive stance to try to identify, you know, what partners need to be in contact with or how to share information with them better or how to retain information from the private sector that we do not already have and then use that information more effectively to target these retail crime and organized theft groups. And, lastly, i think we talk about Public Awareness, but really this is buyer beware. The Consumer Needs to be the best proponent of their money and where they are buying products from. They are really the first line of defense next to our state and local partners. I will say that there is certainly anything we can do to support the consumer and industry and and sure Economic Security. I think that is an important bullet point of 2. 0. Yeah. I think it is an inconvenience and danger of going into a neighborhood where you have a spot that has been attacked a number of times. We are seeing that on the internet and that raises a number of problems. This money is for drug trade and human trafficking. Can you talk about that, mr. Kane . Are familiar or can anyone talk about that with a connection to this . Yeah. Most of the crimes that are under our purview do not result in human trafficking. That is probably more one of my colleagues. Either one. Maam, we do have a human trafficing program. I spoke to the commission earlier. Criminal organizations are diverse and will look at the opportunity to make money whether that is retail theft, trafficking, guns, or whatever allows them the ability to make money. I have not seen a direct correlation between the two. We continue collaboration and sharing of intelligence and collaboration among all officers and workers. Recognizes the gentleman from arizona, mr. Crane. I appreciate it. I want to say thank you to the gentleman on the panel for your long careers in Law Enforcement. I did notice though when chairman pflueger asked if any of you saw any trends in the explosion of organized retail crime, none of you responded with any trends that you guys are noticing. That struck me as interesting. You guys are all really smart or you would not be here. Isnt part of being an Effective Member of Law Enforcement having the ability to spot trends and patterns . Mr. Krol . Yeah. I certainly appreciate your concern and recognize your question. Of course, we focus on emerging threats and existing threats and to truly respond to those like we do every day. I think cyber enabled crime up front is certainly one we are dealing with right now. And data breaches. You know . Especially items and identity. Licenses. Financial information settled on the dark web concerns most of us. All right. Thank you. You think happened maybe a billionaire like george soros spending 40 million of his own money while supporting leftist prosecutors and d. A. S 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 . Thanks for your question. Sorry. I respectfully withhold comment on that one. Smart. Mr. Kane . I have an intelligible answer. Mr. Perez . You think that might be a trend that has something to do with the lawlessness that we see going on in the American Cities right now . Sir, i cannot comment on that. How about lowering that felony thresholds . Do you think that has anything to do with it . Same answer . I respect the fact that you gentlemen have got to be careful. I get it. But you think that might have something to do with the trend in the outofcontrol retail crime that we see . I cannot comment on that as i mentioned earlier. We investigate them aggressively. Okay. Well, to be honest though, mr. Perez, the federal statutes have nothing to do with whether or not you are able to spot some of these trends that everyone in the country knows and understands. Everybody knows what is going on. It is so obvious. Let me give you guys a Little Research i just did up here right now. This is from forbes. Target, claims organized crime for closing nine stores. 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 yields. Yeah . Mr. Perez, picking up on this line of questioning, does the inclusion of a consequence, of a penalty, of a prison sentence, of a fine, deter criminal activity . Sir, that is an opinion. I do not know that i can speak to that. You are with the fbi. If there is a severe penalty, does that prevent a crime from happening . Nothing preventing crime from happening. It may be leverage in the federal system to garner better cases or some type of operation. That leads us to garner a better intelligence. Mr. Kane, do penalties have an impact on deterrents of criminal activity . That will be determined and further cases. Well, i think the point of this is trying to pinpoint why organized retail crime is happening. It is affecting the safety of our communities. When i read the day one memo from District Attorney bragg that says he is directing his District Attorney is not to prosecute several crimes including prosecuting, resisting arrest, and engaging in prostitution and other things and should not be prosecuted as felonies. Does not have an impact on organized crime in the city, mr. Krol . Sir, thank you for the question. What i would say is i would echo their comments. It certainly has a huge factor. I would say that the length of potential, you know, jail time certainly has an impact on a criminals rate if you will, but outside of that i cannot speak what a prosecutor would prefer to see. Time is expired. Yield back. I would like to think the witnesses for your valuable testimony. At this point in time, seeing no other members to question the first panel, it is dismissed. Thank you for your time today. Now invite the second panel to take their seats. On an administrative note, we know we are going to continue to roll straight into this. I will give you a second to switch out and take your notes. 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 but the truth . Thank you. You may be seated. Let the record reflect that the witnesses have answered in the affirmative. Would like to now formally introduce our second panel. Mr. David johnson, Vice President of services for the National Retail federation. In this role, he is focused on Asset Protection, store 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. We start at the parking lot, we train our associates, we train them on deescalation, to be great witnesses, to not engage with bad actors. So while there is a broader fear out there in the environment, i think we have done a nice job of making our associates feel good. Mr. Johnson, i asked the previous witnesses if they have seen trends. Are there cities that have a higher level of organized retail crime . Miss stefan testified that in san diego they are prosecuted, but maybe not in los angeles, do you see trends where it is a higher level of incidents . We do have an annual survey that goes out to our retail members, one of the questions is where do they often see the highest levels of organized retail crime. And we do 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 my fellow panelists in the previous panel, organized retail crime groups prey on wherever and however they can obtain their goods and their dollars. But, if you have a non aggregated penalty day in and day out, 950, doesnt that add to the criminals mindset that they are going to take advantage of that, that they are only going to be prosecuted for a misdemeanor instead of a felony . I do agree with that, our retailers can see that aggregation can play a large role in deterrence where an individual act, and organized retail crime is not a singular act, it is conducted in multiple perpetrators and organized effort. So aggregation can be of great support in this matter. Thank you, last question. Alan brags day one policy that took Armed Robbery from, in some cases, a felony to a misdemeanor, does that embolden criminal activity . I believe that every prosecutor should follow the rule of the law and the law says that robbery is a felony. Thank you, i yield back, and i recognize the Ranking Member for his question. Thank you very much again for being here. I want to dive into the recommendations that you will have presented to the committee and lets start with the Coordination Centers, which several of you referenced and have been piloted in places around the country. I will open this up to any of you. Can you comment on the experience in your organizations with Coordination Centers, what has worked, what are the best practices we should be mindful of as we look to expand this model across the country . Mr. Glenn , would you like to take a crack at it . We have had conversations about participating with them on the Coordination Center 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 know exactly whether a threat has been resolved, and whether we are able to make that school safe, we use it in elder fraud, where we are finally able to track that we had 49 million stolen two 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 solutions is to really know the size of the monster you are dealing with. And mr. Glenn , one of the root causes of the rise of organized 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 be thinking about when it comes to the resale aspect of this . Should the platforms have tougher requirements to know who is selling these goods, particularly large amounts of bulk goods that are highly likely to have been procured through retail theft . Thank you for the question. In a perfect world, long before it is resold, we would not experience the loss. I think the informed consumers act was a great first step, we know theres opportunities with enforcement, we also know theres opportunities with education and we need to continue to round out the needs and the abilities of using the format to help the resale opportunity and put some teeth into it from a prosecution perspective. Does anybody else have a perspective on that . The informed act is a great tool but it needs the people with expertise in order to make the cases. In the old days we had the pawn shops that we put together that you need to show i. D. And other things. So everything went online and really this is why covid shutdowns 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, the tools to work with those platforms in order to bring accountability. I think we all agree that this is an issue that is worthy of our attention in congress and we want to Work Together to try to help you in combating organized retail theft, that is why i signed on as a cosponsor to combat organized retail theft act, and i certainly encourage all of my colleagues to take a look at the bill and do the same. The deals with the aggregation issue and penalties in the u. S. Code, but also we use Homeland Security and doj, some additional tools on the investigative side that i think are very important as well. But, with the last moment that i have here, people are watching, and those of you from industry who are leaders in this space, have adopted some practices at your level of protecting employees or customers. Are there any best practices that you have put in place that you would like to highlight that might be useful for others who are watching as well . What i would tell you is that our process and our policy at the home depot is to make our associate understand risk, and provide them with the tools for deescalation, really making sure they understand how to extricate themselves from these scenarios, and three, to be great witnesses. Teaching people to be great witnesses to what is happening around them can help us then close these cases down because we actually bring all this information together into a processing database for us, we use that information to work with Law Enforcement. Thank you, i yield back. The chair recognizes the gentleman from new york. Thank you all for being here and for the work that you do. Madame District Attorney, im paraphrasing but i believe when the chairman asked the question, your response was that a District Attorney must do everything in their power to uphold the law and someone, for example, is charged with robbery, it should be a felony and prosecuted as such. Obviously that question came about because of the d. A. That we have in new york city, specifically in manhattan, and i know he just mentioned when it comes to retail theft, we are trying to Work Together and i would say that many of us are trying to Work Together but there is a member of this subcommittee who is a very big supporter of that d. A. , mr. Bolden, and theres no question that we are trying to Work Together. But when we see cities like new york, a city that i was a proud nypd detectives for my entire career, those cities are suffering because of policies put in place by democrats. That is without a question. We have in the state of new york, the governor who was a democrat, the state legislature, the assembly and the senate, democrat controlled. Put into 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 their goal to protect and serve, at no point did they have conversations with the men and women 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 that as somebody who has spent a career in Law Enforcement, there are reforms needed but they need to be painted with a broad brush. I want to thank you for saying what you said, and making us all realize that when somebody is elected District Attorney, it doesnt give he or she the ability to rewrite the penal code and get to pick and choose what crimes they prosecute. This has led in places like new york and not just the city, but in places like my district, in the Southwest Corner of long island, where you walk into places like cbs and when you walk in with your family and you grab that basket because you didnt want to do a lot of shopping, but no more baskets. Why . Because people were taking them and filling them up with whatever it is they wanted and walking out the door. Why . Because of the laws that were put in place by the other side of the aisle, there was no repercussions. And it 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 . 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 has been successful in your area that we can do to curtail some of these disasters we are seeing . I think what you are doing here by example, coming together around smart legislation, which has bipartisan support is a great step, but for me in san diego, whenever im fighting battles, i emphasize that public safety, the safety of our children, our businesses, our communities, small and large, that is not a political issue. That is a human issue, that is a human rights issue, nothing will thrive without safety. You take out the police, you take out the Law Enforcement, you take out the prosecutors or you make them for sale for anybody, then you take out the safety. With that, there is just no going back. You cannot thrive as a neighborhood. So, i always elevate the voice of the victim, theres nothing more powerful than hearing from the people affected and being on the ground because that is just avoiding all politics and that is how i handle my region. And you have been a District Attorney for how long . This is my second term. You have been a prosecutor of 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, one question that is never asked by those when they are responding to a 911 call is what Political Party are you from . No Police Report ever shows that. I had some questions, but my time has run out, for mr. Glenn , if we could chat after that, that would be great. The chair recognizes the gentleman from california. Thank you, and thank you to the witnesses for being here today and mrs. Stefan did a lot of work with the california d. A. Association. So, in the few minutes that i have, i want to ask you a quick questions, this should not be a partisan issue, this is about victims. This is about protecting our community. So, the first question to you is, would we be better off funding or defunding the fbi . We need excellent institutions. Like the fbi. Thank you very much. There are some people in this house i have advocated for that. Second, i want to ask you specifically, in san diego, you are the District Attorney in san diego, so right now you said in california, 970 is the threshold. Anything below that is a misdemeanor . Anything above that is a felony . 950. Yes. And, no matter how many times. So it doesnt aggregate, so you go in every day and do hundred 49, it is still a misdemeanor. Has there been any discussions with our legislatures in california to change that so maybe theres an issue of aggregation to consider . There have been discussions but it has to go back into a proposition for the voters. So this was a proposition passed by the california voters, not the legislature itself . That is right, sir. Okay. This is interesting. Lets see what it will do when when it comes to that issue. Mr. Glenn , you are president of 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