[Congressional Record (Bound Edition), Volume 156 (2010), Part 12]
[House]
[Pages 16921-16925]
[From the U.S. Government Publishing Office, www.gpo.gov]




    ORGANIZED RETAIL THEFT INVESTIGATION AND PROSECUTION ACT OF 2010

  Mr. SCOTT of Virginia. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 5932) to establish the Organized Retail Theft 
Investigation and Prosecution Unit in the Department of Justice, and 
for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 5932

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Organized Retail Theft 
     Investigation and Prosecution Act of 2010''.

     SEC. 2. ORGANIZED RETAIL THEFT INVESTIGATION AND PROSECUTION 
                   UNIT.

       (a) Establishment.--Not later than 180 days after the date 
     of enactment of this Act, the Attorney General shall 
     establish the Organized Retail Theft Investigation and 
     Prosecution Unit (hereinafter in this Act referred to as the 
     ``ORTIP Unit'').
       (b) Composition.--The ORTIP Unit shall include 
     representatives from the Federal Bureau of Investigation, 
     United States Immigration and Customs Enforcement, the United 
     States Secret Service, the United States Postal Inspection 
     Service, prosecutors, and any other personnel necessary to 
     carry out the duties of the ORTIP Unit.
       (c) Duties.--The duties of the ORTIP Unit are as follows:
       (1) To investigate and prosecute those instances of 
     organized retail theft over which the Department of Justice 
     has jurisdiction.
       (2) To assist State and local law enforcement agencies in 
     investigating and prosecuting organized retail theft.
       (3) To consult with key stakeholders, including retailers 
     and online marketplaces, to obtain information about 
     instances of and trends in organized retail theft.

     SEC. 3. DEFINITION.

       In this Act, the term ``organized retail theft'' means--
       (1) the obtaining of retail merchandise by illegal means 
     for the purpose of reselling or otherwise placing such 
     merchandise back into the stream of commerce; or
       (2) aiding or abetting the commission of or conspiring to 
     commit any of the acts described in paragraph (1).

     SEC. 4. REPORT.

       Not later than 1 year after the date of enactment of this 
     Act, the Attorney General shall submit a report containing 
     recommendations on how retailers, online businesses, and law 
     enforcement agencies can help prevent and combat organized 
     retail theft to the Chairs and Ranking Members of the 
     Committee on the Judiciary of the House of Representatives 
     and of the Committee on the Judiciary of the Senate. The 
     Attorney General shall make the report available to the 
     public on the web site of the Department of Justice.

     SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Attorney 
     General to carry out this Act, $5,000,000 for each of fiscal 
     years 2011 through 2015.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Virginia (Mr. Scott) and the gentleman from Texas (Mr. Smith) each will 
control 20 minutes.
  The Chair recognizes the gentleman from Virginia.


                             General Leave

  Mr. SCOTT of Virginia. Mr. Speaker, I ask unanimous consent that all 
Members have 5 legislative days to revise and extend their remarks and 
include extraneous material on the legislation under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Virginia?
  There was no objection.

                              {time}  2050

  Mr. SCOTT of Virginia. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, H.R. 5932 directs the Attorney General to establish an 
Organized Retail Theft Investigation and Prosecution Unit to combat the 
growing problem of organized retail crime.
  Theft from retail establishments has been a problem as long as stores 
have existed. The problem has gradually grown beyond simple isolated 
cases of shoplifting and burglary into something far more complex.
  It wasn't until the 1980s that organized retail theft was recognized 
as a phenomenon, and the problem has continued to grow in volume, 
sophistication and scope. Today, sophisticated, multilevel criminal 
organizations steal large amounts of high volume products, focusing on 
small and easily resalable items, and then they resell the goods 
through a variety means, including flea markets, smaller stores, and, 
increasingly the Internet. Sales of stolen items over the Internet have 
evolved to the point where there has been a new crime phenomenon 
referred to as ``E-fencing.''
  With organized retail theft reaching an estimated $30 billion to $42 
billion, it impacts everyone from the Big Box retailers to the small 
independent stores. This type of crime obviously has a direct impact on 
stores from which the items are stolen. They have fewer items in their 
inventory to sell and their profits suffer. To make up for it, they 
must pass along the burden to consumers in the form of higher prices.
  Consumer safety is also at risk when retail crime organizations steal 
consumable products, especially over-the-counter drug items and infant 
formula, two popular items for organized theft rings. In many cases, 
after merchandise has been stolen, the products are not stored 
properly, which can render the products ineffective or even dangerous.
  Retailers spend lots of time and resources trying to prevent such 
thefts and trying to catch the thieves, but it is becoming increasingly 
difficult to do so. Last year, the Judiciary Committee Subcommittee on 
Crime held a hearing about the role of the Federal law enforcement in 
combating this kind of crime. I was encouraged to see that agencies 
such as the FBI; Immigration and Customs Enforcement, ICE; the Secret 
Service; and postal inspectors all play a role in investigating 
organized retail theft.
  Through this hearing we learned that there is a definite need for 
Federal law enforcement agencies in this area because local enforcement 
agencies face unique challenges in combating organized retail theft. In 
particular, organized retail theft rings often operate in multiple 
jurisdictions, making it impossible for any one State or local law 
enforcement agency to investigate them and prosecute them effectively. 
In addition, the Internet has made it easier for such sellers to access 
a national, even international market, for buyers of stolen goods. 
Finally, the proceeds of these crimes are often laundered with 
tremendous sophistication.
  Because of these challenges and the threat this type of crime poses 
to our businesses, I believe we must have a better coordinated and much 
more concentrated Federal effort. H.R. 5932 accordingly directs the 
Attorney General to establish an Organized Retail Theft Investigation 
and Prosecution Unit comprised of Federal prosecutors and investigators 
from the FBI, ICE, the Secret Service, and the Postal Inspection 
Service. This unit will investigate and prosecute instances of 
organized retail theft under Federal jurisdiction as well as assist 
State and local law enforcement agencies in their efforts against these 
crimes.
  I want to thank the retail and online community for their support of 
this bill, and I commend their efforts to find ways to work together on 
this effort. We have also received letters in support of the bill from 
a number of major business groups, including the Coalition Against 
Retail Crime, the Food Marketing Institute, the National Association of 
Chain Drugstores, the Entertainment Merchants Association, the Retail 
Industry Leaders Association, and the National Retail Federation. EBay 
has also expressed support for the bill.
  I am pleased this bill has strong bipartisan support, and I would 
like to thank the committee chairman, the gentleman from Michigan, Mr. 
Conyers, the ranking member, the gentleman from Texas, Mr. Smith, and 
my colleague from Virginia, Mr. Goodlatte, for cosponsoring this 
important legislation and for their consistent commitment to this 
issue. I urge my colleagues to support H.R. 5932.

                                                 Coalition Against


                                        Organized Retail Crime

     Hon. Robert Scott,
     House Judiciary Committee, House of Representatives, 
         Washington, DC.
       Dear Congressman Scott: On behalf of the Coalition Against 
     Organized Retail Crime (CAORC) and our membership, we urge 
     you

[[Page 16922]]

     to support and pass H.R. 5932 the ``Organized Retail Theft 
     Investigation and Prosecution Act of 2010.'' This bipartisan 
     legislation, introduced by Representatives Conyers, Smith, 
     Scott and Goodlatte, is an important first step in addressing 
     this serious issue.
       The CAORC, formed in 2001, is comprised of major retailers, 
     grocers, product manufacturers and trade associations 
     committed to bringing attention to the harmful effects and 
     public safety risks associated with organized retail crime. 
     As you know, sophisticated and methodical organized retail 
     crime rings operate across state and local jurisdictions. 
     These crime rings often use organized retail crime to fund 
     other violent activities and utilize traditional money 
     laundering techniques to conceal their profits. It is time 
     the Department of Justice have the resources it needs to 
     effectively investigate and prosecute these criminals.
       Retailers spend millions of dollars on robust a security 
     and loss prevention effort, that protects their goods and 
     ensures consumer safety. They are continually upgrading and 
     adapting these programs to limit retail crime. Nevertheless, 
     this criminal activity continues to grow despite our best 
     efforts.
       We thank you for your consideration of H.R. 5932 and urge 
     its passage. We look forward to seeing this legislation 
     become law and working with you in the future to continue to 
     work on this crime epidemic.
           Sincerely,
     John G. Emling,
       Senior Vice President, Government Affairs, Retail Industry 
     Leaders Association.
                                  ____



                                     Food Marketing Institute,

                                Arlington, VA, September 20, 2010.
     Hon. Bobby Scott,
     House of Representatives,
     Washington, DC.
       Dear Representative Scott: The Food Marketing Institute 
     (FMI), on behalf of the nation's grocery industry, wishes to 
     express the industry's strong support for a bill (H.R. 5932) 
     entitled the ``Organized Retail Crime Theft Investigation and 
     Prosecution Act of 2010.'' This bi-partisan initiative, 
     sponsored by Representatives Bobby Scott (D-VA), John Conyers 
     (D-MI), Lamar Smith (R-TX) and Bob Goodlatte (R-VA), will 
     likely be scheduled for consideration and a vote on the floor 
     of the House on Thursday, September 23, 2010.
       If enacted into law, H.R. 5932 will establish a special 
     unit within the U.S. Department of Justice (DOJ) to 
     investigate and prosecute instances of organized retail theft 
     (ORT) over which DOJ has jurisdiction as well as provide 
     assistance to State and local law enforcement agencies in 
     their efforts against what is clearly a very serious criminal 
     problem in our country.
       The grocery industry is routinely victimized by 
     sophisticated theft rings that are responsible for stealing 
     millions of dollars worth of merchandise from our members' 
     stores annually. FMI firmly believes a more formal federal 
     response as called for in H.R. 5932 is needed because ORT 
     translates into as much as $30 billion in losses each year to 
     the retail community nationwide. Not only do consumers pay 
     higher prices as retailers attempt to recover losses 
     resulting from ORT, but state revenues are also adversely 
     impacted by approximately $1.6 billion in lost sales tax 
     revenue attributable to ORT activity.
       Most disturbing is the fact that our customers are often 
     placed at great risk when these criminal enterprises steal 
     certain FDA regulated products, such as infant formula, over-
     the-counter medications and diabetic supplies, and then 
     resell them in flea markets, pawn shops, swap meets, 
     questionable store front operations and more frequently in 
     recent years via internet auction sites. ORT rings have been 
     known to tamper with the contents of the product and to 
     change labels and expiration dates thereby endangering the 
     health and safety of unknowing consumers, especially infants 
     and the elderly.
       In closing, FMI endorses H.R. 5932 and we urge you to vote 
     in favor of this very important initiative.
           Sincerely,
                                                Leslie G. Sarasin,
     President and Chief Executive Officer.
                                  ____

       Entertainment


                                        Merchants Association,

                                   Encino, CA, September 22, 2010.
     Re: Organized Retail Theft Investigation and Prosecution Act 
         of 2010 (H.R. 5932).

     Hon. Robert C. Scott,
     Chairman, Subcommittee on Crime, Terrorism, and Homeland 
         Security, Committee on the Judiciary, House of 
         Representatives, Washington, DC.
       Dear Mr. Chairman: I am writing on behalf of the 
     Entertainment Merchants Association (EMA) and the 
     approximately 40,000 retail locations operated by our members 
     throughout the United States to express support for the 
     Organized Retail Theft Investigation and Prosecution Act of 
     2010 (H.R. 5932). We commend you for introducing this 
     important measure.
       Unfortunately, the relatively small size and high 
     desirability of DVDs and video games make them popular 
     targets for organized retail crime perpetrators. Based on the 
     ``shrink'' experience of our members, EMA estimates the loss 
     to retailers in 2008 from DVD shrink (both internal and 
     external sources) to be $449 million and from video game 
     shrink to be $197 million. (Not all of these losses are 
     attributable to organized retail crime, of course.) The 
     losses are even more harmful in light of the 13% decline in 
     DVD sales and 11% decline in video game software sales in 
     2009. The growth of organized retail crime undoubtedly 
     contributes to these declines in sales.
       EMA believes that federal organized retail crime 
     legislation can help stem the shrink of DVD and video games. 
     Specifically, EMA advocates, in part, that federal law should 
     specifically criminalize organized retail crime, prevent 
     criminal gangs from using online marketplaces as fencing 
     bazaars, crack down on counterfeit devices that are used to 
     facilitate organized retail crime, and provide additional 
     resources to investigate and prosecute organized retail 
     crime. (We believe this can and should be done without either 
     unduly impairing the ability of video and video game 
     retailers to participate in the used DVD and video game 
     market or undermining the First Sale provision of the 
     Copyright Act (permitting the resale, rental, or other 
     alienation of a lawfully made copy of a copyrighted work 
     without authorization from the copyright holder), which 
     promotes vigorous retail competition and the wide 
     dissemination of popular works.)
       H.R. 5932 would establish an Organized Retail Theft 
     Investigation and Prosecution Unit (ORTIP Unit) in the 
     Department of Justice that would be staffed with 
     investigators, prosecutors and others. The ORTIP Unit would 
     be responsible for investigating and prosecuting instances of 
     organized retail theft, over which the Department of Justice 
     has jurisdiction, assisting State and local law enforcement 
     agencies in investigating and prosecuting organized retail 
     theft. and consulting with and advising victims of organized 
     retail theft. The bill would define ``organized retail 
     theft'' as obtaining retail merchandise by illegal means for 
     the purpose of reselling or otherwise placing such 
     merchandise back into the stream of commerce, aiding or 
     abetting the commission of such acts, or conspiring to commit 
     such acts. H.R. 5932 would also require the Attorney General 
     to submit a report containing recommendations on how 
     retailers, online businesses, and law enforcement agencies 
     can help prevent and combat organized retail theft. Finally, 
     it authorizes $5 million per year for fiscal years 2011 
     through 2015 to fund the ORTIP Unit.
       EMA believes that the Organized Retail Theft Investigation 
     and Prosecution Act of 2010 will enhance the federal 
     government's focus and provide beneficial coordination among 
     all levels of government on organized retail crime. We, 
     therefore, urge its adoption.
       About Entertainment Merchants Association
       The Entertainment Merchants Association (EMA) is the not-
     for-profit international trade association dedicated to 
     advancing the interests of the $34 billion home entertainment 
     industry. EMA-member companies operate approximately 35,000 
     retail outlets in the U.S. and 45,000 around the world that 
     sell and/or rent DVDs, computer and console video games, and 
     digitally distributed versions of these products. Membership 
     comprises the full spectrum of retailers (from single-store 
     specialists to multi-line mass merchants, and both brick and 
     mortar and online stores), distributors, the home video 
     divisions of major and independent motion picture studios, 
     video game publishers, and other related businesses that 
     constitute and support the home entertainment industry. EMA 
     was established in April 2006 through the merger of the Video 
     Software Dealers Association (VSDA) and the Interactive 
     Entertainment Merchants Association (IEMA).
       If you have any questions or need further information, you 
     may contact me.
       Thank you for the opportunity to express our support for 
     this much-needed bill.
           Sincerely,
                                              Sean Devlin Bersell,
     Vice President, Public Affairs.
                                  ____

                                              National Association


                                         of Chain Drug Stores,

                               Alexandria, VA, September 21, 2010.
     Hon. Bobby Scott,
     House of Representatives, Longworth House Office Building, 
         Washington, DC.
     Hon. Lamar Smith,
     House of Representatives, Rayburn House Office Building, 
         Washington, DC.
       Dear Representatives Scott and Smith: The National 
     Association of Chain Drug Stores (NACDS) is writing to thank 
     you for your extraordinary leadership in the fight against 
     organized retail crime (ORC) by introducing and advancing 
     H.R. 5932, the Organized Retail Theft Investigation and 
     Prosecution Act of 2010. This bipartisan legislation is a 
     strong first step to stem the growing problem of organized 
     retail crime by creating a specific task force within the 
     U.S. Department of Justice to investigate and prosecute 
     instances involving ORC.
       NACDS represents traditional drug stores, supermarkets, and 
     mass merchants with pharmacies. Its more than 170 chain 
     member companies include regional chains with a

[[Page 16923]]

     minimum of four stores to national companies. NACDS members 
     also include more than 1,000 suppliers of pharmacy and front-
     end products, and nearly 90 international members 
     representing 29 countries. Chains operate more than 39,000 
     pharmacies, and employ a total of more than 2.5 million 
     employees, including 118,000 pharmacists. They fill more than 
     2.5 billion prescriptions yearly, and have annual sales of 
     over $750 billion. For more information about NACDS, visit 
     www.NACDS.org.
       As you know, organized retail crime is responsible for over 
     $30 billion in losses annually, resulting in increased costs 
     for merchants, higher prices for consumers, and lost tax 
     revenue for state and local governments. In addition to 
     increased costs faced by retailers to cover losses and 
     investment in additional security measures, consumers are 
     placed at risk when package tampering occurs on consumer 
     health care products, such as infant formula and OTC 
     medications. These stolen products are repackaged and 
     relabeled to falsely extend a product's expiration date or to 
     hide the fact that the item has been stolen.
       NACDS has long advocated for federal legislation that 
     treats theft committed by organized, professional crime rings 
     as a federal felony--especially since much of the stolen 
     product is transported across state lines. Therefore, as 
     Congress continues to examine this issue, we would strongly 
     urge you to consider enacting legislation, such as H.R. 1173, 
     the Organized Retail Crime Act of 2009, which would give 
     federal law enforcement officials the authority to pursue and 
     prosecute individuals who engage in such criminal activities, 
     and H.R. 1166, the E-fencing Enforcement Act of 2009, which 
     would combat the growing problem of the use of online 
     marketplaces by criminals to redistribute stolen merchandise, 
     including those obtained through organized retail crime.
       We commend you again for introducing and advancing strong 
     bipartisan legislation that will assist retailers and law 
     enforcement combat the serious problem of organized retail 
     crime, and we look forward to working with you to enact this 
     important legislation.
           Sincerely,
                                               Steven C. Anderson,
     President and Chief Executive Officer.
                                  ____

                                                   Retail Industry


                                          Leaders Association,

                                                    Arlington, VA.
     House of Representatives,
     Washington, DC.
       Dear Congressman Scott: On behalf of the Coalition Against 
     Organized Retail Crime (CAORC) and our membership, we would 
     urge you to vote in favor of H.R. 5932 the ``Organized Retail 
     Theft Investigation and Prosecution Act of 2010'' when it 
     comes before the full body later this week.
       RILA is a trade association of the largest and most 
     successful companies in the retail industry. Its member 
     companies include more than 200 retailers, product 
     manufacturers, and service suppliers, which together account 
     for more than $1.5 trillion in annual sales. RILA members 
     operate more than 100,000 stores, manufacturing facilities 
     and distribution centers, have facilities in all 50 states, 
     and provide millions of jobs domestically and worldwide.
       This bipartisan legislation, introduced by Representatives 
     Conyers, Smith, Scott and Goodlatte, would create a unit 
     inside the Department of Justice dedicated to investigating 
     and prosecuting organized retail crime (ORC) and assisting 
     state and local law enforcement and prosecuting agencies.
       As the U.S Immigration and Customs Enforcement has 
     indicated, ``ORC rings are very sophisticated, 
     compartmentalized and operate similar to criminal 
     organizations involved in drug trafficking or human 
     smuggling. Furthermore, transnational criminal syndicates 
     such as Eastern European street gangs and organized crime 
     elements have become increasingly involved, and utilize 
     traditional money laundering techniques to conceal their 
     profits.'' Furthermore, estimates conclude this crime costs 
     retailers tens of billions of dollars per year and deprives 
     states of hundreds of millions of dollars in lost sales tax 
     revenue.
       Retailers spend millions of dollars on robust a security 
     and loss prevention effort, that protects their goods and 
     ensures consumer safety. They are continually upgrading and 
     adapting these programs to limit retail crime. Nevertheless, 
     this criminal activity continues to grow despite their best 
     efforts.
       Once again, we ask you to support H.R. 5932.
           Sincerely,
                                                   John G. Emling,
     Senior Vice President, Government Affairs.
                                  ____



                                   National Retail Federation,

                               Washington, DC, September 22, 2010.
     Re: Support the ``Organized Retail Theft Investigation and 
         Prosecution Act of 2010'' (H.R. 5932).

     Hon. Nancy Pelosi,
     Speaker of the House, House of Representatives, The Capitol, 
         Washington, DC.
       Dear Speaker Pelosi: On behalf of the National Retail 
     Federation (NRF), I am writing to you today to urge your 
     support for the ``Organized Retail Theft Investigation and 
     Prosecution Act of 2010'' (H.R. 5932) when it comes up for a 
     vote on the suspension calendar this week. We believe this 
     bill is one of the keys to protecting both retailers and 
     consumers against the massive economic costs and very real 
     public health and safety risks posed by organized retail 
     crime. Establishing a team of law enforcement professionals 
     dedicated to fighting these crimes and working in close 
     consultation with retailers shows the importance of this 
     issue to industry, consumers and law enforcement, and serves 
     as an important deterrent to perpetrators.
       Retailers lose between $15 and $30 billion to organized 
     retail crime (ORC) each year, according to the FBI and retail 
     loss prevention experts. In addition, 89 percent of retailers 
     reported that they were victims of organized retail crime in 
     the past year, according to an annual NRF survey released 
     earlier this year.
       ORC rings typically target everyday consumer products that 
     are in high demand and easy to steal, such as infant formula, 
     razor blades, batteries, analgesics, cosmetics and gift 
     cards. More expensive products such as DVDs, CDs, video 
     games, designer clothing and electronics are also highly 
     prized. Once stolen, the goods are resold at pawn shops, flea 
     markets, swap meets and on the Internet. These thefts force 
     retailers to increase prices to cover the losses, and also 
     threaten public health when crime rings tamper with items 
     such as infant formula or medication by extending expiration 
     dates or repackaging and relabeling the items.
       This bill will be an important tool in the fight against 
     ORC. It would accomplish this through several key steps. 
     First, it would create an Organized Retail Theft 
     Investigation and Prosecution Unit (ORTIP Unit) in the 
     Department of Justice staffed with investigators, prosecutors 
     and other personnel charged with investigating and 
     prosecuting instances of ORC over which the Department of 
     Justice has jurisdiction. Second, it would define ``organized 
     retail theft'' as obtaining retail merchandise by illegal 
     means for the purpose of reselling or otherwise placing such 
     merchandise back into the stream of commerce, aiding or 
     abetting the commission of such acts, or conspiring to commit 
     such acts. Third, it requires the Attorney General to submit 
     a report containing recommendations on how retailers, online 
     businesses and law enforcement agencies can help prevent and 
     combat organized retail crime. Finally, it authorizes $5 
     million per year for fiscal years 2011 through 2015 to fund 
     the ORTIP Unit.
       As the world's largest retail trade association and the 
     voice of retail worldwide, NRF's global membership includes 
     retailers of all sizes, formats and channels of distribution 
     as well as chain restaurants and industry partners from the 
     United States and more than 45 countries abroad. In the 
     United States, NRF represents the breadth and diversity of an 
     industry with more than 1.6 million American companies that 
     employ nearly 25 million workers and generated 2009 sales of 
     $2.3 trillion.
       We thank Representatives Bobby Scott (D-VA), John Conyers 
     (D-MI), Lamar Smith (R- TX) and Bob Goodlatte (R-VA) for 
     their leadership on this important issue. We urge all members 
     of Congress to support their efforts and vote in favor of 
     H.R. 5932.
           Sincerely,

                                                Steve Pfister,

                                            Senior Vice President,
                                             Government Relations.

  I reserve the balance of my time.
  Mr. SMITH of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, H.R. 5932, the Organized Retail Theft Investigation and 
Prosecution Act of 2010, is an important step in combating a crime that 
costs retailers and taxpayers billions of dollars every year. I am 
pleased to join my Judiciary Committee colleagues Chairman Conyers, 
Chairman Scott, and Congressman Goodlatte as an original sponsor of 
this legislation.
  Organized retail theft involves the theft of large quantities of 
merchandise from retail stores. Unlike shoplifters, these thieves steal 
the merchandise with the intention of selling it back into the 
marketplace.
  In the past, the majority of these stolen goods were resold at swap 
meets, flea markets, or pawn shops. Today, the most popular venue for 
selling stolen goods is the Internet. Web sites such as eBay, 
Craigslist, and Amazon are being exploited by organized retail thieves 
to sell their stolen goods with relative ease and anonymity. This 
dynamic makes it increasingly more difficult for retailers and law 
enforcement agents to identify and apprehend these thieves.
  According to FBI estimates, organized retail theft rings cost 
businesses more than $30 billion in losses annually. A recent survey 
conducted by the National Retail Federation found that

[[Page 16924]]

nearly 90 percent of the retailers surveyed have been victimized by 
organized retail theft, an 11 percent increase from 2007. The survey 
also found that roughly 6 out of 10 retailers have seen an increase in 
organized retail theft in just the last 12 months.
  In 2003, the FBI established an Organized Retail Crime Initiative to 
identify and dismantle large multijurisdictional organized retail crime 
rings. This initiative included the formation of a National Retail 
Federation FBI intelligence network. The network is intended to 
establish an effective means of sharing organized retail crime 
information and intelligence to discuss trends as they relate to 
specific sectors and regions of the retail market, and to identify and 
target the more sophisticated criminal enterprises.
  Earlier this year, the National Retail Federation partnered with eBay 
to develop greater information sharing between eBay and participating 
retailers. This partnership is a significant step forward in the fight 
against organized retail theft. Bringing these two industries together 
will hopefully increase the likelihood of linking thefts from retail 
stores to goods offered for sale on eBay's Web site.
  H.R. 5932 builds upon these efforts by increasing the Federal 
resources dedicated to organized retail theft investigation. The bill 
requires the Attorney General to establish an Organized Retail Theft 
Investigation and Prosecution Unit within the Department of Justice. 
This unit will include representatives from the FBI, ICE, the U.S. 
Secret Service and postal inspectors, as well as prosecutors.
  The unit will investigate and prosecute large-scale organized retail 
thefts and provide assistance to State and local law enforcement 
agencies. The unit will also work in consultation with retailers and 
online marketplaces to gather information about and identify trends in 
organized retail thefts.
  H.R. 5932 instructs the Attorney General to prepare a report to 
Congress on how retailers and law enforcement agencies can best combat 
OCR. The bill authorizes $5 million a year over 5 years to operate the 
unit.
  This legislation is supported by the National Retail Federation, the 
Retail Industry Leaders Association, the Coalition Against Organized 
Retail Crime, the Food Marketing Institute, the National Association of 
Chain Drugstores, eBay, and the Entertainment Merchants Association.
  I would like to thank my colleagues again, Chairman Conyers, Chairman 
Scott, and Congressman Goodlatte for their dedication to this issue and 
for working together to draft this bipartisan legislation. I urge my 
colleagues to support this bill.
  Mr. Speaker, I hope the individual I just mentioned, the gentleman 
from Virginia, Mr. Goodlatte, is on his way to the floor, and I hope he 
will be able to speak on this bill shortly. So I reserve the balance of 
my time.
  Mr. SCOTT of Virginia. Mr. Speaker, I have no further requests for 
time, and I reserve the balance of my time.
  Mr. SMITH of Texas. Mr. Speaker, I appreciate the indulgence of the 
gentleman from Virginia (Mr. Scott), but since our expected speaker is 
not yet on the floor and I am not entirely certain of the time of his 
arrival, although I am stalling slightly, I will yield back the balance 
of my time.
  Mr. SCOTT of Virginia. As has been said, Mr. Speaker, I have no 
further requests for time. I would like to thank the gentleman from 
Texas for his strong support.
  Mr. Speaker, I yield such time as he may consume to my colleague, the 
gentleman from Virginia (Mr. Goodlatte).

                              {time}  2100

  Mr. GOODLATTE. Mr. Speaker, I rise in support of H.R. 5932, the 
Organized Retail Theft Investigation and Prosecution Act of 2010. This 
legislation is an important step in combating a growing threat to 
retailers and consumers.
  I am pleased to join my Judiciary Committee colleagues Chairman 
Conyers, Ranking Member Smith and Chairman Scott as an original sponsor 
of this legislation, and I thank the gentleman for true bipartisanship 
in allowing me to catch my breath in order to be able to give these 
remarks.
  Organized retail theft is a huge and growing problem in the United 
States. According to FBI estimates, organized retail theft rings cost 
businesses more than $30 billion in losses annually. Organized retail 
theft groups target anything from everyday household commodities to 
health products to baby formula that can be easily sold through flea 
markets, swap meets, shady storefront operations, and through online 
marketplaces.
  Thieves often travel from retail store to retail store, stealing 
relatively small amounts of goods from each store but cumulatively 
stealing significant amounts of goods. Once stolen, these products are 
sold back to fencing operations, which can dilute, alter, repackage the 
goods, and then resell them, sometimes back to the same stores from 
which the products were originally stolen. These goods are also sold at 
flea markets, pawn shops and increasingly on the Internet.
  When a product does not travel through the authorized channels of 
distribution, there is an increased potential that the product has been 
altered, diluted, reproduced, and/or repackaged. These so-called 
``diverted products'' pose significant health risks to the public, 
especially the diverted medications and food products. Diverted 
products also cause considerable financial losses for legitimate 
manufacturers and retailers. Ultimately, the consumers bear the brunt 
of these losses as retail establishments are forced to raise prices to 
cover the additional costs of security and theft prevention measures.
  Even more troubling is where the money is going. We have seen 
evidence that organized retail theft is increasingly being used to fund 
international organized crime and other nefarious activities. At the 
State level, organized retail theft crimes are normally prosecuted 
under State shoplifting statutes as mere misdemeanors. As a result, the 
thieves who participate in organized retail crime rings typically 
receive the same punishment as common shoplifters. The thieves who are 
convicted usually see very limited jail time or are placed on 
probation.
  I believe that the punishment does not fit the crime in these 
situations. Mere slaps on the wrists of these criminals have 
practically no deterrent effect. In addition, the low-level criminals 
who are actually stealing these goods from the shelves are easily 
replaced by the criminal organization's higher level coordinators.
  During my 8 years of working on ways to combat organized retail 
theft, I found that the Federal law enforcement community believed it 
had adequate Federal laws to prosecute organized retail theft crimes, 
but that poor communication, lack of coordination among State and local 
law enforcement and lack of resources were major impediments to 
effective enforcement.
  In order to improve the communications and intelligence-sharing 
between industry and law enforcement, I offered an amendment to the 
Department of Justice's reauthorization bill back in 2005, which 
created a Federal definition of organized retail theft crimes and 
directed the FBI to contribute to the construction of a national 
database housed in the private sector where retail establishments, as 
well as Federal, State and local law enforcement, could compile 
evidence on specific organized retail theft crimes to aid 
investigations and prosecutions. This database, which has now become 
the current LERPnet, has helped to put the pieces together to show the 
organized and multi-state nature of these crimes as well as to provide 
important evidence for prosecutions.
  I am also pleased to report that the private sector is working 
together to address this problem. Earlier this year, the National 
Retail Federation partnered with eBay to develop greater information 
sharing between eBay and participating retailers. This partnership will 
hopefully increase the likelihood that more organized retail theft will 
be detected and prosecuted. H.R. 5932 will build upon the successes of 
these efforts to provide additional resources to the FBI to investigate 
organized retail theft.

[[Page 16925]]

  The bill funds and requires the Attorney General to establish an 
organized retail theft investigation and prosecution unit within the 
Department of Justice. This unit will include representatives from the 
FBI, ICE, U.S. Secret Service, and postal inspectors, as well as 
prosecutors. The unit will investigate and prosecute large-scale 
organized retail thefts and will provide assistance to State and local 
law enforcement agencies. The unit will also work in consultation with 
retailers and online marketplaces to gather information about and 
identify trends in organized retail thefts.
  In addition, H.R. 5932 instructs the Attorney General to prepare a 
report to Congress on how retailers and law enforcement agencies can 
best combat organized retail theft. This legislation is supported by 
the National Retail Federation, the Retail Industry Leaders 
Association, the Coalition Against Organized Retail Crime, the Food 
Marketing Institute, the National Association of Chain Drug Stores, 
eBay, and the Entertainment Merchants Association.
  Again, I wish to thank my colleagues Chairman Conyers, Ranking Member 
Smith and Chairman Scott for their dedication to this issue and for 
working with me to draft this bipartisan legislation. I urge my 
colleagues to support the bill.
  Mr. SMITH of Texas. Mr. Speaker, I yield back the balance of my time.
  Mr. SCOTT of Virginia. Mr. Speaker, I would urge my colleagues to 
support H.R. 5932, and I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Virginia (Mr. Scott) that the House suspend the rules 
and pass the bill, H.R. 5932, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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