[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
PROTECTING CONSUMERS AND BUSINESSES:
CONFRONTING ORGANIZED RETAIL CRIME
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON CRIME AND FEDERAL
GOVERNMENT SURVEILLANCE
OF THE
COMMITTEE ON THE JUDICIARY
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
WEDNESDAY, DECEMBER 17, 2025
__________
Serial No. 119-46
__________
Printed for the use of the Committee on the Judiciary
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via: http://judiciary.house.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
62-401 WASHINGTON : 2026
COMMITTEE ON THE JUDICIARY
JIM JORDAN, Ohio, Chair
DARRELL ISSA, California JAMIE RASKIN, Maryland, Ranking
ANDY BIGGS, Arizona Member
TOM McCLINTOCK, California JERROLD NADLER, New York
THOMAS P. TIFFANY, Wisconsin ZOE LOFGREN, California
THOMAS MASSIE, Kentucky STEVE COHEN, Tennessee
CHIP ROY, Texas HENRY C. ``HANK'' JOHNSON, Jr.,
SCOTT FITZGERALD, Wisconsin Georgia
BEN CLINE, Virginia ERIC SWALWELL, California
LANCE GOODEN, Texas TED LIEU, California
JEFFERSON VAN DREW, New Jersey PRAMILA JAYAPAL, Washington
TROY E. NEHLS, Texas J. LUIS CORREA, California
BARRY MOORE, Alabama MARY GAY SCANLON, Pennsylvania
KEVIN KILEY, California JOE NEGUSE, Colorado
HARRIET M. HAGEMAN, Wyoming LUCY McBATH, Georgia
LAUREL M. LEE, Florida DEBORAH K. ROSS, North Carolina
WESLEY HUNT, Texas BECCA BALINT, Vermont
RUSSELL FRY, South Carolina JESUS G. ``CHUY'' GARCIA, Illinois
GLENN GROTHMAN, Wisconsin SYDNEY KAMLAGER-DOVE, California
BRAD KNOTT, North Carolina JARED MOSKOWITZ, Florida
MARK HARRIS, North Carolina DANIEL S. GOLDMAN, New York
ROBERT F. ONDER, Jr., Missouri JASMINE CROCKETT, Texas
DEREK SCHMIDT, Kansas
BRANDON GILL, Texas
MICHAEL BAUMGARTNER, Washington
------
SUBCOMMITTEE ON CRIME AND FEDERAL
GOVERNMENT SURVEILLANCE
ANDY BIGGS, Arizona, Chair
TOM TIFFANY, Wisconsin LUCY McBATH, Georgia, Ranking
TROY NEHLS, Texas Member
BARRY MOORE, Alabama JARED MOSKOWITZ, Florida
KEVIN KILEY, California DAN GOLDMAN, New York
LAUREL LEE, Florida STEVE COHEN, Tennessee
BRAD KNOTT, North Carolina ERIC SWALWELL, California
CHRISTOPHER HIXON, Majority Staff Director
ARTHUR EWENCZYK, Minority Staff Director
C O N T E N T S
----------
Wednesday, December 17, 2025
OPENING STATEMENTS
Page
The Honorable Andy Biggs, Chair of the Subcommittee on Crime and
Federal Government Surveillance from the State of Arizona...... 1
The Honorable Steve Cohen, a Member of the Subcommittee on Crime
and Federal Government Surveillance from the State of Tennessee 3
The Honorable Jamie Raskin, Ranking Member of the Committee on
the Judiciary from the State of Maryland....................... 4
WITNESSES
Shane Bennett, Principal of Cyber Defense--Theft, Fraud & Abuse,
Target
Oral Testimony................................................. 8
Prepared Testimony............................................. 10
The Hon. Summer Stephan, District Attorney, San Diego County,
California
Oral Testimony................................................. 16
Prepared Testimony............................................. 18
Chris Spear, President and Chief Executive Officer, American
Trucking Association
Oral Testimony................................................. 26
Prepared Testimony............................................. 28
Scott McBride, Chief Global Asset Protection Officer & CSO,
American Eagle Outfitters Inc.
Oral Testimony................................................. 42
Prepared Testimony............................................. 44
LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING
All materials submitted by the Subcommittee on Crime and Federal
Government Surveillance, for the record........................ 49
A statement from the International Council of Shopping Centers
(ICSC), Dec. 17, 2025, submitted by the Honorable Jamie Raskin,
Ranking Member of the Committee on the Judiciary from the State
of Maryland, for the record
A letter to the Honorable Andy Biggs, Chair of the Subcommittee
on Crime and Federal Government Surveillance from the State of
Arizona, and the Honorable Lucy McBath, Ranking Member of the
Subcommittee on Crime and Federal Government Surveillance from
the State of Georgia, from the National Association of
Convenience Stores (NACS), Dec. 17, 2025, submitted by the
Honorable Andy Biggs, Chair of the Subcommittee on Crime and
Federal Government Surveillance from the State of Arizona, for
the record
APPENDIX
Materials submitted by the Honorable Andy Biggs, Chair of the
Subcommittee on Crime and Federal Government Surveillance from
the State of Arizona, for the record
A statement from the Intermodal Association of North America
(IANA), Dec. 17, 2025
A statement from The Home Depot, Dec. 17, 2025
An article entitled, ``Walmart store closings 2024: See the
full list of all the stores that closed this year,'' Jan.
21, 2025, NJ.com
A statement from the National Retail Federation, Dec. 17, 2025,
submitted by the Honorable Troy Nehls, a Member of the
Subcommittee on Crime and Federal Government Surveillance from
the State of Texas, for the record
PROTECTING CONSUMERS AND BUSINESSES:
CONFRONTING ORGANIZED RETAIL CRIME
----------
Wednesday, December 17, 2025
House of Representatives
Subcommittee on Crime and Federal Government
Surveillance
Committee on the Judiciary
Washington, DC
The Subcommittee met, pursuant to notice, at 9:05 a.m., in
Room 2141, Rayburn House Office Building, the Hon. Andy Biggs
[Chair of the Subcommittee] presiding.
Members present: Representatives Biggs, Tiffany, Nehls,
Moore, Kiley, Lee, Knott, Issa, Cohen, and Raskin.
Mr. Biggs. The Committee, Subcommittee on Crime and
Government Surveillance, is called to order.
Without objection, the Chair is authorized to declare a
recess at any time. Without objection, Mr. Correa will be
permitted to participate in today's hearing for the purpose of
questioning witnesses. He will receive five minutes for that
purpose.
I thank our Democratic colleagues for working with us to
get started at 9:00 this morning.
I now recognize the gentlewoman from Florida to lead us in
the Pledge of Allegiance. Ms. Lee.
All. I pledge allegiance to the Flag of the United States
of America, and to the Republic for which it stands, one
Nation, under God, indivisible, with liberty and justice for
all.
Mr. Biggs. Thank you. I now recognize myself for an opening
statement.
I am pleased to be here at the Subcommittee hearing this
morning. The business before us today is the hearing entitled
``Protecting Consumers and Businesses Confronting Organized
Retail Crime.''
Organized retail crime is a growing threat to our retailers
and their employers, our law enforcement, and our communities.
The crisis is not going away; in fact, it is on the rise. In
fact, we held a hearing on this very topic a little more than
two years ago. Today we will have the opportunity to see how
the crisis has evolved.
The rise in organized retail crime and cargo theft is
causing businesses to close and is endangering the public,
where it goes beyond simple shoplifting. Organized theft groups
strategically steal with the specific intent to resell for
profit.
Let's look at a recent example that occurred just a few
miles from where we sat today.
In March 2025, authorities in Virginia and Maryland
arrested two adults and a teenager responsible for allegedly
stealing over $190,000 in a series of organized retail
robberies, including $50,000 taken in Fairfax County.
The suspects first stole perfume. When Ultra secured it
behind glass, they allegedly began smashing the cases with a
hammer to access the products.
For larger OTG, ORC is another business in a portfolio that
may also include narcotics distribution, human trafficking, and
other illicit activities. In the United States in 2023, Walmart
lost $6.5 billion in revenue due to theft and was forced to
close 11 stores in 2024 due to the severity of theft across the
country.
Victims are not only big box stores. Eight in ten retailers
have said the violence and aggression associated with ORC
incidents increased in the past year. Additionally, ORC groups
have increasingly engaged in cargo theft, targeting the
trucking and railroad industries as lucrative new sources of
stolen goods.
According to the American Trucking Associations, that is
ATA, cargo theft has cost the U.S. trucking industry
approximately $7 billion per year.
Rogue prosecutors and soft-on-crime policies in some
jurisdictions are fueling a rise in ORC. Criminals emboldened
by soft-on-crime prosecutions and progressive bail reform laws
know that they can avoid prosecution and incarceration if they
stay below the felony threshold. Thus, criminals intentionally
steal products valued just below the dollar amount required for
the crime to become a felony, knowing that those crimes are not
prosecuted.
Furthermore, with some states passing irresponsible
progressive bail reform laws, these criminals know that they
will be immediately released. Once they are released, they go
on to commit similar or more serious crimes without facing any
consequences.
It is time we fight back. Organized retail crime must be
stopped, criminals must be penalized, and shoppers and retail
employees must not live in fear. I want to give some key
statistics and impacts.
Cargo theft costs the trucking industry $18 million per
day. That is about $7 billion annually.
Retail theft is estimated at $45 billion in 2024, and is
projected to exceed $53 billion by 2027. nationwide job losses
are attributed to ORC, more than $650,000.
Merchandise thefts, shoplifting, are up 19 percent in the
past year, on top of a 24 percent increase in 2022 and 2023.
External shoplifting incidents are up 18 percent; overall
merchandise theft up 12 percent.
Fifty-one percent of retailers report thieves are more
aggressive in that past year, after a 73 reported increase in
the prior year.
Seventy percent of retailers saw increases in phone scams;
55 percent in digital e-commerce fraud.
Fifty percent of cargo supply chain theft tied to ORC.
Sixty-six percent of retailers report transnational ORC
involvement since 2024.
As someone who lives in Arizona, I can tell you
transnational theft is a big issue.
I look forward to hearing from our top-flight list of
witnesses today, our panel of witnesses today. I am grateful
for you being here. Grateful to you and the audience who are
here, and grateful to each Member of the Committee who is here,
and our staff as well.
With that, I yield back on my opening statement. Now, I
recognize my friend from Tennessee, Mr. Cohen, for his opening
statement.
Mr. Cohen. Thank you, Mr. Chair. I am sitting in for Ms.
Lucy McBath who is a good friend and an outstanding Member from
Atlanta, Georgia. She is, unfortunately, or fortunately she is
there to help her husband through surgery, and she asked me to
come in. I am not necessarily known for great activity at 9:00
in the morning, but Ms. McBath is not here.
Thank you. I am honored to be here with Mr. Nehls, a hawk
on law enforcement against retail crime. Thank you.
Organized retail crime is a very real problem and occurs in
every corner of our country. When I was young--and I don't
think it necessarily has anything to do with religion--but my
grandmother told me to buy wholesale. We are concerned about
wholesale crime, too. It is out there.
I discussed our situation with Steve Mulroy, who is our
Shelby County District Attorney. I hope he has met you,
Stephan. He is District Attorney of Shelby County.
We shared examples of recent cases and how State lines
affect law enforcement. Arkansas, we are cornered, Southwest
corner of Tennessee. To the West is Arkansas, and to the South
is Mississippi. The other two corners or our city or county
touch Tennessee.
We are a major transportation and logistics stop, and we
have related cargo and freight theft. One of our Senators,
Marsha Blackburn, is introducing a bill with Senator Amy
Klobuchar called the Cargo Security Innovation Act. I intend to
support that with her, because that will be a way to go after
the theft that we have had on the railroads, which is a serious
problem when they take cargo, threaten the trains, and take the
cargo out.
They also hit trucks. That is important. This all threatens
the safety of the public, employees of the myriad companies
that are targeted, and drives up costs for consumers. At a time
when everyone is feeling the affordability crunch, for many the
American dream is getting pushed further away; it is being
stolen from them.
We don't need to talk about hoaxes or anecdotes, as I am
sure you, all of us here, have believable stories to share. We
need to talk about solutions, which we will do today.
It is always best to start with data. That is how we ensure
to identify and attack our problems with a solution that works.
This is one of the difficult parts of the conversation in that
it is incomplete and bogged down by different definitions and
ways of accounting.
We know we have a problem, but its extent and implications
are somewhat unclear. It touches on a fundamental principle of
American Government: Federalism. I imagine District Attorney
Stephan will discuss that.
We feel this acutely in Memphis because of our location.
The President created the Crime in Memphis Task Force
designed to surge Federal law enforcement resources in Memphis
and improve coordination across agencies. I support the
additional FBI, DEA, and AFT agents that come into Memphis. We
already had them in Memphis. They are finding guns, illegal
guns, and they are finding drugs and finding other crimes that
are against Federal law.
He also put the National Guard in. He put a lot of ICE
agents in. Memphis is not an immigration center of crimes. Most
of the people that are there that are immigrants, even if they
did come into the country illegally, most of them are working
legally doing a lot of important work in Memphis: Construction
industry and the tourism industry. They are necessary and
needed.
If we build that 990-person ballroom, we need waiters.
Thinking they will all be Salvadoran. We need to be concerned
about that.
The National Guard faces this. They are present, and patrol
is important in law enforcement. They are not doing much in the
way of crime fighting. That is, of course, intended, I think.
It somewhat changed the relation between Federal, State,
and local law enforcement. The order is focused on street and
violent crime. Memphis hasn't had too much, and it has gone
down. It went down before the Federal Task Force came in, but
it has gone down a little bit more.
We don't know exactly what street crime is, but we know
when we say we are going to go in with ICE and take out the
people that committed the most serious offenses, the worst of
the worst, mention crime, homicide, we mention rape, and we
mention pedophiles. We know who those people are.
They are arresting people simply for the offense of being
in the country illegally. It is not right. It not necessarily
something which should cause deportation when they are not
committing crimes and they are contributing to the economy.
That is a concern we have.
The U.S. Marshals are in charge of the situation in
Memphis. We understand that, and they are doing a good job.
All of this is to say we are developing policies to address
organized retail crime. It must be well-designed with thoughts
of resources, allocation, roles, and responsibilities. Federal
assistance is good, but especially an interstate problem.
Local, strictly local problems we need to be concerned about
the separation of powers.
That is a question I hope we will get into and understand
there is a place for Federal law enforcement, and a place for
the State and the local law enforcement.
With that, I yield back my time.
Mr. Biggs. The gentleman yields back. I now recognize the
Ranking Member of the Full Committee, Mr. Raskin, for his
opening statement.
Mr. Raskin. Thank you very much, Mr. Chair. Thanks to all
the witnesses for coming to be with us today.
In recent years, retailers have emphasized that organized
retail crime has become a significant threat, both to public
safety and the retail economy, threatening the viability of
businesses like cargo brokers, shippers, big box stores, online
marketplaces, as well as the physical safety of people who work
at these different businesses.
Although we lack one clear definition of organized retail
crime, we know that the essential problem is now continuing
criminal enterprises that operate in a coordinated way to
commit large-scale theft of merchandise for resale, or to
defraud retailers and convert the proceeds into cash or crypto
currency.
This is not petty shoplifting by middle school students. It
is a multibillion-dollar industry that evolves and adapts
almost daily to the latest technological trends, security
improvements, and modified business operations. Social media
and local news reports are filled with videos of smash-and-
grabs and mobs raiding cargo containers. These accounts are
shocking but they are the tip of the iceberg.
Criminal networks recruit people to steal or boost
specified merchandise from retailers, sometimes paying the
boosters' travel expenses, then fence these stolen goods
online, shipping them across State and sometimes national
borders, and arranging for resale of the merchandise to other
stores, or even returning them to the retailer that they had
stolen from in the first place.
Others steal hundreds of gift cards from retailers. They
then peel off the label to obtain the unique code on each card
before doctoring them up to look new, returning them back to
the store shelves, and using customized software to track the
card numbers online. When unsuspecting customers eventually
purchase the cards and load them with value, $50 or $100, for a
nephew's holiday gift or $500 for a wedding present, the
thieves can drain all the money off the cards for themselves
remotely in this diabolically clever scam.
The customer only finds out what happened if their
disappointed nephew or the newlyweds complain about getting a
gift card that has no value on it.
It is increasingly clear that these kinds of operations at
this scale are coordinated and enabled by the most up-to-date
technology and communication tools; very hard to stop.
The State and local law enforcement are our first line of
defense against organized retail crime, but State and local
officials have limited resources and authorities to investigate
and prosecute crimes across State lines and even international
borders.
In recent years, Federal agencies have taken some interest
in confronting this problem. The Federal prosecutors tend to
focus their own limited resources on the largest and most
brazen schemes, especially those involving theft of large
amounts of cargo or thefts involving losses in tens of
thousands of dollars.
Many organized retail theft schemes are too complex for
State prosecutors and too modest for Federal prosecutors,
creating a growing enforcement gap.
As this Committee grapples with the problem I see two basic
challenges: First, we need better data. Because retailers,
retail organizations, and law enforcement all track organized
retail crime using different definitions and different methods,
we have got a hard time canvassing the real scope and
dimensions of the problem or formulating an effective targeted
response.
In some cases, retailers are targeted by the gangs for
weeks or even months before it becomes clear that the crime is
even taking place. If we are going to tackle this problem we
need standardized national data, utilizing a consistent, and
widely accepted definition of organized retail crime. We cannot
dismantle these criminal networks until we have a real
understanding of how they operate and how much damage they are
causing.
Second, we need to see better coordination between Federal
law enforcement agencies and their State and local
counterparts. A national task force could be very useful in
finding the broader patterns in local incidents and conducting
complex investigations across State lines. I would hope any
such task force would be nimble enough to follow organized
retail crime as their methods evolve.
In 2022, Congress passed the Informed Consumers Act to
bring more transparency to online transactions on certain
platforms. Perpetrators of organized retail crime took note and
moved their operations to smaller platforms not covered by the
law.
A nationwide task force would help us make sure our laws
are being kept up with criminals and to ensure law enforcement
at all levels is empowered to counter organized retail crime.
I am glad that we have a very strong panel here today to
share their expert knowledge and experience, and to discuss
solutions that will better protect employees, consumers, and
communities across the country.
I thank you, Mr. Chair, and I yield back.
Mr. Biggs. The gentleman yields back. Without objection,
all other opening statements will be included in the record.
We will now introduce today's witnesses. I recognize the
gentleman from California, Mr. Issa, for the purpose of
introducing Hon. Summer Stephan, without objection.
Mr. Issa. Thank you, Mr. Chair.
This is truly a great pleasure. There is not enough you can
say about Summer's tenure as District Attorney. She came into
an organization that needed help. She rebuilt it and then
fought off those time and time again who tried to undercut her
ability to prosecute and keep San Diego a city that, in fact,
has recent one of the safest large cities in America.
Particularly, she fought for Prop. 36. For those who don't
know Prop. 36 in California, we had created a situation at the
State level in which there was no crime for shoplifting.
Effectively, the $900 rule couldn't even be implemented because
you couldn't find out how much they were leaving with.
If they left with a case of high-end liquor, you couldn't
stop them finding out if there was over $900 of high-end
liquor. At the end of the day they didn't just steal $900 for
10-15 times a day, they in fact may have been stealing more but
with impunity.
As many of the others in their opening statements
mentioned, there was a gap between the Federal and the State.
Summer worked very hard with U.S. attorneys of both parties to
try to narrow that gap and begin some prosecution.
She particularly, unlike many district attorneys, was
willing to go to the field. Whether it is dealing with the
retailers, or going into homeless encampments to see those
goods being dumped in massive amounts after being stolen, she
has been there. Her advocacy made a difference in the outcome
of Prop. 36.
Since the time of its input, its passage, she has
prosecuted more than 2,000 repeat felons, created a situation
in which San Diego is once again a place where retailers can
operate and work with the Federal Government on organized crime
that ultimately is the back end of much of that theft.
I am thrilled to see my longtime friend and our ally in San
Diego and welcome her. I yield back.
Mr. Biggs. Yes. At this moment I will recognize the Ranking
Member Mr. Raskin for a U.C. request.
Mr. Raskin. Thank you kindly, Mr. Chair. I ask U.C. to
enter a statement for the record, dated today, December 17,
2025, from ICSC, representing 50,000 North American marketplace
professionals, including owners and developers of retail
centers, as well as retail tenants, investors, and developers.
Mr. Biggs. Without objection. I will now introduce the rest
of the witnesses.
Mr. Scott McBride is the Chief Global Asset Protection
Officer of American Eagle Outfitters, a lifestyle brand and
retailer with locations worldwide. In his role, Mr. McBride is
responsible for the comprehensive protection of the company's
assets across five continents.
Mr. Chris Spear is the President and Chief Executive
Officer of the American Trucking Association, an organization
made up of trucking companies. He also serves on the Board of
Directors for the American Transportation Research Institute
and the Trucking Cares Foundation.
Mr. Shane Bennett is the Principal of Theft, Fraud, and
Abuse at Target. He previously was the Director of Assets
Protection and Field Investigations for Target where he led
strategy and personnel who addressed organized retail crime.
We welcome our witnesses. Thank you for appearing today.
Will you each stand so we can swear you in. Please raise
your right hands.
Do each of you swear or affirm under penalty of perjury
that the testimony you are about to give is true and correct to
the best of your knowledge, information, and belief, so help
you God?
[Affirmative response.]
Mr. Biggs. Let the record reflect the witnesses have
answered in the affirmative. You may be seated. Thank you.
I want you to know that your written testimony will be
entered into the record in its entirety. Accordingly, we are
asking you to summarize your testimony in five minutes. If you
get close you will hear this at first. Then, if you get really
long you will hear a whack with the gavel to remind you that
time has expired.
I will remind; I will try to remind you so you can turn on
your microphone when you speak.
We will now recognize Mr. Bennett for his five-minute
opening statement.
STATEMENT OF SHANE BENNETT
Mr. Bennett. Chair Biggs, Ranking Member Cohen, and the
esteemed Members of the Subcommittee, thank you for the
opportunity to address the Committee today on a very pressing
issue.
My name is Shane Bennett, and I have nearly 40 years of
experience in assets protection and fraud prevention.
Currently, I lead retail crime strategy for Target
Corporation's Fraud and Abuse Team, focused on large-scale
organized retail crime, or ORC.
Target is a great American company with more than 400,000
team members and 2,000 stores, all here in the U.S.
Over my career I have worked in stores, in the field as an
ORC investigation, and in my current role in fraud and abuse. I
have witnessed first-hand how dangerous and highly coordinated
ORC has become and the impact it has had on both consumers and
businesses.
This isn't about casual shoplifters. Organized retail crime
is far more advanced. No single State or retailer can see the
full picture. Retail crime enterprises deliberately operate
across jurisdictions to evade detection and prosecution. This
makes it very difficult for State and local agencies to
investigate their activities without the help of Federal
partners.
The Combating Organized Retail Crime Act, or CORCA, would
help bridge that gap.
The impact on consumers, your constituents, is significant.
These criminal enterprises contribute to lower product
availability on shelves, increased safety risks for both our
team members and guests, and disrupt supply chains, and
ultimately fuels widespread financial fraud which funds
criminal activities impacting our communities.
More recently, gift card scams have surged. I am certain
that many of your constituents have been or know a victim. The
Department of Homeland Security has estimated more than $1
billion in fraud losses over the past two years. A 2022 AARP
study found that one out of every three Americans have either
experienced gift card fraud themselves or know someone who has.
This issue becomes even more urgent during the holiday
season when gift card purchases spike, as people turn to them
as easy last-minute gifts. Although there are several fraud
vectors involving gift cards targeting consumers and
businesses, one example is gift card tampering.
Criminals steal inactive gift cards off retail shelves,
tamper with the card by copying the activation data, then
reseal them before putting them back on store shelves. Once an
unsuspecting shopper loads money onto that card at checkout,
fraudsters use sophisticated methods to detect the balance and
drain the funds. Ultimately, profits funding criminal
organizations.
At Target we have built a multilayered prevention model to
combat this fraud. This includes real-time analytics, increased
training and education for our team members, and an industry-
leading innovation like our decoupled gift card technology.
This helps prevent fraud activation and protects our guests and
your constituents from being targeted by criminals.
Retailers cannot combat gift card fraud alone. We work
closely with partners through the Gift Card Fraud Prevention
Alliance educating consumers, sharing data, and identifying
interstate trends. Additionally, our partnerships with Federal
agencies are essential.
For example, Target and industry partners coordinate with
Federal law enforcement through Project Red Hook, an initiative
with Homeland Security investigations. This collaboration
traces elicit financial flows, identifies transnational fraud
networks, and disrupts organized retail crime operations that
span multiple States.
In the past two years there have been 232 arrests, with
asset seizures totaling approximately $8 million. This
partnership shows that we can dismantle criminal groups. The
Combating Organized Retail Crime Act would strengthen and
expand the model by providing tools needed to disrupt the
sophisticated criminal networks and protect consumers.
Target, along with the entire retail community strongly
supporting CORCA, urges Congress to pass this bipartisan
legislation quickly.
Thank you for your leadership on this issue. I look forward
to your questions.
[The prepared statement of Shane Bennett follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Biggs. Thank you. We appreciate your testimony. Now, I
recognize District Attorney Stephan for her five-minute opening
statement.
STATEMENT OF THE HON. SUMMER STEPHAN
Ms. Stephan. Thank you, Chair Biggs, Ranking Member Cohen,
Ranking Member Raskin, and the Members of the Subcommittee for
this opportunity to speak before you.
I am before you as a 35-year prosecutor. For the record,
that
is longer than I have been alive not a prosecutor. I rose
through
the ranks to become the elected District Attorney for San Diego
County.
For perspective, San Diego County is the fifth largest
county in the United States. I have the honor of serving 3.3
million people that call San Diego home. I am also the Chair of
the National District Attorney's Association, one of the oldest
prosecutor associations in the Nation.
A few years ago, we saw that organized retail theft was not
what it used to be, that it was highly organized and highly
sophisticated. To keep up with it, we needed to get organized.
I formed within my office an Organized Retail Theft Task Force
and worked with our police departments on combating this crime.
With that we have had great success. I believe that we may
be the office that has prosecuted more organized retail theft.
In three years, we brought 336 defendants who were responsible
for organized-retail theft to justice, with losses to stores of
$3,208,000.
This is just the tip of the iceberg. One of the reasons
that I am so grateful for the work of this Committee is because
despite all the resources where I put this task force, and the
number of people we have prosecuted, we have not been able to
get past the booster level--that is the people who are
conducting the theft. Then, in many cases where we were able to
build through search warrants, cell phone evidence, capturing
camera evidence, we were able to go up the chain to the fence
level.
We recognized very quickly that we did not get through as a
county prosecutor to the level of the organized criminals that
are pulling the strings and that area responsible for reselling
the products or shipping them overseas to never be found again.
I am going to give you an example of a case that we did
recently that I think really illustrates this point.
We had a very sophisticated heist at a chain jewelry store.
They targeted Rolex watches. Within a couple of days, as we
were putting the case together, we were able to make some
arrests and discovered that the Rolex watches were all already
shipped overseas.
What really made me more passionate about the fact that
this needs to be a whole-nation effort is because we discovered
that the same crew was also responsible for the same type of
thing in the State of Washington. We had no alert system or a
data bank of Federal, State, and locals to address and to get
an alert that they might be coming for us because we have a
very fancy store just like the one in Washington.
That is just one example. We have had many cases,
especially in the crews that target commercial and home
burglaries that we have discovered have committed a chain of
those across the United States.
When we got them, we were able to get the group, but we
were not able to recover the product nor to get up to the
chain, the international and national chain that is involved.
I also want to tell you that another thing about being on
the ground is that this is such a victim-centered crime. When
we prosecuted the Ultra store $700,000 heist, looking in the
eyes of those young workers that expected to have a safe place
to work and found out that they couldn't even look at the
thieves because they would look at them, like, ``What are you
looking at? You can't do anything about it.''
That really made it clear that we need a national data bank
so that we can really go after this sophisticated crime, these
criminals, and protect our employees and our community.
Thank you very much for this opportunity.
[The prepared statement of the Hon. Summer Stephan
follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Biggs. Thank you. Thank you. Now, we recognize Mr.
Spear for his five minutes of testimony.
STATEMENT OF CHRIS SPEAR
Mr. Spear. Chair Biggs, Congressman Cohen, and the
Subcommittee Members, thank you for the opportunity to testify
about the rapid rise in cargo theft and the threat that it
poses to our economy as well as our national security.
For over 90 years the American Trucking Associations has
represented an industry that now employs 8.4 million of the
hardest working men and women in the country. Today these
Americans are on the front lines of an escalating crisis, and
they need backup from Congress.
Brazen thieves are robbing our industry to the tune of $18
million a day. Motor carriers not only have to replace stolen
products, but shoulder higher insurance premiums and invest in
new security measures. These added expenses put jobs and
businesses at risk. Those elevated costs for fleets are felt by
consumers at the store.
Plainly, there is a direct connection to rampant cargo
theft and what Americans are paying at grocery stores. Across
the supply chain cargo theft is estimated to cost up to $35
billion annually. This is money that belongs in consumers'
wallets, not criminals' pockets.
There are two categories of cargo theft: Straight theft and
strategic theft.
Straight theft has been around since trucks have been on a
road a century ago. It involves the physical theft of cargo
from a distribution center or the back of a truck. Crews will
stop tractor trailers and strike when they are stopped at a
rest area or even a traffic light, putting truck drivers and
other essential supply chain workers directly in harm's way.
In Arizona police recently arrested several individuals who
had stolen six figures worth of energy drinks. They were later
linked to a $3 million heist of electronics.
In Georgia four men were recently convicted for multiple
thefts of electronics, copper, and apparel, totaling more than
$1.7 million across the entire Southeast.
These incidents are happening in every State and in every
district.
In contrast, strategic theft involved the use of advanced
cyber tactics to trick shippers, brokers, and carriers to
divert and hand over their loads. This hi-tech form of cargo
theft has become a digital renaissance for thieves, surging
1,500 percent since 2021.
Over 90 percent of fleets are small businesses operating 10
trucks or fewer, but they are forced to compete in an arms race
trying to match the formidable technological capabilities of
sophisticated criminals who are often based overseas.
Transnational aspects of cargo theft also make it a
national security issue. Proceeds from stolen goods finance
other criminal activities, including drug trafficking,
organized crime, and even potentially terrorism. In just one
example, shipments of high-end refrigerators were stolen from
one of our Memphis, Tennessee, members in St. Louis. The local
police filed a report but declined to investigate further.
Several months later the ATF stumbled across the
refrigerators when they raided a warehouse. They were being
stuffed with U.S. drug profits before being sent back across
the Southern border.
What the local police dismissed as a simple insurance
matter turned out to be a pivotal piece of a Mexican cartel's
operation.
Trucking is interstate by nature, which means the thieves
targeting the cargo we haul are interstate as well. The State
and local law enforcement often lack the resources and the
jurisdiction to adequately investigate cross-border crimes.
This is clearly a Federal responsibility. Only the U.S.
Government is equipped with the capability and the
constitutional authority to pursue criminals across State and
international lines.
For these reasons ATA strongly supports the enactment of
the Combating Organized Retail Crime Act. This legislation will
provide law enforcement with tools and enhanced legal
frameworks to combat this highly complex national and
international threat.
Rather than ignoring what our economy needs, CORCA would
centralize data in coordination with Federal, State, local, and
industry, and proactively unravel schemes orchestrated by
transna-
tional crimes.
The theft of cargo is a nationwide problem, and it requires
a national solution. By bringing the fight to organized theft
groups, CORCA would help safeguard Americans who work in our
supply chain, and it would protect national security.
Thank you. I look forward to answering your questions.
[The prepared statement of Chris Spear follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Biggs. Thank you. The Chair next recognizes Mr. McBride
for his five-minutes opening statement.
STATEMENT OF SCOTT McBRIDE
Mr. McBride. Chair Biggs, Congressman Cohen, and the
esteemed Members of the Committee, thank you for the
opportunity to address the critical issues of organized retail
crime.
ORC is not new. What is new is the ferocity,
sophistication, frequency, and geographic reach that has
escalated dramatically in the last five years. These criminal
networks exploit the internet and encrypted messaging apps to
recruit thieves, coordinate consolidation of stolen goods, and
liquidate them through illicit online marketplaces or black-
market sites.
They even exfiltrated stolen products out of the country.
Simultaneously, retailers have invested in new technologies
and provided clear insights into the scope of these thefts:
Time stamping video evidence, pinpointing locations of the
missing items, and enhanced collaboration with law enforcement.
Despite our efforts, the problem continues to grow.
ORC is far more than simple shoplifting. It represents a
sophisticated criminal network and enterprises perpetrating
massive thefts and escalating violence against our associates
and customers.
These groups cross jurisdictional lines to avoid
prosecution, deploy professional-style tactics to field their
nefarious operations, including diverse logistics, illicit
liquidation, financial crimes, and recruitment.
They repeatedly victimize retail stores of all sizes, from
the mall, to the strip center, to the big box, and Main Street;
and from home improvement, to grocery, to apparel, and sporting
goods. They interrupt the normal shopping experience for our
customers, demoralize our associates, and disrupt our supply
chains.
The rise in retail theft and violence is highlighted in the
NRF's annual Impact of Violence and Theft report. This year's
data reveals that retailers have experienced a 19 percent
increase in merchandise thefts over the past year, compounding
on the reported 24 percent increase from 2022-2023.
On violence, 51 percent of retailers report thieves are
more aggressive this year than the following 73--and in
addition to the 73 percent increase from last year.
In-store theft is only one aspect of organized retail
crime. Groups have become more sophisticated in both method and
tactic. Over the past year, 70 percent of retailers have
reported increases in phone scams; 55 percent increased the
digital and e-commerce fraud; and over 50 percent saw increases
in cargo theft.
Criminal groups utilize military-style tactics, counter-
surveillance to commit cargo thefts on railroads, complex
deception tactics to obtain gift cards, and cybercriminals'
activities to steal freight across the supply chain.
Consider one of my most recent cases where Homeland
Security Investigations worked alongside State and local police
to investigate and interdict a consolidation and exfiltration
scheme:
Stolen apparel was being prepared for packing into sea-land
containers destined to cross the Texas border into Mexico. With
the assistance of corporate investigators, HSI recovered
approximately 2,000 pairs of American Eagle jeans, retail value
of $100,000, inside of nearly $2 million in other apparel.
RFID research revealed my items were stolen from 35 stores
across 13 States within the past four weeks of that time. The
group was tied to a group out of Houston and Katy, Texas, that
linked to transnational criminal organizations in Mexico.
Another example is when 35--I am sorry. A further example
is when 20 stolen vehicles arrived with more than 40
individuals suddenly converging on a suburban mall. Armed with
implements of destruction ranging from tire irons to firearms
that endangered customers and threatened staff to commit theft.
This was a coordinated attack with premeditated malice and a
determination to plunder and escape. The stolen items were not
necessities. This group operated under the direction of a
larger entity, with the means to mobilize and monetize their
illicit gains.
In conclusion, the Combating Organized Retail Crime Act,
CORCA, is an essential missing layer. It would establish a
Cargo Theft and Retail Crime Coordination Center, bringing
together Federal, State, and local law enforcement with private
sector experts to share vital information. As a professional
dedicated to protecting consumers and associates, I implore all
the Members of Congress to work together to ensure the
Combating Organized Retail Act urgently becomes law.
Thank you for providing me with this opportunity to
testify. I look forward to answering your questions.
[The prepared statement of Scott McBride follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Biggs. Thank you. I recognize myself now to enter a
U.C. We have a letter from the National Association of
Convenience Stores about this issue and about this topic. I
will admit that into the record without objection.
Now, I recognize the gentleman from North Carolina Mr.
Knott for his five minutes.
Mr. Knott. Thank you, Mr. Chair. Thank you for holding this
an important hearing.
To the witnesses who are here, I look forward to this
conversation.
We are very excited to have this hearing because it
addresses a very real problem. It addresses just one more area
of American life that organized crime is really striking at the
heart. When you step back and look at the effect of organized
crime, for a variety of reasons, including unchecked migration
from people all over the world coming to this country, some of
whom are coming with bad intent. If you look at weak law
enforcement policies, antilaw enforcement policies.
You look at former drug dealers are now cartel operatives.
If you look at former welfare chiefs are now international
fraudsters. Old neighborhood brawls have turned into war zones,
gun battles. If you look at local gangs are now being replaced
with international crime syndicates.
That extension has certainly gone into retail crime. Many
of you have mentioned that already. In my experience in law
enforcement, of all those particular types of crime, most
Americans are least familiar with organized retail crime even
though organized retail crime affects, arguably, every single
American the most.
By some estimates, I've seen that the direct cost for
organized retail theft is over $100 billion a year in this
country. It is growing. The indirect costs are many multiples
higher than that.
In regard to my observations as a former prosecutor, often
when you observed a petty crime, an individual crime, it was
one spoken in a much larger wheel.
To that extent, Ms. Stephan, I want to start with you. A
lot of people who are questioning this bill have a fear that it
is going to take away local law enforcement's ability to fight
this crime.
As a former Federal prosecutor, I used to work with local
law enforcement to attack crime.
Please tell us why Federal assistance in tackling organized
retail theft is needed from a district attorney's perspective?
Ms. Stephan. Thank you for that question. Absolutely there
is a role for State prosecutors, like I talked about. There is
a role for Federal prosecutors.
One great example of how you can split, conquer, and make
your community safe is an elder justice task force where we
were able to take real action against these scammers that are
going after our elderly. We could only, again, get to the
people that were showing up at the doorstep of our elderly and
prosecute them.
By teaming up in a task force that included the U.S.
Attorney, we were able, the Federal Government was able to do a
RICO action. You know what that is?
Mr. Knott. Sure.
Ms. Stephan. There is a lot of power to bring the higher-
ups of these terrible scammers that are abusing our seniors.
Mr. Knott. Sure.
Ms. Stephan. I envision the same thing for retail theft.
Mr. Knott. Organized retail crime does not stop at your
jurisdictional boundary, does it?
Ms. Stephan. Not at all.
Mr. Knott. In regard to the crimes I mentioned--gangs,
drugs, violent criminals, and fraudsters--there is a Federal
forum for those criminals?
Ms. Stephan. Absolutely.
Mr. Knott. If it is a logical extension, why would we not
have a Federal forum for organized retail thieves?
Ms. Stephan. These criminals travel across county lines and
State lines, and international lines, so the only way that you
can defeat a big monster like that is to come together and
leverage our individual power set to take care of our
communities.
Mr. Knott. It's safe to say it would be a partnership, not
a replacement, in the Federal law enforcement?
Ms. Stephan. Absolutely. I don't plan on being replaced.
Mr. Knott. Right. Yes, ma'am. Mr. McBride, I want to talk
to you briefly.
You talked about the levels of sophistication of these
international crime syndicates. Can you describe who these
people are and what type of mechanisms they utilize to further
their criminal activity?
Mr. McBride. Thank you for the question, Congressman. I
cannot speak to exactly who they are. That is more of a
question for HSI and the law enforcement agencies that have
ties or information on that.
Mr. Knott. In your experience, what have you observed?
Mr. McBride. In my experience, we know that exfiltration
schemes, and we are getting a clearer and clearer picture
because of data that we are able to collect on our own product,
that is showing there is a highly sophisticated levels of roles
and responsibilities within these organizations.
Some people do not leave the State. They commit the crime
but they are working for someone that is outside the State, or
even outside the country, who might be a shot-caller that is
developing this mechanism and is employing--and I say that
loosely as a term--employing them to do these crimes at
different levels for different jobs, whether it is the
boosting, the muling or moving the product, cleaning it and
consolidating it, and reshipping it to a central location and
then the exfiltration abroad.
Mr. Knott. It is safe to say this is not just an interstate
issue, it is an international issue, is it not?
Mr. McBride. It is. Transnational polycriminal
organizations are the ones that are really calling the shots
here.
Mr. Biggs. The gentleman's time has expired. Thank you.
Mr. Knott. I yield back. Thank you, Mr. Chair.
Mr. McBride. Thank you.
Mr. Biggs. The Chair now recognizes the gentleman from
Tennessee, Mr. Cohen.
Mr. Cohen. Thank you, sir. I want to followup on Mr.
Knott's question. I am going to start with District Attorney
Stephan, Darrell Issa's friend.
Is this deterrent-based car theft devices, does that help
your situation? They can't get into the cars with these devices
on them, can they?
Ms. Stephan. Well, innovations like that have been very
helpful in auto thefts; that's correct.
Mr. Cohen. Darrell's fighting crime?
Ms. Stephan. Pardon me?
Mr. Cohen. Darrell's fighting crime was we speak. As you
speak, right?
Mr. McBride couldn't give us any names. Mr. Knott wanted
some names. I'd like some.
Who? Who are we talking about? In drugs we know it is El
Chapo, and Pablo Escobar, and blah-blah-blah. Who is it in this
situation? Who are the big names? Do you get any of them ever?
Ms. Stephan. Well, we know some names, yes. We know that,
for example, when it comes to what I talked about, the
commercial burglaries and the home burglary crews, those we
have been able to identify with a group that is abusing what is
called an ESTA visa. That is coming from a variety of
countries.
They are coming in, and then getting replaced and another
group comes in and just follows through with what they have
been doing. That has been identified.
Mr. Cohen. Can you tell us the names? Are they big crime
syndicates or are they just crime?
Ms. Stephan. Well, I think it is big crime because it is
affecting a lot of people, victims in my community.
Mr. Cohen. Right.
Ms. Stephan. I go by what the Federal Government is what
does the designations. I know that the FBI has designated them
as a crossnational, transnational crime group.
Mr. Cohen. San Diego is different than Memphis and Kansas
City. You are on the international border.
Ms. Stephan. Yes.
Mr. Cohen. Are cities in the interior of the United States
getting the same type of crimes? Are they people from outside
the country that are doing this predominantly?
I see some bobbing heads in the crowd. Do you bob, too?
Ms. Stephan. From the people that we have captured in these
commercial and residential burglary crews, they have hit
multiple States. I don't think that they are traveling from
State-to-State very easily. I can't tell you they are in your
State. We have had cases where they have Arizona, they have got
the State of Washington. They have got Colorado.
We have had several sophisticated crews that have come
across multiple countries. How do we know? It is when we arrest
them and we download their phones using the proper search
warrant. We are able to track their communications and their
movements.
They usually rent cars in different locations and start
over. This is very sophisticated. It is not like the fentanyl
where I can tell you exactly where it is coming from and who is
producing it. It is much more distributed.
My answer to you would be this: That without a database we
are not going to be able to connect the dots.
Mr. Cohen. That in the CORCA bill, that they would be one?
Ms. Stephan. Exactly. In the CORCA bill, Section 17, Number
6, it talks specifically about that part of what it is going to
uncover is connections with intersections with other criminal
activity, like potentially elder scams, like human trafficking.
Mr. Cohen. I have only got about a minute left. Let me ask
you this, and if anybody else can answer me, too.
What I am trying, and I don't know if I know the names
anyway, but is there an Al Capone out there? Is there some big
criminal type that is in charge of this whole deal?
Ms. Stephan. Not that I know of.
Mr. Cohen. OK.
Ms. Stephan. What I do know is we haven't done enough to
get the answer. We won't get the answer without a task force.
Mr. Cohen. Right.
Mr. McBride. Congressman, I can only speak to following our
product. Our product is being exfiltrated across the Texas
border into Mexico. Our product is being interdicted in the
Port of Long Beach, headed for Colombia, South America.
We have also been involved in investigations with HSI on
container shipments outside of the port of New Jersey.
Those products are being loaded into a container. That
container is being manifested to leave the country. All of the
products is stolen from multiple retailers, mine included,
inside of those containers.
We have recovered many of them. Some have slipped through
and not been able to be stopped.
From a transnational perspective there are kingpins out
there. I do not know their names. I am not privy to that law
enforcement side. There is probably confidential information
that is not being shared with the retailers where those--
Mr. Cohen. We need to talk--we need to talk to the FBI and
Kash Patel. This should be his area of jurisdiction; is that
correct?
Mr. Biggs. The gentleman's time has expired. You may answer
the question, Mr. McBride.
Mr. McBride. I believe that it is a Federal issue and that
we need national link analysis. The HSI has been the most
helpful so far. We would expect that they would be able to lead
this charge.
The FBI is certainly involved as a partner, along with
other Federal agencies.
Mr. Cohen. Thank you, sir.
Mr. Biggs. The Chair now recognizes the gentlelady from
Florida, Ms. Lee, for five minutes.
Ms. Lee. Thank you, Mr. Chair, for holding this important
hearing.
Thank you to all our witnesses for being here with us
today. You have highlighted something that is so important for
us in Congress to recognize, and that is that the threat of
organized retail crime has grown exponentially. Today we are
seeing such sophisticated schemes involving fraud,
impersonation, and also cyber-related tactics. That
necessitates, in my ways, a Federal coordinated response.
In my home State of Florida we have seen an increase in
cargo theft. It is impacting freight hubs all over our State.
The increasing sophistication of these criminal networks
highlights that need for greater Federal law enforcement
support.
Mr. Spear, I would like to go back to you and your
testimony.
One of the things that you noted is that there is in some
State and local law enforcement areas a lack of resources in
jurisdiction. You noted that this was clearly a Federal
responsibility.
I would like to hear a bit more from you about that lack of
resources in jurisdiction, how it is affecting crime prevention
in this way and, also, the advanced cyber tactics that are
being used to disrupt our cargo transport and, also, the safe
containment of these retail products.
Mr. Spear. Thank you, Congresswoman. Yes, I would be happy
to.
Trucking obviously operates in all 50 States, every
congressional district. We see the panoramic view of the
Nation. Moving freight State-to-State is a daily experience for
us.
We work with State law enforcement, we work with local law
enforcement. The problem with this is that you are obviously
moving from one point to another, this freight can get taken at
any point in time, in any State. It is that sporadic.
Obviously, we will work with local law enforcement if they
are first on the scene, State law enforcement. That freight
can, obviously, be in another State before we can even figure
out that it was taken.
The speed of our response the ability to share information
quickly, Federal databases could be a harbinger for that to
really understand the broader ramifications, not just about
where the freight could be headed in different States, but
also, other links and organizations that might be responsible
for it.
The local and State law enforcement aren't going to have
that ability to see State-to-State, see Federal. That panoramic
view is the missing piece of the puzzle. OK? We are working
just fine local and State. It is getting the national fabric,
that interstate fabric into the puzzle to make it complete and
actually be able to go after these criminal organizations
effectively with the speed that we need to tackle the problem.
The transnational criminal organizations, that is an
international element. That is the strategic theft that we are
speaking to. These groups are operating out of Eastern Europe,
Russia, South Africa, and China. These are places where if you
have a laptop, you have access to a process, a system. You can
go into a bill of lading and redirect freight as it is in
motion.
We have had members that the driver thinks it is
legitimate, it is the company's system that is telling them to
redirect, drop the freight to a dummy site. That freight is
long gone before they even figure out that it was taken. That
is going to require multiple States being part of a Federal
fabric to be able to understand where that threat is coming
from and how to prevent it.
The State and local governments do not have the capability
to attack transnational organizations. That is a Federal
responsibility. It is the missing piece of the puzzle. If you
put it in under CORCA, then you really have a full solution to
tackling this problem quickly.
Ms. Lee. Mr. Bennett, I would like to go back to you on
this subject. I know that you also work a lot in digital and
cyber defense in your position.
Would you please comment on the that organized retail crime
is no longer limited to in-store theft. You touched on a couple
of these other digital consequences, things that are happening.
What are you working on? What are you seeing from a cyber
defenses perspective and how technology is being used to help
promote and perpetrate these schemes?
Mr. Bennett. Representative Lee, thank you very much for
the question.
From my perspective, the work that we do on our team, this
is a really important element from a technological perspective.
Advanced analytics, identifying atoms of behavior, all these
things are critically important.
I am sure everyone on the panel has received a text message
that says you didn't pay--you need to pay a fee or a fine in
EZPass. At first glance that doesn't seem like organized retail
crime. You might not connect it to organized retail crime. That
is a fraudster fishing information from you that ultimately is
going to turn into some sort of laundering activity, in large
part in the retail environment.
Those are examples of how consumers see ORC, and they don't
realize it. It might look like an individual issue. It is
connected to a much larger scheme and scam. I know I mentioned
our gift cards early on. We could talk about that.
Mr. Biggs. Yes, thank you. Time has expired. Thank you.
Ms. Lee. Thank you.
Mr. Biggs. The Chair recognizes the gentleman from Texas,
Mr. Nehls.
Mr. Nehls. Thank you, Mr. Chair. Thank you all for being
here.
As a former sheriff for Fort Bend County, Texas, in law
enforcement for 30 years, back in 2017-2018 already we were
experiencing organized crime in the greater Houston area. We
arrested several individuals from Venezuela coming in,
creating, committing many, many burglaries, and residential
burglaries. We had them coming in from Honduras and everywhere
else.
I believe that many of these burglars would come into our
country having been deported previously several times for
previous crimes. Personally, I believe what you guys are
experiencing right now and the increase of crime is because of
our Southern border, and that porous Southern border over the
past several years.
Would you agree--if I can go down the line, would you agree
that our policies at the Southern border have contributed to
this chaos we see in organized theft and retail theft across
the country? Just a yes or no.
Ms. Stephan. I can't answer that.
Mr. Nehls. OK, then we will go to the next. Mr. Bennett,
yes or no?
Mr. Bennett. The view that we often have in retail is
limited, so I can't really answer that.
Mr. Nehls. OK.
Mr. Spear. We move 76 percent of the USMCA freight. Yes, it
is definitely an issue. We are a moving target.
Mr. Nehls. Yes. You highlighted the fact that they were--
you are the one who talked about the refrigerators?
Mr. Spear. That is correct.
Mr. Nehls. They were going back across to Mexico and
everybody else.
Mr. Spear. That is correct. How about you, Mr. McBride?
Mr. McBride. I do not have any data that would lead me to
be able to say yes or no.
Mr. Nehls. Well, the average person that has served in law
enforcement for all the years, you are seeing what Tren de
Aragua was doing. I am assuming that they are probably involved
with some of this.
In just my experience as a sheriff, I think over the past
several years our Southern border policies has contributed to
this chaos, whether it is in just retail or just part one
crimes, everything. Assault, all of it is a result of our
Southern border. I am going to make a prediction.
You have seen an increase in crime. The numbers you said
that over the past several years these crimes have become
increasing. Do you believe that with our position now at the
Southern border with Donald J. Trump, are you optimistic that
we are going to see a reduction in some of this organized
retail crime as a result of our position at the Southern border
with they are just not letting anybody in anymore?
Just yes or no, ma'am.
Ms. Stephan. I can tell you definitively when it comes to
drugs and fentanyl, yes. I cannot tell you with regard to
retail theft.
Mr. Nehls. I am assuming retail theft would probably help
them with their drug addiction.
Mr. Bennett. My perspective would be that we need the
support from the Federal Government to help solve this issue.
Mr. Spear. If he signs this bill, CORCA, absolutely. We
will have the piece of the puzzle that we need to combat it,
not just domestically but internationally.
Mr. McBride. My position is that organized retail crime is
recruiting and has recruited more than we know across all
States, and that CORCA is the only way that we are going to get
visibility to this type of crime in this country.
Mr. Nehls. Well, again, through my experience as a sheriff
and arresting some of these bad hombres, knowing that after we
have arrested them they have been deported four, five, six
times for some of the same damn crimes they have committed
before, we have arrested but they keep coming back, I will just
say this, Mr. Bennett, the Federal Government is getting
involved because Donald J. Trump has secured the Southern
border. He secured the Southern border.
The way you reduce all this recidivism is by keep them out
of our country; right? Keep them out.
I support the idea of a task force, by the way, Mr. Chair.
I think it is a great idea. I believe that we are going to come
back, maybe have a hearing in another year or so, and you are
going to have a better attitude about this, because that the
Southern border is a serious, serious issue. Now that it has
been solved by keeping the bad hombres out, help is on its way
is what I say.
I yield back.
Mr. Biggs. The gentleman yields back. I recognize the
gentleman from Wisconsin, Mr. Tiffany.
Mr. Tiffany. Thank you, Mr. Chair.
Mr. Bennett, the leading home improvement retailer in the
Midwest, they gave me an example of theft that has happened in
their stores. Does this sound plausible? The numbers are really
staggering.
In 2022, a husband-and-wife team stoled over $33,000 worth
of goods. They have stolen half a million dollars from other
retailers.
Nineteen different teams of Romani suspects--some people
referred, or some people refer to them as Gypsies--crossed the
Midwest stealing electrical breakers, $165,000.
In 2024, eight different suspects committed theft via
credit card to the tune of $224,000 at 46 locations. A total of
107 individual police reports, only three have been arrested.
In 2025, 209 separate instances of rental equipment theft,
128 different stores, $350,000 loss. Is this plausible?
Mr. Bennett. Representative Tiffany, thank you for the
question.
I am not familiar with all those cases, obviously, with a
partner retailer, but certainly it is plausible.
Mr. Tiffany. I mean, $165,000 of electrical breakers? What
the heck are they doing with them?
Mr. Bennett. Well, I can speak to my space here on fraud. I
can tell you that there are numbers of consumers that are
victimized.
I have worked on cases where we have had 38 victims from 38
different States all linked to one investigation. These sort of
complex, structured activities are certainly, certainly
plausible.
Mr. Tiffany. Mr. Spear, I am going to followup on Mr.
Nehls' questioning here.
About the Southern border, doesn't it make sense if we are
being diligent as a Federal Government on our Southern border
about who is coming in and out of the country, that some of
these bad actors are transnational; is that correct?
Mr. Spear. That is correct.
Mr. Tiffany. The best way to access us is oftentimes the
Southern border; correct?
Mr. Spear. It's a contributing factor.
Mr. Tiffany. Doesn't it just make sense, then, that by
securing the Southern border for this particular issue that it
is going to be helpful?
Mr. Spear. There is no question about that. The Southern
border is certainly an element to it. It is a very complex
problem. It is not just the Southern border. It is legit, no
doubt, but this is happening electronically, the strategic
theft that I have spoken about. That is the 1,500 percent rise
since 2021.
Again, if you have a laptop you can access. A lot of these
groups want to fly under the radar.
I understand Congressman Cohen's question about names. I
wouldn't focus on names; I would focus on numbers. This is a
vast volume of freight being stolen electronically and
redirected. A lot of it is getting shipped out of the country.
This goes way beyond hit and run type of theft, the
straight theft that we have seen over 100 years with trucks.
This is a very complex, digitally driven renaissance. This is
really sophisticated stuff. A lot of it is being handled out of
Eastern Europe.
I was just over meeting with the European Parliament,
educating them on the problem in their backyard. They were
oblivious. They had absolutely no idea that a lot of the theft
that is occurring here in the United States is originating in
their backyard.
There needs to be an element, a Federal element that
coordinates that. The States' localities do not coordinate with
INTER-POL. That is a Federal responsibility between DHS, DOJ,
and DOT. Bringing them into the puzzle, completing that fabric
and being able to coordinate the broader implication beyond the
Southern border is really what we are looking for.
Mr. Tiffany. You are talking about all elements need to
work together; right?
Mr. Spear. All elements.
Mr. Tiffany. As Mr. Cohen or, no, Mr. Raskin commented
about this is not your average shoplifter. There are some
prosecutors who are going to have to up their game; right? I am
not referring to you. Mr. Issa gave a glowing review of the
work that you have done, District Attorney.
Isn't it correct that prosecutors need to do their job
also; is that correct?
Mr. Spear. Absolutely. It is just all the pieces have to
work. Nobody is trying to take jurisdiction from the others; it
is just fulfilling those parts and pieces.
Sharing information is step one. You have got to be able to
understand beyond one State where the cargo is moving. Is it
the origin where it originated? Is it in motion? Is it the
destination? That could, that could canvas multiple States.
Who do you file it with? Where does it go? That depository
is really needed.
Mr. Tiffany. I want to get one final question in for Mr.
McBride.
Which State policies targeting organized crime in your
opinion have been effective? What State policies have been
effective?
Mr. Biggs. The gentleman's time has expired. You may
answer, Mr. McBride.
Mr. McBride. Yes, Congressman. Thank you for the question.
There is multiple States that have enacted organized retail
crime laws. Those are being very, very effective within those
States. The challenge is we need that national level link
analysis and coordination center to be able to tie those
together. Thank you.
Mr. Biggs. The gentleman's time has expired. I now
recognize the gentleman from Alabama, Mr. Moore, for his five
minutes.
Mr. Moore. Thank you, Mr. Chair. Mr. McBride, have there
been changes in the types of merchandise targeted by criminals
in ORC?
Mr. McBride. Every single retailer--thank you for the
question, Congressman--every single retailer has a key set of
products that are being targeted by the organized retail crime
groups. In my case it is denim, it is jeans from American Eagle
Outfitters. It is the highly lucrative, most expensive item
that we sell on a regular basis.
Other retailers have their own products that are being
targeted. There were some photographs in the hearing room
earlier of those products that are being recovered on a daily
basis from law enforcement agencies at the local-State levels
all over the country.
Mr. Moore. Can you explain how certain policies led to an
increase in ORC?
Mr. McBride. In the post-COVID era--
Mr. Moore. The ones you feel that.
Mr. McBride. Yes. In the post-COVID era, the organized
retail crime groups took the time to retool. They have used the
internet encrypted apps to recruit known associates.
They have used leverage techniques and social engineering
to gain the upper hand on folks within the--armed citizens
within the United States to do the dirty work at the lowest
levels. They are sometimes minor. They are recruited and they
are expendable to those organizations. They will roll up the
next one to commit those crimes.
They have a multilevel organized set of command structures
that they use to boost, move, consolidate, and clean. Because
they will remove tickets, they will remove sensor antitheft
devices. They will throw away any GPS trackers that we insert
inside this cargo to try to be able to get eyes on the
movements. Then, they will exfiltrate that product out of the
country.
Mr. Moore. Are the jeans being lifted off the shelves? Or
how is that happening when you say they just, they come into
the stores themselves?
Mr. McBride. Correct. Correct, Congressman. In the retail
stores they are being boosted by what we call boosters; right?
They come in and commit mass thefts. They may come in and
overwhelm a staff in a store that may only have a few
associates working. They use intimidation tactics to try to
come back and revictimize the same locations over and over
again because it is easier for them.
We are also experiencing cargo theft. We had some of our
shipments interdicted. We have, as my fellow witness stated,
trucks that are broken into at truck stops, at red lights, in
the mall parking lot they will be removed.
Mr. Moore. Mr. Spear, I remember we were in the trucking
business growing up. I was in New York one night. We were in
the sleeper asleep and the truck started shaking.
All of a sudden we go back and they have cut the lock, and
they are stealing out the back of the truck. Now, it sounds
like it is almost and it is a technological advantage for the
criminal element; right?
How do they reroute this? Is that something they are doing
with the GPS system, or how are they sending these trucks?
Do they look official and then they send them an email and
say, hey, you are going here? How does that happen?
Mr. Spear. Yes, hackers will get into the systems. Bill of
ladings they can see, actually, the most expensive cargo.
That is what is different here. It is not just a hit and
run and we roll the dice, did we get something valuable? They
know what is in the truck. It could be pharmaceuticals. It
could be munitions. It could be a whole host of things that we
don't want criminals to even know is in the truck.
You can see that when you get into the system. They double
broker. They work with brokers. They are a facade. They are
going as a legitimate motor carrier. They are a front, they are
a false front. They intervene in that process as the broker
that's handling the freight from the shipper to the motor
carrier. They pose as a false carrier, basically.
Mr. Moore. Will they take it to a dock or a warehouse
somewhere normally or?
Mr. Spear. Yes, it will move in, generally, multiple
States. These are products that often end up going overseas.
Energy drinks are banned in multiple countries. Didn't know
that, actually?
Mr. Moore. It is like Coors beer used to be banned. In
Smokey and the Bandit they would move them East in the State.
Mr. Spear. Growing up in Wyoming I can understand.
Mr. Moore. You know all about that, don't you?
Mr. Spear. Yes, I do. Energy drinks they put them on the
black market in these banned countries. It is a very
sophisticated crime. It is not just the hit and run type of
crime that we have been familiar with for the last 100 years.
This is very crypto-driven criminal activity that is done
overseas, well abroad.
Mr. Moore. Yes. I was in New York that night, they stole
shrimp from our reefer unit. The thing was, they didn't know
what was in it. I am amazed now that they actually get the bill
of lading and know what they are stealing.
Mr. Bennett, one last question here. Do you think soft-on-
crime policies affect the safety of the employees and customers
inside Target stores?
Mr. Bennett. My experience is that we have seen violence in
our stores. That crime in our communities is problematic.
What is most important to us at Target is protecting our
teams and our guests. We certainly focus on that from the
strategy perspective.
Mr. Moore. I yield back.
Mr. Biggs. The gentleman yields back. The Chair recognizes
the gentleman from California, Mr. Kiley for his five minutes.
Mr. Kiley. Thank you, Mr. Speaker. In California, we have
had probably the worst retail crime problem in the country. You
go to our major cities, most of the things in basic convenience
stores are behind lock and key.
The cause of this is probably threefold: A lack of
resources for police; some rogue district attorneys like George
Gascon in L.A. who, fortunately, has been removed by the
voters; and then very weak laws when it comes to punishing
retail theft.
Things got so bad--we have a witness from Target here
today--that last year our Governor Gavin Newsom was visiting a
Target when a thief absconded with a variety of merchandise.
The Governor starts berating one of the Target employees,
saying, ``Why aren't you stopping them?''
Apparently the employee didn't recognize who she was
talking to and she said, ``Well, we can't because of the
Governor.''
Despite this, the Governor himself opposed an initiative
that I was part of last year to actually restore some real
consequences for retail theft in California. It eventually
became known as Prop. 36. The Governor led the opposition
against it. The State's political class closed ranks in
opposing Prop. 36.
Yet, at the end of the day it passed with 68 percent of the
vote. It passed in every single one of California's 58
counties, even Governor Newsom's San Francisco. It got more
votes than any other measure on the ballot, showing just how
fed up the people of California are with the rampant
lawlessness that is proving such a threat to business and to
safety.
We have a district attorney with us today. District
Attorney Stephan, I know that you are a supporter or at least
are grateful for the passage of Prop. 36. Can you just let us
know how it has improved the ability of your office to actually
hold criminals accountable and deter crime?
Ms. Stephan. Thank you, Representative Kiley, for your help
with this proposition. It has been a game changer for us.
We have been able to prosecute. It targets, as you know,
habitual offenders. It doesn't target the kid who makes a
mistake, but we are targeting the habitual offenders.
San Diego has already seen a 23 percent reduction in
property crimes. It still doesn't get to that high level
organized criminals that we need this legislation, the CORCA
legislation, for. It certainly has given us the tools to act.
Of course, something that I worked on for a whole year
alongside you and other leaders.
Mr. Kiley. That is right. The DA's Association really led
the charge on that. Thank you for all your work on it and what
you are doing now. We certainly need these measures at the
Federal level to supplement those new consequences.
Just out of curiosity, if you could have your wish as to
any other changes that we could work for in California to make
your office better able to protect the people of San Diego,
anything come to mind?
Ms. Stephan. Well, for now my wish is for the CORCA bill
that the national DA's Association supports and I support. We
don't know what we don't know. By having a database we will
learn information, connect the dots, and be able to go after
organized crime. There is really no other way to do it.
Mr. Kiley. Right. Well, thanks very much. We have made
crime illegal again, as say now in California, with this
initiative. We still have a long way to go. We have seen a real
improvement in no small part because of dedicated prosecutors
like yourself.
Thanks very much. I yield back.
Mr. Biggs. Will you yield to Mr. Knott?
Mr. Kiley. I would be happy to, yes.
Mr. Knott. Thank you, Mr. Kiley. I want to be sure we are
clarifying something here.
There is a lot of talk about names, organizations, and so
forth. In my experience as a prosecutor you have a local
incident, like a drug seizure. Then, you have repeated local
incidents, the same seizure, and the same person. There is a
search warrant for a device or a car and international contacts
are discovered.
You go up the chain, and you realize this is part of a much
larger operation. It is not every stop. It is not every
seizure. When you uncover an international organization with a
more sophisticated wheel, you have a forum in Federal law
enforcement to hand that case over to.
That is where I received the cases. We are talking about
whether it is drugs, whether it is firearms, whether it is
human trafficking, there is a forum when those incidents occur.
There is not a forum for retail theft. The retail theft is
occurring over, and over, and over with impunity. I just wanted
to clarify that. Is that consistent with what you have
experienced, Madam DA?
Ms. Stephan. That is absolutely the right description. We
have that. We have a forum for fentanyl where we handle some
cases, the Feds handle international cases. We have it for
scams. We have it for gang violence.
Mr. Knott. Yes.
Ms. Stephan. We do not have it for something that is
ripping off the places that are the heartbeat of America.
Mr. Knott. Right.
Ms. Stephan. Small businesses and large businesses.
Mr. Knott. That is right. It is literally--one more point,
Mr. Chair--it is literally I would get a--
Mr. Biggs. Quickly. Quickly.
Mr. Knott. --notebook of a Case Summary that said this
started local and now it is clearly international. Then, I
would work with local law enforcement to prosecute that case.
You can't do that with retail theft. We need to fix that.
Mr. Biggs. Thank you, Mr. Knott. Those are great points. I
appreciate that. I recognize myself for, for five minutes.
This kind of reminds me of the pre-1972ish idea in America
that there was no such thing as the Mafia. If you remember
that. Hard to believe that we went into the Seventies, the
movie The Godfather was required to remove the term Cosa Nostra
or Mafia from it by Joe Colombo, who was the head of New York
crime families, one of the five families.
This reminds me of that because no one know who the kingpin
is. We know that it involves international manipulation. We
know and suspect that, in my opinion, you also have South of
the border cartel activity as well directing this. Because I
live in Arizona and we see evidence of this.
This is a big thing that is happening. It is spreading and
it is growing. Even though I am certain that South of the
border cartels are involved, I am also just as certain that
there are other international kingpins that we have got to
reach out that are in China, Asia, Russia, Russia, and Europe.
I just want to report that not too many months ago I took a
tour of my local Walmart, big super Walmart place. I have been
to Target, too, but I didn't take the tour there. I just, I
have been to Target, too, so.
What do we find is they said, ``let us show you the aisle
from which we have had to take really decisive action because
it is the aisle from which most of our stuff was getting ripped
off. It is the Lego aisle.'' Everything is--that is hard to
believe. Nonetheless, they were stealing it.
They were doing exactly what you are saying, they are
ripping off a whole--like what you were describing with jeans--
somebody is coming in, they are boosting a whole bunch, getting
it out of there. Overwhelming the staff and moving it on some
marketplace, extraneous marketplace.
There is a definite need to resolve some of this issue.
I am going to ask you a question in a second, Mr. Spear. I
want to say that one of the things that has to happen at the
Federal level besides this national law that you are looking
for, which is CORCA, is you are going to have--the Feds have
got to do Southbound operations on the border.
We do Northbound operations endlessly. We send people back.
That is why you are seeing the slowdown. We don't do Southbound
operations very often. That dearth, that void allows truckloads
of various items to go South of the border without ever being
detected because we just don't have the personnel, nor the
strategy to interdict going South. Southbound operations it is
going to have to step up if we are going to really close this
thing down.
Mr. Spear, I wanted to ask you a question with regard to
your testimony on page 10 of your testimony. I am trying to
figure out your tables, Tables 8 and 9. I want you to explain
those to us.
Then, I also want you to talk about the large trucking
companies versus the smaller or 10 units and below trucking
companies because I am wondering is there a distinction.
Are the big companies sharing the ripoffs as much as the
smaller companies are?
Mr. Spear. Yes. If you look at page 10 of the written
testimony, Tables 8 and 9. Table 8 is centered on motor
carriers. These are actual trucking companies that are, are
moving the product. These are the States where we are
witnessing the most activity year over year.
As you can see, there is a lot of States in here that are
ports. We also have several that are inside the U.S. that also
have access to riverways like Tennessee.
It is the type of cargo. It is usually occurring in larger
cities, areas where there are ports, where there are ways that
you can move very quickly. That is the motor carrier chart.
Then, if you go into Table 9, that is the logistics service
provider chart. This is the strategic theft that I was speaking
about. This is the brokers, the third-party folks that handle,
intervene, that handle the shipments on behalf of the shipper,
the motor carrier. They are the brokers.
This is where the electronic element comes in, masking as a
motor carrier or a false business. Obtains the cargo and is
able to move it from State-to-State, even abroad. This is where
we have seen the 1,500 percent surge since 2021. This is the
escalating type of crime that is not just on the Southern
border, it is around the world.
The access through a laptop is the catalyst for doing that.
If you look at these States, you are also seeing a pretty
similar pattern to what you see for motor carriers. This is
where we really see the surge of cargo theft.
Mr. Biggs. Is there any distinction between large trucking
companies, particularly in the logistics portion, in the
hijacking the technology?
Mr. Spear. Yes. Some of our largest members have
experienced it in various ways. They have more interaction with
other modes with rail, for instance, who are listed in the 90-
plus supply chain sponsors supporting CORCA. They have a lot of
interaction, intermodal interaction with other modes as well.
There is a lot of connectivity and they are going to have a
lot more robust systems to see what is happening and track it.
They also have a lot more technology in the trucks, as well as
the trailers, to track that cargo.
To get down to 10 trucks or less operations, they are not
going to have the wherewithal to combat this, let alone the
ability to ``who do I call?'' Do I call it where the cargo
originated, where it is headed, or where the crime occurred?
Who do I call beyond State and local law enforcement?
There is no centerpiece to coordinate that. There is no
sharing and there is no understanding. That is the missing
piece of the puzzle that I think will bring in more capability
for the 10 trucks or less businesses.
We don't want to see those folks go under. They are very
important to local communities. They are doing the hard work
day-to-day. They are just as important as the largest members
of ATA.
Obviously, that is a direct interaction, too, with truck
drivers. We really do care about their safety as well.
Being able to train up and have that capability, we want
that to happen across all members, large and small. Giving them
that capability would be a huge step up. We believe CORCA does
that.
Mr. Biggs. Thank you. I appreciate each Member of our
panel, and your testimony, and your statement that is written
and incorporated into the record. We appreciate it.
This is an important topic to us. As I spoke to all of you
beforehand, this is necessary before you can even begin to move
a markup bill.
We have been called to vote. I am going to yield about 30
seconds max to my friend from North Carolina who is just
itching to ask another question, so.
Mr. Knott. Mr. Spear, just briefly, is there anything we
can do besides the criminal enforcement to assist in protecting
the marketplace from these sophisticated scams?
Mr. Spear. Yes. The enhanced enforcement, Federal, State,
local, and working with us. We have to invest in this. We have
got to train our employees just as much. That is all-important.
It is multiple pieces at the same time. What is missing is the
Federal.
The enforcement piece is important. I think better
information sharing is really, really critical.
We talked about that. Deputy District Attorney talked about
that in terms of other States and being able to see the
broader, bigger picture. That is where you are going to see
some of the bigger names and maybe who is behind this.
Mr. Knott. Yes.
Mr. Spear. Like I said, a lot of these folks want to stay
low on the radar. They don't want to be tracked.
Mr. Knott. The best criminals are the hardest to catch.
Mr. Spear. That is exactly right. You are seeing them grow
exponentially.
We think the information, the reporting, and the ability to
harbor that information is going to really, really help
Federal, State, local, as well as our industry understand the
bigger problem, connect the dots faster.
Again, this is all about speed.
Mr. Knott. Yes.
Mr. Spear. It is being able to act quickly and understand
that. You get this extra piece of the puzzle in there; we will
be in a better place to do that.
Mr. Knott. Thank you so much.
Mr. Biggs. Thank you, Mr. Knott. Thank you, Members of the
panel. Everyone will have five days to ask additional questions
or submit statements for the record.
With that, we are adjourned. Thank you.
[Whereupon, at 10:32 a.m., the Committee was adjourned.]
All materials submitted for the record by Members of the
Subcommittee on Crime and Federal Government Surveillance can
be found at: https://docs.house.gov/Committee/Calendar/ByEvent
.aspx?EventID=118765.
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