CSPAN - Hearing on Organized Retail Theft

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July 19, 2025 15:44-17:30 - CSPAN

01:45:56

Hearing on Organized Retail Theft

Participants

Main

ashley moody

sen/r 05:13

chuck grassley

sen/r 13:29

dick durbin

sen/d 09:18

Appearances

alex padilla

sen/d 02:35

amy klobuchar

sen/d 02:02

chris coons

sen/d 02:20

john cornyn

sen/r 03:52

katie britt

sen/r 01:46

marsha blackburn

rep/r 02:26

mazie hirono

sen/d 02:45

sheldon whitehouse

sen/d 02:46

Clips

adam goodman

r 00:04

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Speaker	Time	Text
unidentified		Over a year of historic moments.
		Only on the C-SPAN networks.
		Democracy.
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		A process shaped by leaders elected to the highest offices and entrusted to a select few with guarding its basic principles.
		It's where debates unfold, decisions are made, and the nation's course is charted.
		Democracy in real time.
		This is your government at work.
		This is C-SPAN, giving you your democracy unfiltered.
		Coming up, a Senate Judiciary Committee hearing looking at organized retail and cargo theft.
		Witnesses, including the San Diego County District Attorney, testified about the impact of these thefts on supply chains and the cost of goods.
		They also examined how overseas criminal organizations and cartels are using the money to fund illicit activities.
		This is an hour and 40 minutes.
chuck grassley ▲ ● ▼		Morning, everybody.
		Today's hearing addresses the continued rise in organized retail and supply chain crime and the criminal networks that are involved in that criminal activity.
		We've all seen videos of mobs ransacking stores of thousands of dollars of goods and doing it in a very short period of time.
		Somebody measured one time, two minutes.
		The reality is, some of the worst criminal organizations, including cartels, terrorists, and human traffickers, use this type of crime, funding their misdeeds or launder ill-gotten proceeds.
		These groups steal large quantities of merchandise from retail stores and the supply chain, then attempt to resell these stolen items online and through other illicit channels.
		One Homeland Security investigation operation called King of Thieves uncovered organized retail crime ring, which has sent millions of dollars in criminal proceeds overseas.
		That same group financed coyote fees for deported individuals to return to the United States.
		Earlier this year in Katy, Texas, law enforcement discovered that mall thieves were linked to cartels responsible for over $100 million in thefts across the United States.
		So far, law enforcement officials have linked 98 individuals to this ring.
		This threat has involved, evolved to our supply chains, exposing significant vulnerabilities.
		The Justice Department recently indicted 11 defendants, including nine illegal immigrants, with stealing nearly half a million dollars worth of Nike shoes.
		The defendants' new valuable goods were in the train cars based on visible, high-security locks.
		The defendant cut the air hose to the train's braking system, which can cause derailments and serious injuries.
		Criminals see this type of crime as a low-risk, very high-reward way to fund their enterprises with no regard for the people that they endanger.
		It's not just luxury goods these thieves are after.
		Items in food and beverage categories are among the most stolen in supply chain crime.
		These goods are transported in specific ways to maintain food safety, from infant formula to basic groceries.
		Once a seal is broken and a single pallet of goods is stolen, the entire container is no longer safe for consumption.
		Congress must treat these acts for what they are.
		They're acts of violent, sophisticated criminals exploiting a patchwork system.
		Efforts to address this sweeping problem through civil actions are insufficient.
		Criminal action must be met with criminal punishment.
		Federal coordination is needed to share information, promote collaborative investigations, and fully address this sweeping cross-jurisdictional crime that impacts all Americans.
		Homeland Security investigators estimate that the average American family will pay more than $500 annually in additional costs due to the impact of organized retail crime.
		This is one of the many reasons 38 states Attorney General support Senator Cortez-Mestos and my bill.
		The bill goes by the title of Combating Organized Retail Crime.
		Many of the signatories on this letter are from members of this committee's home state.
		They wrote, quote, this legislation would provide the necessary resources at the state and federal level to bring organizations and individuals behind this nationwide problem to justice, end of quote.
		So without objection, I'll enter the letter into the record and now call on Ranking Member Senator Derman for his opening statement.
dick durbin ▲ ● ▼		Thanks, Chairman Grassley, for holding this hearing to look into large-scale theft of retail products that are then sold to unsuspecting consumers, often on online marketplaces.
		This is not a new problem.
		Back in 2008, I met with Home Depot.
		They told me the story about a drill that they sold exclusively that was being found for sale new in the box and at a discount by sellers online.
		It had to have been stolen some part of the manufacturing or sales process.
		And it wasn't just tools.
		This was and still is happening in all kinds of products, all kinds of stores, including cosmetics, electronics, clothes, over-the-counter drugs, toys, and as the chairman said, food and other things.
		I remember when the CEO of Walgreens came in to see me based out of Illinois, and I said, now why do I have to call a clerk at your drugstore when I want to buy under Arm deodorant so they can unlock the shelf and I can buy the gun?
		Are these so precious that they have to have special surveillance and guarding?
		And he said, the fact of the matter is, retail theft takes these things in volume and sells them in volume.
		And of course, it's not the individual that's likely to be the one to sell it.
		It's some sort of an operation, which we're going to talk about today.
		This is a problem that affects everybody.
		Higher prices, lost jobs, and lost community investment when shops that can't keep up with the rising costs of theft are forced to close their doors.
		I've worked on this issue for a long time.
		As chairman of the committee years ago, I held a hearing on cleaning up online marketplace to protect consumers from stolen, counterfeit, and unsafe goods.
		Not long after Congress passed my Informed Consumers Act, bipartisan bill I introduced with Senator Bill Cassidy, Republican of Louisiana.
		This law requires online marketplaces to collect, verify, and disclose information about high-volume sellers who offer new or unused consumer products for sale on the platform.
		Remember that Home Depot drill that I talked to you about earlier?
		When they found out that it was being sold online and clearly had been stolen, they contacted the online operation and said, this is a stolen product.
		There's no doubt about it.
		And the online operation said, so what's?
		That's not our responsibility.
		That's somebody else's.
		Well, this bill, the Informed Bill, changed that.
		The Informed Consumers Act is guided by three principles, verification, transparency, and accountability.
		If someone's going to sell a large volume of goods online on a marketplace, they should tell the marketplace who they are.
		Home Depot couldn't figure out who was selling these drills.
		The online operation wouldn't identify their user.
		The sellers should be verified.
		Second, if a product sold online turns out to be a fake, stolen, or dangerous, consumers should be able to report it and find the seller.
		And the marketplace must ensure the seller can't just disappear and pop up later with a new account name.
		Third, if a consumer orders a product from one seller online and the order is actually filled by another company, the marketplace should let the consumer know.
		I'm sad to report to you that despite two years that we passed this bill, the Federal Trade Commission has literally dropped the ball on enforcing the Informed Consumer Act.
		It's been more than two years since this law went in effect.
		The Federal Trade Commission hasn't even promulgated regulations in two years to implement it.
		The FTC has received hundreds of complaints regarding violations of this law, but how many enforcement actions has this agency taken?
		None.
		Zero.
		This is unacceptable and it must change.
		The Federal Trade Commission has to step up and enforce the law that we passed and the President signed.
		In the meantime, state and local governments have stepped up their efforts.
		In May in my home state of Illinois, Cook County Regional Organized Crime Task Force brought together more than 100 law enforcement agencies and 30 major retailers for a crackdown that resulted in hundreds of arrests across 28 states.
		That is a success we must build on.
		Federal law enforcement also has an important role to play, but we must acknowledge this administration has announced different priorities.
		Instead of combating crimes like I described, the Trump administration has diverted critical resources toward the President's mass deportation agenda.
		Homeland Security Investigations, better known as HSI, plays a leading role in combating criminal networks and organized crime, including organized retail theft.
		But under this administration, HSI has been diverted toward rounding up immigrants, many of whom pose no threat whatsoever to this country.
		According to one recent report, and I quote, HSI supervisors have waived agents off new cases so they have more time to make immigration enforcement arrests.
		One veteran agent said, no drug cases, no human trafficking, no child exploitation.
		It's infuriating.
		Instead, he said, HSI is, quote, arresting gardeners.
		These are not the actions of an administration serious about combating crime.
		Diverting federal resources endangers Americans and leaves us less equipped to target and disrupt criminals like those organized in organized retail theft.
		We have to have an open and honest discussion about the role of the federal government in reducing organized retail crime.
		I look forward to that dialogue today.
		Thank you, Mr. Chairman.
chuck grassley ▲ ● ▼		Thank you.
		Before I introduce our witnesses, I'll say thank you for the time that you put in to prepare for this and going out of your way to be with us to help us solve this very important issue.
		Our first witness, the Honorable David J. Dlowy, President Chief Executive Officer, National Insurance Crime Bureau.
		In this role, Mr. Lowe leads a united effort among property casualty insurance companies, law enforcement agencies, car rental companies, and other partners to combat insurance fraud.
		He served in the intelligence community and law enforcement for 20 years or more.
		Before retiring from public service, he was the Senate confirmed Undersecretary of Homeland Security for Intelligence Analysis, and he happens to come from the state of Iowa.
dick durbin ▲ ● ▼		Really?
chuck grassley ▲ ● ▼		Really?
unidentified		Yeah.
chuck grassley ▲ ● ▼		Donna Lam.
		Mrs. Lamb is Chief Strategy Officer of IMC Logistics, an intermodal carrier, and the largest Marine short-distance transport provider in our country.
		She's a known leader in the industry, having worked in logistics and transportation for over 30 years.
		IMC is based in Memphis, Tennessee, one of the nation's largest freight hubs.
		Scott McBride, the Chief Global Asset Protection Officer for American Eagle Outfitters.
		After serving as a Marine, Mr. McBride started his career at American Eagle as a store associate in 1993.
		He's been with the company, obviously, for more than 30 years.
		Mr. McBride is also chairperson of the Loss Prevention Asset Protection Council at the National Retail Federation.
		He recently received Loss Prevention Magazine Founders Award for Excellence in Leadership.
		District Attorney Summer Steffen.
		Mrs. Steffen is the current president of the National District Attorneys Association.
		She's the district attorney for San Diego County, California, the second largest DA office in California and the fifth largest in the United States.
		As district attorney, Mrs. Steffen created a specialized team to investigate and prosecute organized retail crime cases, working closely with businesses and law enforcement.
		She's recognized as the national leader in combating human trafficking and sex crimes as well as organized retail theft.
		Now, I'm going to ask you folks to stand so we swear you in.
		Do you swear that the testimony you're about to give before this committee will be the truth, the whole truth, and nothing but the truth?
		So help you God.
unidentified		They all have said yes.
chuck grassley ▲ ● ▼		Now you may give your opening statement from Gloway across the table there.
chuck grassley ▲ ● ▼		So please begin, Mr. Gloway.
unidentified		Chairman Grassley, Ranking Member Durbin, and members of the committee, thank you for the invitation to testify in holding this important hearing on organized retail and cargo theft.
		I'm the President and Chief Executive Officer of the National Insurance Crime Bureau.
		NICB is the nation's premier non-for-profit organization committed to detecting, preventing, and deterring insurance crime and fraud through intelligence-driven operations.
		NICB has been fighting insurance-related crimes since 1912.
		We are supported by over 1,200 property and casualty insurance companies.
		For nearly 115 years, NICB has been at the intersection of insurance industry and law enforcement, serving as the hub for information sharing to protect consumers, including for reports of suspected insurance crime and fraud.
		In fact, NICB is codified by name into many states' insurance crime reporting laws.
		This gives NICB unique visibility into organized crime trends nationwide.
		Equipped with this expertise, NICB trains and assists law enforcement in the investigation of crimes affecting consumers as well as our members.
		At the federal level, NICB is especially proud of our long-standing relationships and partnership with the U.S. Department of Homeland Security and the Federal Bureau of Investigation.
		As an example, NICB special agents, working with our federal partners, leveraged our expertise on vehicle identification numbers, also known as VINS, to help identify the vehicles in the 1993 World Trade Center and Oklahoma City bombings.
		NICB also assisted state and local law enforcement to recover 6,000 vehicles in wake of the Maui and Los Angeles wildfires.
		These public and private partnerships continue today in our joint efforts to combat threats that transcend state and national borders, including organized CES.
		These sophisticated transnational criminal organizations, which effectively operate as billion-dollar corporations, profit from these crimes.
		Cargo theft exploits supply chain vulnerability.
		It's big business, big money, and big opportunity.
		The impacts are felt at kitchen tables across the country through higher costs.
		In 2024, cargo theft increased to historic highs, up 27 percent from 2023, with estimated losses exceeding $1 billion.
		This year, we expect it to rise another 22 percent.
		Other estimates suggest that cargo losses may reach up to $35 billion annually.
		In the past 18 months, NICB has assisted in more than 240 cargo theft investigations, leading to more to over 70 recoveries valued at nearly $40 million.
		Cargo thefts are not the result of small operations.
		These are well-funded, sophisticated criminal businesses, which include Mexican drug cartels, as well as operations out of West Africa, China, and Eastern Europe.
		Often secured stolen goods, everything from sports drinks to sports cars, are routinely exported into illicit markets to finance other criminal activities, including drugs, weapons, and even terrorism.
		As an example, NICB recently assisted law enforcement in uncovering a cargo theft ring that used business email compromises to successfully export stolen industrial commitment equipment to resale overseas.
		In 2024, we assisted in a multi-state investigation that resulted in more than 50 arrests and the recovery of vehicles, to include weapons, drugs, and more than $8 million of cargo stolen from a major railroad.
		And recently, NICB assisted U.S. Customs and Border Protection in intercepting stolen TVs that were bound for Panama.
		NICB's investigations confirm that transnational criminal organizations are exploiting supply chain vulnerabilities by poising as legitimate or fictitious carriers through identity theft and synthetic IDs.
		These complex tactics compel a coordinated response from the public and private sectors.
		In the public sector, deterrence and coordination are critical.
		Criminals currently benefit from illegal framework with inadequate deterrence and fragmented law enforcement coordination.
		The private sector must commit to stronger carrier vetting protocols and adopting other industry standards for preventing theft.
		Congress can help by passing the bipartisan Combating Organized Retail Crime Act.
		CORCO would increase deterrence by enhancing current criminal statutes.
		The bill also establishes a coordination center within the Department of Homeland Security.
		Currently, there is no central hub for intelligence sharing and operation coordination, thus making it difficult to confront the full scope of the threat.
		A coordination center would address this gap.
		Homeland Security Investigations is well suited for this role given its expertise in transnational criminal organizations.
		Public-private partnerships are essential.
		NICB stands at the intersection to support the center with any requested expertise, intelligence, operational support, and resources.
		NICB applauds the bipartisan work in the Senate to combat transnational criminal organizations and cargo theft, which harms all consumers.
		Thank you again for this opportunity to testify, and I look forward to answering your questions.
		Chairman Grassley, Ranking Member Durbin, and committee members, thank you for the opportunity to testify about the exponential rise of cargo theft.
		We need your help.
		My name is Donna Lam, and I am the Chief Strategy Officer for IMC Logistics.
		Our company is a nationwide intermodal and drainage provider.
		IMC and our ATA motor carriers are on the front line of this crisis.
		A few years ago, cargo theft was barely on my company's radar.
		In 2021, we had five cargo thefts reported.
		In 2024, we had 876 cargo thefts reported.
		That's a 17,520 percent increase.
		The landscape has shifted, moving from lone criminals to organized theft groups sabotaging our supply chain.
		So much of our cargo moves intermodally.
		Our partner railroads share with us drone footage of thieves cutting air brakes, containers strewn across the desert, and criminals emptying these containers in minutes.
		These containers arrive for motor carriers pickup in our large intermodal rail hubs, Chicago, Memphis, St. Louis, Kansas City, and Dallas.
		These contents and containers sometimes arriving empty or with contents half gone.
		Cargo theft impacts all of us, including our food and agricultural shippers, who are caught in this explosion of organized thefts.
		Full trailer loads of food and beverages that have been targeted have been stolen and gone.
		Agricultural exports by rail, sadly seeing loads pilfered, seals cut, our cargo spoiled, damaged, and lost.
		It becomes so challenging to pinpoint where the theft happens in these interstate commerce moves.
		Arrests and prosecutions are nearly impossible.
		Meanwhile, consumer prices and insurance rates soar.
		The level of violence surrounding these acts becomes more threatening.
		On a local level, cargo theft has also taken a very large toll.
	Just eight weeks ago, our Memphis terminal was stormed by seven vehicles.
	Our gates cut, breached.
	Criminals went straight to a specific area of our terminal.
	They were interrupted by our security team, but not before they had stolen $25,000 worth of merchandise in just three minutes.
	In our Riverside, California terminal, similar stories.
	Three mass criminals cut our gates in broad daylight and opened six containers before interrupted by our guard.
	We're talking about hundreds of thousands of dollars stolen in incidents across the United States with no resolution.
	How can we connect the dots at local, state, and federal levels on these cargo crimes?
	Here's an example of the value if we do.
	We had two containers of appliances stolen in St. Louis.
	It was reported for insurance purposes, but no arrests were made.
	Several months later, we got a call from the ATF.
	They had stumbled across our appliances in a warehouse that they raided.
	These refrigerators were being stuffed with cash to smuggle money across the southern border.
	This is not just an insurance matter.
	Cargo crimes, if connected, can help us link these operations orchestrated by transnational criminals.
	Brazen heists like these put our whole supply chain and our workers in harm's way.
	Our employees and our drivers are our most valuable asset.
	We invest millions of dollars in multi-layered security, including surveillance equipment, vehicle barriers, tracking technology, engine immobilizers, SOS buttons for our drivers, and for our guards.
	We also have very advanced cyber security protocol.
	But these criminal groups are highly organized.
	They have formidable cyber capabilities of their own.
	One fraudster stole a customer's identity to place an illegitimate delivery order with us, and we are sending unknowingly valuable goods right into the hands of these bad actors.
	Another group made counterfeit driver IDs and fake placards on the side of the truck to impersonate a real motor carrier.
	They stole five loads and chassis valued at more than a million dollars.
	Rising cargo theft and incidents like ours are happening to my counterparts across the trucking industry and across our supply chain.
	We cannot stay silent.
	Cargo theft will continue to metastasize unless Congress recognizes the severity of the problem.
	Law enforcement devoting sufficient time and resources, and the federal government taking a leading role in coordinating enforcement efforts.
	This is why the trucking industry is enormously grateful to Senator Grassley and Cortez Masto for their leadership in introducing the Combating Organized Retail Crime Act.
	This bill would put law enforcement's coordination on par with their sophisticated criminal adversaries and safeguard our national security.
	Cargo theft is robbing our supply chain to the tune of $35 billion per year.
	Who is harmed?
	All of us.
	I thank the committee for their focus on this issue, and I look forward to your questions.
	Thank you.
	Chairman Grassley, Ranking Member Durbin, and esteemed members of the committee, thank you for the opportunity to address this critical issue of organized retail crime.
	Chairman Grassley, thank you to you and Senator Cortez-Masto for reintroducing the CORCA Act of 2025 and inviting me to testify.
	My name is Scott McBride.
	I am the Chief Global Asset Protection Officer for American Eagle Outfitters, a national retail company that operates stores and online in all 50 states and represents 35,000 associates.
	I have also been an active member for almost 20 years of the National Retail Federation's Loss Prevention Council, having just completed a two-year term as chair and now currently Chair Emeritus.
	Imagine an organization that leverages master's level business concepts to unite individuals toward a common goal, harnessing technology to their advantage and defining clear roles and responsibilities.
	You might think I'm describing a successful retail company, but this group also uses intimidation and violence, electronic countermeasures to hide from and evade detection, and manipulates financial instruments like gift cards and executes nefarious reverse logistics tactics to sell or move stolen product offshore.
	ORC is far more than simple shoplifting.
	It represents a sophisticated criminal enterprise perpetrating massive thefts, escalating violence against our associates and customers, crossing jurisdictional lines to avoid prosecution, and deploying professional-style tactics to fuel their nefarious operation, including reverse logistics, illicit liquidation, financial crimes, and recruitment.
	They repeatedly victimize retail stores and disrupt our supply chains.
	This is how an organized retail crime group operates.
	While ORC is not new, its verdict, its veracity, sophistication, and frequency, and geographic reach have dramatically increased in the post-COVID era.
	These groups use encrypted message apps to recruit thieves, coordinate the consolidation of stolen goods, liquidate them through illicit, online, tertiary, and black market sites, and even exfiltrate stolen product out of the country.
	Simultaneously, retailers have invested in new technology to provide a clear insight into the scope of these thefts, pinpointing the last known location of the missing items, time stamping video of incidents, and enhancing collaboration with law enforcement in all jurisdictions.
	Despite our efforts, the problem continues to grow.
	Consider the recent case where Homeland Security Investigations, working alongside state and local law enforcement, successfully interdicted an exfiltration scheme.
	Stolen apparel is being collected for packing into sea land containers destined to cross the Texas-Mexico border.
	With the assistance of corporate investigators, HSI recovered almost 2,000 pairs of American Eagle genes, with the other retailer merchandise totaling almost $2 million.
	The retail genes were valued at $100,000 of that $2 million.
	RFID research revealed that those stolen AEO genes came from 35 stores in 13 states.
	Evidence of the seizure has already led to the discovery of a second arm of the same criminal group in Utah and has generated additional investigative leads in multiple states.
	Without the national reach of HSI, we would not have achieved such success in developing this ongoing case, a case far beyond the reach of any local understanding of law enforcement or agency, given the magnitude of the crimes and the multitude of jurisdictions.
	This example clearly underscores the urgent need for a national-level involvement to support local and state government, district attorneys, and state attorneys general.
	National visibility and link analysis are crucial to comprehending the entire scope of the criminal involvement, enabling the appropriate agencies and offices to make their legal determinations commensurate with the full scope of the criminal activity and lead to the disruption and dismantling of organized crime groups.
	In conclusion, the Combating Organized Retail Crime Act is an essential missing layer.
	It would establish the Organized Retail Crime Group and Cargo Theft Coordination Center, bringing together federal, state, and local law enforcement with private sector experts to share vital information and collaborate on strategies to keep our stores and supply chains safe.
	Thank you for providing me this opportunity to tell our story, and I look forward to answering your questions.
	Good morning, Chairman Grassley, Ranking Member Durbin, and respected members of the committee.
	My name is Summer Stefan.
	I'm San Diego County's district attorney.
	I spent 28 years as a prosecutor fighting crime and violence in my community, rose through the ranks to become the elected district attorney and currently the chairwoman of the National District Attorneys Association.
	I bring both the national and local experience to you to help bring a local prosecutor's view and law enforcement view to this issue.
	I want to focus on a topic that we often hear about, which is a characterization of this as being an economic crime.
	That is an absolute falsehood.
	Anybody who goes to a store and looks in the eyes of the employees and talks to them will see a very different picture in America than we've had in years past.
	I went to an ALTA store where there's 20-year-olds aspiring to become makeup artists.
	This is a store that is a chain that sells makeup, which is a target of organized retail theft.
	The way that those clerks, young clerks, looked was very different than the past.
	They're looking over their shoulder.
	They're waiting for something bad to happen.
	And why are they waiting for that?
	It's because a crew of organized criminals attacked the ALTA stores and stole $700,000 worth.
	How do I know this?
	We were angry in San Diego to see the fear in our community.
	I brought an organized team working with ORCA, the organized retail crime theft alliance, which has businesses and local and state officials.
	We were able to put together the case and solve it and be able to bring people to justice and send them to the consequences that they deserved.
	However, all of the products were already lost.
	They were either sold online or sold internationally.
	The same thing, I went to a small store, Sunny Perfumes.
	The owner and immigrant in the San Isidro area near the border.
	Again, this man had a different look, not one of excitement like our business owners that are heart of America should have.
	Rather, a look of trepidation.
	He showed me his broken camera.
	He showed me how he has his cheap perfumes in the front, knowing that someone's going to come in and take his product.
	So, what I want to focus on is not just that Capital One said this was a $45 billion industry.
	I want to focus on our fight in San Diego, where we've tried to preserve jobs.
	We know that the U.S. Chamber of Commerce has said that 650,000 jobs have been lost.
	These are jobs for people to work and provide for their family.
	This elevates it by itself to a national issue.
	But in addition to that, because of our efforts in San Diego, we've been able to identify and prosecute in two years 218 defendants engaged in organized theft.
	And the best we could do is get up to the fence level, which is the second level, at a level of $2.6 million.
	Even despite these successful efforts and task forces that came together, we were unable to get beyond to be able to track the product and the shot callers that are providing the shopping list for people to go in and steal hundreds of sunglasses worth $350,000, or makeup, or jeans, or Legos was our latest case.
	Or our recent $8 million jewelry heist, where two other states suffered from the same crew, but it was unsolved because there was no alert system in the national scope that alerted us that they're coming to us potentially.
	These were part of identified and were prosecuted as part of a South America transnational group that's been identified by the FBI.
	They've also been the people responsible for 100 residential burglaries.
	And in the cases we've done, these residential burglaries have linked to multi-state residential burglaries, again proving that this cannot be solved locally.
	It must be solved by local, state, and national.
	And this is why NDAA and San Diego DA's office supports the CORCA bill because we need to bring bigger solutions to a really big problem that's affecting daily lives in every neighborhood.
	Thank you.
chuck grassley ▲ ● ▼		Before I ask my questions, I got a couple things.
		One for 30 seconds.
		Last month, Matt Allen from the DEA told this committee that criminal investigations go hand in hand with immigration enforcement.
		Homeland Security Investigation Special Agent in Charge, Jason Stevens, agreed these crimes don't operate in isolation.
		Reconciliation made millions that is intended to and will allow agents to tackle violent crime, including organized crime.
		Then also I want to put in the record either statements or letters on this legislation from over 260 member companies of the National Retail Federation,
		the National Retail Industry Leaders Association, Ulta Beauty Incorporated, Home Depot, National Play Police Association, National Insurance Crime Bureau, Association of American Railroads, International Council of Shopping Centers, Intermodal Association of North America,
		and the American Trucking Association.
		Without objections, they will be entered in the record.
		So I'm going to start my questioning.
		By the way, I'll announce that on the Democratic side, the order is Durban, White House, Lobachar, Blumenthal, Arano.
		On my side, it's Grassley, Corner, and Blackburn, Britt, Moody.
		Ms. Stevens, you're a strong supporter of my bill.
		You just made an outstanding statement.
		The bill amends current law to enable prosecution of organized retail and supply chain crime groups using interstate and foreign commerce and establishes the Organized Retail and Supply Chain Crime Coordinator Center at HSI.
		How would this legislation improve the ability of both law enforcement and prosecutors like you to tackle organized retail crime?
unidentified		I believe that, Senator, that this would be a game changer because with the 218 organized crime cases that our office has done in San Diego, we have not been able to break through to what is going on nationally.
		We know these groups are operating nationally, internationally.
		In fact, the retailers tell us that their trackers are being sounding off in the middle of the seas, heading to different countries.
		But the investigations stop at the local level.
		This is a national problem that's draining the economic resources from Americans, hardworking Americans, but it's also draining the heart and soul and security of human beings.
		We have to be able to bring national solutions.
		We have multiple examples where national, state, local solutions work.
		When we're dealing with, for example, elder scams, we brought a national task force with the FBI.
		That's the only way we were able to identify nationals from China that had organized these scams and were able to actually bring both recall actions on the federal and my office brought state actions.
		Fentanyl, we've been able to drop that in San Diego by 37 percent.
		Absolutely would not happen without working with customs and border protection on a fast team where we got that done.
chuck grassley ▲ ● ▼		Thank you, Mr. Tawei.
		You've served at the top level, law enforcement and intelligence.
		We know from DHS reports that cartels, terrorists, and human traffickers either facilitate organized retail and supply chain crime or use its proceeds to finance other crimes.
		How are trans national criminal organizations using organized retail and supply chain crime to further their criminal activities?
unidentified		Chairman Grassley, thank you for the question.
		We are embedded with the Department of Homeland Security, HSI, and Customs and Border Protection in all the major ports and with the FBI.
		And we're embedded with all 50 fusion centers or 50 states and multiple fusion centers as well.
		And ICB is involved, is the information hub for the insurance carriers, the private sector, and these organizations.
		We've done it for 115 years.
		We have seen goods moving overseas.
		In Mexico, we repay over 2,000 vehicles that have ended up south of the border.
		We know that these stolen goods are going to West Africa and the Middle East.
		From my prior role as the Undersecretary and as an FBI agent here in Washington, we know that the supply chains are interdicted with Lebanese Hezbollah.
		We've seen that through Hamas.
		And we know the Mexican drug cartels are involved with the goods going south of the border.
		A coordination center, a center for excellent to coordinate intelligence from the private sector and my partners to my left and from the local law enforcement, as well as coordinating operations is critical.
		This committee is well aware of OSIDEF and SOD, the Counterterrorism Center, Counterproliferation Center.
		These centers provide the hub for information and operational sharing information and coordinating resources as well as tactical level response.
		We know the model.
		We know the successful model.
		And this bill would get us there, or partially there.
chuck grassley ▲ ● ▼		Ms. Stefan, Title 18 makes federal crime to transport stolen property with a value of 5,000 or more in interstate and foreign commerce.
		Supreme Court case law allows prosecutors to aggregate the value of stolen goods in common scheme to reach that threshold.
		Why is aggregation of theft amounts very important?
unidentified		Aggregation is critical because it distinguishes between somebody who is drug addicted who goes in to steal something, food is still wrong, but it separates them from the habitual organized criminals.
		It allows you to see the activity in totality and to be able to see the repeat offenses that form the structure of organized habitual criminals.
		In California, we recently, after a long 10-year fight, made a change in Proposition 36 that allowed us to aggregate, and it's already making a difference because we used to have criminals coming in with the calculators to go right under $950, thus leaving them at a citation misdemeanor level.
		That's what caused all our products to become locked up except the criminals that were committing the crimes.
chuck grassley ▲ ● ▼		Thank you, Senator Drew.
dick durbin ▲ ● ▼		Thanks, Chairman Grassley.
dick durbin ▲ ● ▼		Ms. Stefan, thanks for what you do.
unidentified		Thank you.
dick durbin ▲ ● ▼		And thanks for endorsing this bill.
		It sounds like a good one.
		But it is an expansion of the federal enforcement, is it not?
		It would not apply to your jurisdiction, correct?
unidentified		Well, it actually is, I think, an expansion.
		If the task force, I read it a few times, puts together this fusion center, like a law enforcement coordination center, then that information is supposed to feed to the locals and all the way up.
		So I view it as like the other task forces on fentanyl, where we work with DEA, like that it's going to bring that fusion together to assist locals as well.
dick durbin ▲ ● ▼		But the leadership under this legislation is federal, correct?
unidentified		Absolutely, yes.
dick durbin ▲ ● ▼		That's the point I want to make.
		And the reason I'm making that point is going back to what I said in my opening statement.
		The investigations of these crimes at the federal level depends on the Department of Homeland Security, does it not?
unidentified		That's what I read, yes, sir.
dick durbin ▲ ● ▼		That's what we understand as well.
		In February, the Department of Homeland Security in Washington ordered its entire investigations division, composed of 6,000 agents, to divert focus on drug dealers, terrorists, and human traffickers and shift priority to the Trump administration's mission of deporting people who are in the United States illegally.
		The new focus for the DHS Homeland Security Agency, current and formal officials say, is in keeping with the President's executive orders that demand a wholesale shift in federal law enforcement resources toward immigration crackdowns and removal.
		But they warn the shift will undermine high-profile investigations into some of the most dangerous transnational threats Americans face, including Mexican drug cartels smuggling deadly fentanyl across the border from Mexico.
		Chris Campanelli, former HSI supervisory agent, said a lot of my colleagues were afraid this was going to happen.
		This is going to be a total train wreck.
		So let's put the cards on the table.
		Yes, if anyone is involved in illegally being in the United States, undocumented or otherwise, and is engaged in criminal activity that is dangerous to themselves and others, they should be removed, period, prosecuted, period, or never let in in the first place, period.
		But what about those who are living here, who have been here for years, working a job, showing up every day, raising a family, which is mainly American citizens, and paying their taxes?
		Is that a priority over what we're discussing today?
		Not in my book.
		As far as I'm concerned, we should go after, with limited law enforcement resources at the federal level, the most dangerous and threatening situations imaginable.
		I've described a few of them.
		The subject of this hearing is another one, and retail theft.
		I don't doubt for a second that what has been described to us today is part of a much bigger network, even reaching into drug syndication.
		But to say we're worried about whether someone who is cutting grass on a golf course today is undocumented and we ought to put the resources of the federal government into putting them in a detention facility and deporting them, I don't think that's as high a priority as the subject of this hearing today.
		Ms. Stefan, let me ask you about criminal forfeiture.
		Can you describe, in the most general terms, this is not a quiz or a bar exam, why criminal forfeiture being added to this bill is important?
unidentified		Because all of crime, this works on greed and on money.
		So being effective means you have to forfeit.
		You have to take away the things that they stole.
		It's absolutely important because that's what they rely on with this process.
dick durbin ▲ ● ▼		I'm asking you to get down to a little lower level in your primary education course here on what criminal forfeiture is.
unidentified		Criminal forfeiture is where you take monies from bad doers, wrongdoers, because they've committed a crime and you're able to take cars to their homes, anything.
unidentified		Exactly, anything that is related to their criminal activity.
dick durbin ▲ ● ▼		And there's an expansion of that in this new bill, as I understand it.
		Is that where you see it as well?
		Criminal forfeiture.
unidentified		I saw criminal forfeiture.
		I didn't see that it expanded beyond what is normally allowed, which is a nexus between the crime and the activity.
		But I can go back and study it senators.
dick durbin ▲ ● ▼		I should do the same thing.
dick durbin ▲ ● ▼		I'm not being critical of the bill or of your analysis of it.
unidentified		Right.
dick durbin ▲ ● ▼		But I'm saying that the notion for dealing with some network and you find the kingpins, that their personal possessions could be on the table as well if they are found guilty.
dick durbin ▲ ● ▼		Is that correct?
unidentified		That's right.
dick durbin ▲ ● ▼		Right.
dick durbin ▲ ● ▼		I'm all for it.
unidentified		Yes.
dick durbin ▲ ● ▼		That sounds good.
dick durbin ▲ ● ▼		Thank you, Mr. Chairman.
chuck grassley ▲ ● ▼		Now, before I call on Corner, I think this speaks a little bit to what you were just talking about.
		Congress and state legislatures have authorized the use of asset disgorgement for more than 200 years.
		This legislation simply permits criminal asset disgorgement.
		For convictions of interstate shipment of stolen goods, transportation of stolen goods, and sale or receipt of stolen goods, the government uses disgorgement to take the profit out of crime.
		No one has a right to retain the proceeds of their ill-gotten gains.
		Doing so would be an invitation to commit similar crimes tomorrow and forever.
		Senator Corner.
dick durbin ▲ ● ▼		Mr. Chairman, let me just add at this point, I support that, and I think you do too.
chuck grassley ▲ ● ▼		Okay, you bet.
		Yeah.
		Senator Corner.
john cornyn ▲ ● ▼		Thank you all for being here.
		I was struck by the fact that in each of your testimony you highlight the transnational aspects of this problem.
		In other words, this is not just a local crime that DAs would prosecute in San Diego County necessarily.
		These are international networks and criminal organizations.
		And unfortunately, it reminds me of what we've become familiar with in places like Mexico, where the cartels do a lot of different things, but it's all designed to generate money for the cartels, whether they steal food, fuel, traffic in drugs, or in people.
		And now it seems like it's crossed our borders into the United States, because I note that in the Katie Mills Mall case that occurred in April of 2025 at Katie Mills Mall in Texas, two of the individuals that were apprehended had Mexican IDs.
		And then in the news, we hear about, for example, marijuana farms in California, where unaccompanied minors who were allowed into the country without any real restriction during the Biden administration were part of the Roundup there.
		ICE, Immigration and Customs Enforcement estimates that there are as many as 662,000 illegal immigrants currently in the country who have either criminal convictions or criminal charges pending against them.
		And it strikes me as this is quite a workforce for some of these criminal organizations.
		In other words, things don't stop at the border.
		And when people get into the United States who are unvetted and who have criminal convictions or make crime their life's work, they've got to be doing something.
		And I wonder, Mr. Glowie, do you think that part of the fact that we've had these open border policies in recent years that have allowed unvetted people, these aren't just people who want to come here to work and have a better life, these are people who are unvetted.
		We don't know who they are, but if it includes such a large contingent of people with criminal convictions or who are currently charged with crimes, aren't they part of the workforce that are used by these organized criminal organizations to do what we're talking about here today?
unidentified		Senator Corner, thank you for the question.
		And in my current role in past role, we know transnational criminal organizations know no boundaries.
		These are billion-dollar businesses.
		The Sina Cola Loa Cartel is one of the best known.
		It runs like a Fortune 500 company, moving people and moving goods.
		It's all about the money.
		These organizations have connectivity to nation states and terrorist organizations.
		We've seen that.
		This committee is well briefed on that and has oversight on some of those cases.
		Regarding the vetting of individuals and good, it is a critical component to protect the United States.
		As the Under Secretary for Intelligence and I was the head of intelligence at customs and border protection, I know that very well.
		And identifying those criminal actors, those criminal networks, those terrorists that are coming in and out of the United States, and the goods that are being supplied in and outside of the country, the vetting process is critical.
		And I think this law, CORCA, is a good step in creating a center to identify the illicit goods and the people involved with trafficking those goods globally.
		It's an excellent first step, and we well know this model and it works.
		It's a center of excellence model to target an illicit activity that's affecting the United States and affecting the consumers.
		Thank you.
john cornyn ▲ ● ▼		And Senator Durbin raises a concern that some of the law enforcement authorities that are currently being used to repatriate or deport people with criminal records out of the country that somehow they are being diverted from other law enforcement activities.
		But I'll note that recently we voted for a $170 billion addition to the funding for ICE for detention facilities and for personnel and training, and all of our Democratic colleagues voted against it.
		So I don't know you really can't have it both ways.
		But do you believe that, as I do, Mr. Glowy, that these go hand in hand in terms of addressing this problem?
		You can't get at this problem without dealing with the people who are on the ground committing these crimes on a daily basis, who are then connected with these international organizations.
		Can you?
unidentified		Intelligence sharing on individuals and organizations in the supply chain is critical to have a hub for information sharing to identify those nefarious actors and operationalize a response.
john cornyn ▲ ● ▼		Thank you.
chuck grassley ▲ ● ▼		Senator Harano.
chuck grassley ▲ ● ▼		You're next.
mazie hirono ▲ ● ▼		Thank you, Mr. Chairman.
		Thank you all for testifying.
		I think part of the concern regarding the organized retail crime situation is the lack of, I would say, adequate information and data.
		Would you agree that we should have a better system of determining how much of this is going on?
		I realize that you're here because it is a serious concern, but I do think that since a lot of this data is not reported to the National Incident Bank Base Reporting, for example, that that is an area that could be improved.
		Wouldn't you agree?
		Any of you?
unidentified		I'd just like to comment that I agree.
		And one of the things that's been so interesting as we prepare for this testimony, our own statistics.
		I agree with you that the stats that are being reported are maybe a fraction of really the actual theft that's going on.
		Motor carriers are the eyes and ears of our supply chain.
		We see everything.
		We're the first ones to see if that seal is broken, right?
		And we're the first ones because we are held as soon as we outgate responsible for that load.
		And so when we looked at our own statistics for the past four years, it's staggering.
		And that's why I made the comment about in 2021 we had five reports of cargo theft, five.
		And by 2024, we had 876 reports.
		It's huge.
mazie hirono ▲ ● ▼		I think that to the extent that it is increasing, it would be also helpful that we should have all of our large cities in particular reporting in on the incidence of these kinds of crimes to the National Incidence-Based Reporting System that we put together.
		Now, all of you testified that it's going to require the enforcement of whatever legislation that we enact will require collaborative enforcement involving federal, state, local, and the private sector all working together.
		And that is one of the things that you hope will be created under this law that we are contemplating.
		Is that a critical part of any kind of a law enforcement effort to get at this crime?
		And I would ask Ms. Stifan.
unidentified		Yes, exactly.
		I think being able to put together, we did that on a state level, and it enhanced our ability.
		And this is why we've been able to get to 218 organized criminal actors.
		But we know that it goes well beyond that.
		So being able to organize a similar thing on a national level, because I can cite you multiple cases, Senator, where this same group that we were able to hold accountable in San Diego went to Chicago, Illinois, did damage, went to the state of Washington, did damage, and we finally caught them.
		We're unable to prosecute them for those out-of-state crimes, but we were able to join our California crimes together.
		But we didn't have any kind of alert or information data sharing about what to look for, what is the profile, what's coming our way in this big jewelry heist that I mentioned.
		I hope I was, maybe there's another question.
mazie hirono ▲ ● ▼		And with regard to the data sharing and all that, that this is something that Homeland Security would supply.
mazie hirono ▲ ● ▼		Is that your expectation under this bill that would require Homeland Security to be the depository or repository of a lot of the enforcement activity under the contemplative bill?
unidentified		I expect a federal agency to do it because of my experience with federal agencies.
		For example, in the area of elder scams, we were simply guessing until the FBI took on the leadership of our elder justice task force.
		We were able to then connect the dots and find out that my seniors were losing $98 million a year.
mazie hirono ▲ ● ▼		Excuse me, I am running out of time.
		So, to the extent that there's going to be a much bigger federal involvement in enforcement, there is a concern about what is happening at Homeland Security as well as the Department of Justice, and that the diversion of resources and bodies to other than prosecuting and going after these kinds of crimes.
		And literally, dozens of experienced people who are normally focused on these kinds of crimes are no longer there.
		So, we can pass whatever laws we want, but unless there is that commitment to enforcement at the federal level, we're going to continue to run into resource problems.
		Thank you, Mr. Chairman.
chuck grassley ▲ ● ▼		Thank you.
chuck grassley ▲ ● ▼		Senator Blackmark.
marsha blackburn ▲ ● ▼		Thank you, Mr. Chairman.
		Ms. Lim, welcome.
		We know that you and IMC do a great job in Memphis, and we appreciate that you are here today before the committee.
		How long have you worked in logistics?
unidentified		Actually, 38 years.
marsha blackburn ▲ ● ▼		38 years.
		So, you have seen this as Tennessee has grown to be a logistics hub, an intermodal hub there in Memphis, where you have all of the Class 1 railroads.
		You have the very active port of Memphis, which is moving a lot of cargo and containers up and down the Mississippi River.
		We have FedEx that is there, and then, of course, because of that, we have all the trucking organizations that are well located in Memphis.
		I noted in your testimony you talked about the increase from 21 to 24 was a 5,000 percent increase.
		So, this is an astounding number.
		Now, we all know that weak DAs and weak judges that will not abide by sentencing guidelines and lock these people up and prosecute them is one of the reasons that we have seen this cargo theft explode.
		So, I want you to talk for a minute about what you think has caused this explosion.
unidentified		Well, I absolutely agree that part of it is that there's no arrest and there's no prosecution.
		We do have a problem with that, but we also have a problem with an understanding of what the magnitude of cargo theft actually means.
		So often, and the Memphis Police Department does a great job, I will tell you, they do respond to a tremendous job.
		But in so many ways, cargo theft, we speak almost a different language.
		Our terminology, many things are very different.
		And so often, when the local police do come, they may write this whole theft up as vandalism.
		Vandalism.
		They're not able immediately to even qualify and quantify what was taken, what's the value of what's taken.
		They see the damage when the fences are cut, and it's vandalism as we know it.
		And so, I think what we like so much about the Corca bill is this outline in this standardization of what is cargo theft, what is it, how do we aggregate it?
		I was talking about motor carriers being the eyes and ears of our industry because we are, and we don't have a voice.
		We don't know where to report.
		We need a centralized place to report.
		I explained the incident in St. Louis where we, you know, basically had the ATF calling us, right, to tell us that we had, oh, we've got your refrigerators.
		And so, it's this ability to connect the dots, local, state, and federal, that we don't have today.
		And you asked the question, you know, about what is it, what could we do better in the state of Tennessee?
		What could we do better in Memphis?
		I think we're doing all that we can.
marsha blackburn ▲ ● ▼		Right, let's talk for a minute, pardon me, about that, because you're right, it takes passing legislation, reframing the conversation, if you will, and then putting the parameters around that.
		But one of the things that we've looked at is utilization of technology because of what you're talking about with cutting the fences and then local law enforcement having to say, is it something that is vandalism, or how do we know what the extent of the theft is?
		So changing the approach and gathering that evidence, utilizing technology, speak to that importance.
unidentified		Well, I 100 percent agree that there are ways perhaps we can use technology to help us better record those instances.
		And I think that could be very, very helpful part of this whole discussion, too, of reporting.
		Resources needed to do it.
		Technology can help us do it faster, more efficiently, more effectively.
		So I really appreciate you even bringing that up.
		I think we've got a very strong technology team in Memphis.
		Would love to invite you to our headquarters and to have this, maybe a further discussion about how we could bring in this whole idea of technology to help us in this area of cargo theft where we badly need standardization, communication, and more speed in our ability to collaborate.
marsha blackburn ▲ ● ▼		Thank you.
marsha blackburn ▲ ● ▼		Thank you, Mr. Chairman.
chuck grassley ▲ ● ▼		Yes, Senator Klobuchar.
amy klobuchar ▲ ● ▼		Let Senator Padilla go before me.
		Fine.
		He was waiting.
unidentified		Go ahead.
		Thank you for the courtesy.
		Thank you, Mr. Chair.
alex padilla ▲ ● ▼		Colleagues, it's clear that across the country, policymakers are grappling with how best to respond to this dynamic of increasing reports of organized retail crime.
		It's on the news constantly, and as a result, it's not just federal officials that are thinking about it and what can we do about it, state officials, local officials, but through our collective experience, you know, that effective policymaking also depends on accurate data.
		And right now, much of what we hear based on, quote, shrink estimates often conflates theft with inventory loss, employee error, and internal fraud.
		And I just can't help but observe that without standardized, disaggregated data, there's a risk that we may find ourselves legislating based on more assumptions than actual evidence.
unidentified		So my first question is for Mr. Glaugh.
alex padilla ▲ ● ▼		The National Insurance Crime Bureau often cites retail shrink data to describe the scale of organized retail crime.
alex padilla ▲ ● ▼		How do you distinguish between organized retail crime as opposed to employee theft, inventory mismanagement, or other forms of loss?
unidentified		Yes.
		Senator, thank you for the question.
		We have been the hub for information sharing for the insurance industry and law enforcement for 115 years.
		So the claims associated with crimes involved, we have access to that.
		Since 2023, we have seen almost a 50 percent increase in cargo thefts, so the cans, and the goods that are inside the cans.
		In the last 18 months, we have seen 240 theft investigations and 70 recoveries totaling $40 million that our organization has been involved.
		So we're actually embedded in the investigations and with the analysts at state and local levels.
		Regarding the shoplifting and the shrinkage inside organizations, that data is not something that the NICV actually tracks specifically.
		It's the larger volume, the criminal organizations and the cargoes associated with it.
alex padilla ▲ ● ▼		So that in and of itself, I think, is an important distinction because the nightly news may not always frame it accurately.
unidentified		Would you agree or disagree with that?
		I would say the cargo theft, we can speak specifically because we have the data associated with that.
		The data regarding organized retail theft, the crimes which we know are associated with some criminal organizations where the supply chain goes overseas, but the actual data associated with that, I think this legislation would be a good first step in providing some granularity because local law enforcement is really one when you're talking about those theft reporting and where they get their data from.
		It doesn't resolve necessarily to the federal system or into the claims data that we would access according to crimes.
		Right.
		Let me jump to a different topic.
		Time goes by quickly in this committee.
alex padilla ▲ ● ▼		Organized retail theft crosses the state lines and implicates complex networks, which you began to touch on, Mr. Glaugh, from theft to transport to resale.
alex padilla ▲ ● ▼		But addressing the issue effectively requires the right federal partners as well.
unidentified		It's a public-private partnership if we're going to crack down on this with the right tools and oversight.
alex padilla ▲ ● ▼		Now, the Department of Justice and the FBI in particular have a long history of handling multi-jurisdictional property crimes with prosecutorial discretion and judicial accountability.
alex padilla ▲ ● ▼		But Corica, you referenced the proposal, will shift that rule to the Department of Homeland Security, raising questions about mission creep or surveillance.
unidentified		So Mr. Glaw, given your background in both national security and fraud prevention, do you think DHS is the best agency to address an economic property challenge?
		Senator, again, thank you for the question.
		And I did spend a large part of my career in DHS and the FBI, so I have an idea of both organizations.
		Department of Homeland Security at the ports, you know, Customs and Border Protection, we're embedded with them on identifying illicit activity and goods going overseas, specifically vehicles.
		We're in multiple major ports.
		We've covered a lot of high-value stolen vehicles at the ports and those goods transiting the ports.
		CBP is an important interlocking on people and goods traveling across the borders and identifying illicit activity.
		HSI has a long history of working transnational criminal organizations well.
		We worked with them when they were former customs special agents as well before 9-11 when DHS was formed.
		DHS is a logical point of being the center here, but I think in partnership is critical with the FBI, our local law and state partners, as well as national security, which we didn't touch on, is we need to identify these networks that are associated with national security threats, being terrorism and nation states.
		So a center where this can be done is very important, and this bill is a good step.
alex padilla ▲ ● ▼		So I agree when it comes to the cargo dynamic and ports of entry when it comes to retail shops and theft being conducted at that level.
unidentified		I think that's a different question, needing a different set of tools, experience, and expertise from the federal partners.
alex padilla ▲ ● ▼		Last question, I know my time is up, but if the Department of Homeland Security were to gain access to both business and consumer data, again, at the retail level, not through the supply chain, how do we prevent that information, that consumer and business data, from being used for unrelated purposes?
unidentified		Senator, I think the prioritization, as Ranking Member Durman said before, on violent criminals, transnational criminal organizations that are a threat to the United States, that transit the borders is critical.
		This center, the vetting of people and goods that travel for threats to the United States that are associated with violent criminal organizations, Mexican drug cartels, as well as terrorist organizations is critical, and the center would be a good first step to do that.
		Thank you.
		Thank you.
katie britt ▲ ● ▼		Thank you, Chairman Grossley, for convening today's hearing.
		And thank you to all the witnesses for taking time to be here.
		I'm proud to be a co-sponsor of the Chairman's bill.
		And I agree that both deterrence and a coordinated response are essential to addressing the issue.
		We know organized retail crime and supply chain crime have been a growing problem in recent years.
		So, as my time before I came to the U.S. Senate, I was President and CEO of the Business Council of Alabama.
		This is something we dealt with with our members across the state.
		And we learned that it's a multifaceted problem and it poses law enforcement, economic, and national security challenges.
		While these activities involve theft, in which and of itself, is a crime that must be addressed.
		One of my concerns is to the extent in which organized crime in the retail and supply chain area are carried out in furtherance of additional illicit crimes.
		And so, to the extent in which that often involves a sophisticated criminal network, my first questions are for Mr. Gowie and Ms. Stefan.
		Based on your experience, what are some of the downstream illicit activities that are tied to or furthered by the retail and supply chain theft?
unidentified		Thank you, Senator, for that question.
		What we do know is when, for example, our ORCA, our organized theft task force, does these investigations, hundreds of search warrants, it's not uncommon to find the retail theft goods along with guns and drugs.
		So we see that interconnection right there.
		We don't have the federal tools currently to be able to then tie those to specific activity and to what cartels, what organized crime is involved in this particular shipment that we have right there.
		And that's where the bill that you're supporting really can come into play and help us.
		We also know just from our experience at the intersection of crime, we know that cartels in Mexico work with our Mexican mafia, which is our MA, and they then issue orders to our local gangs, which then control the human trafficking activity.
		It's very hard to separate.
		These criminal organizations are there based on greed and profit.
		And wherever they can do that, that's what they're doing.
		They are not always specialists, just specialists in retail theft.
		In a recent case that we did that had the South American theft groups that were linked to hundreds of residential burglaries, especially targeting our Asian communities, where they would watch as they're in their business and they would attack their homes while they were away.
		They would survey.
		In those cases, you know, they had pictures on social media, that same group with guns and with inviting escort services, which is really human trafficking and other things.
		So the intersections abound, and I think that having those connecting the dots at a federal level will allow us to see the whole framework and be able to then attack that monster in a better, more precise, strategic way.
katie britt ▲ ● ▼		Thank you so much, Ms. Stefan.
katie britt ▲ ● ▼		And Mr. Glai, before you answer, not only the downstream illicit effect, but also how does this fit into the larger picture of these transnational criminal organizations and kind of speak directly to that as well.
unidentified		Yeah, thank you for the question.
		And actually working on the transnational organized crime strategy under two administrations, I can speak specifically how important it is to have centers so the intelligence and the operation coordinating can be put together.
		The national security threats in transnational criminal organizations cannot be stated more emphatically, that we need these centers to be able to run this information against classified databases to understand if these are being sponsored by nation states, being North Korea, Iran, China, Russia, or these are by terrorist organizations.
		We know all too well this committee had oversight on the Lebanese Hezbollah, bulk cast smuggling involving vehicles in the 2010-2015 era.
		There's historical cases that show the model works, but you have to have a center.
		Oversight is appropriate where you can run classified and unclassified data together that brings state, local law enforcement, federal, and the private sector together to identify those criminal networks that are associated with the highest threats to the homeland.
katie britt ▲ ● ▼		And let me ask you in my few remaining seconds.
		You obviously mentioned the center.
		Can you speak to any gaps in information share that may need to be addressed and how we actually, through the coordination and creation of this center, can work to actually fill those gaps?
unidentified		So every center from the Organized Drug Enforcement Task Force to the Counterterrorism Center that we know well the models work, it will take time for the policies and the strategies to get in place, and of course the correct oversight and the legal parameters that go with it.
unidentified		But the public-private sector partnership is critical, but also bringing together disparate law enforcement organizations from the Federal Bureau of Investigations, Homeland Security Investigations to CBP and our national security partners to identify the threats that are the biggest to the United States is critical and the center is a good first step.
katie britt ▲ ● ▼		Excellent.
		Well, thank you all for being here.
		I have some more questions, but I will submit those for the record.
chuck grassley ▲ ● ▼		Senator Klobuchar.
amy klobuchar ▲ ● ▼		Hello.
		Thank you so much for being here.
		I was talking to Senator Whitehouse there about my previous job when I was a prosecutor and we actually set up a whole group of prosecutors to work on this retail theft.
		It seems like our problems were simple back then compared to now.
		But I guess I'll start with you, Ms. Stuffin.
		Could you tell me how this federal legislation would ensure that criminals who engage in what is actually different than it was back then, I'll say, that's now organized retail theft face accountability.
unidentified		Thank you, Senator Klobuchar.
		The cases that we've done, which have been 218 cases over two years with $2.6 million loss, show us that there is a footprint and it's outside our state, it's across the nation and an international footprint.
		A recent $8 million jewelry heist, the Rolex says, were gone overseas with the fence being in Chile.
		So it will enhance our ability to be ahead of it to prevent the same type of jewelry heist that happened in the state of Washington, but we received no information, our local task force, to tell us there's this trend, be on alert to it, because it's extremely sophisticated.
amy klobuchar ▲ ● ▼		That's why that retail crime coordination center would be so important if you'd get that information.
amy klobuchar ▲ ● ▼		Mr. Glock, could you tell me how transnational criminal organizations use cargo theft to actually fund other illicit operations?
unidentified		We have seen an exponential increase in cargo thrust over the last three years.
		In 2023, we saw almost a 27 percent increase.
		We're seeing another 22 percent increase.
		That's a 50.
		Well, we estimate into 2025 we'll be 50 percent.
		We know this supply chain is going overseas.
		We know it's going over our border.
		These stolen goods essentially have 100 percent markup.
		You steal it and your profits are 100 percent.
		So the question is, how do we identify those nefarious actors, those networks that are the biggest threat to the homeland, as Senator Britch just talked about?
		Is that the need for those classified databases to be run against these criminal networks?
		You know well, Senator.
		And this bill would provide us the strategic and tactical intelligence to address these biggest threats to the homeland, which we have no doubt that these supply chains are being used to facilitate for.
amy klobuchar ▲ ● ▼		Thank you.
		And Mr. McBride, I think this is an important point.
		How do the threats of violence by these organized retail crime cartels not only threaten the safety of store employees but also make it hard to keep the stores open?
unidentified		Thank you for the question, Senator.
		Yes, the threat of violence and the actual violence that some of my peers have experienced has grown exponentially over the last decade.
		My fellow witness here testified to the attitudes of some of the store and shop owners that are concerned for their safety when they are operating their shops.
		The intimidation tactics to come back and to be able to re-victimize the retail locations over and over again is grown so much that we have had to implement additional countermeasures.
		We have had to implement training to keep our employees safe.
		We have had to lock up and hide.
		All of that leads to a reevaluation of the investment that's being made in new stores, different locations, and those types of things, and has, in some cases, with the entire retail sector led to product deserts in some parts of this country because stores have had to close up and leave because they could no longer sustain a viable operation because of the violence, the crime, the theft, and the losses that they are incurring.
amy klobuchar ▲ ● ▼		Okay, very good.
amy klobuchar ▲ ● ▼		Ms. Lam, last but not least, so first of all, thank you for the support for the Ocean Shipping Reform Act, the bill that Senator Thun and I did.
unidentified		Yes.
amy klobuchar ▲ ● ▼		Thank you, sir.
		And as many of you know, that was about the pricing during the pandemic that was hurting our farmers and our retail, making it really difficult.
		And after we passed that bill on a bipartisan basis, then President Biden signed it into law.
		It actually, the rates went down for a number of reasons, but I think the threat of that and the Maritime Commission eventually doing rules made a difference.
		And it wouldn't have happened without companies like yours.
unidentified		She goes next.
amy klobuchar ▲ ● ▼		Just one question on this topic.
amy klobuchar ▲ ● ▼		Do you agree that cargo theft poses a risk to the security of our food supply chain?
unidentified		I absolutely do.
amy klobuchar ▲ ● ▼		Explain that quickly.
unidentified		Yes, Senator, and thank you for the question.
		First of all, food and beverage is the number one targeted commodity in cargo theft, number one.
		And why?
		Demand, of course.
		It's so difficult to track.
		It's so easy to distribute.
		And what is so devastating about that is, you know, the price of food we know already is so high.
		The average American cringes every time they go to the grocery store.
		And what happens with these targeted thefts on food is once you have something that is precious, any kind of food, you pick it.
		We see two, three, three, four percent stolen.
		Those costs are immediately passed on to the consumer.
		We also, and you've been very helpful with us as we discuss ag exports.
		And what's happened is actually targeting agricultural exports, beef, poultry, perishables.
		And what we also see that's happening because of so much of this transnational cargo organization crime that's happening on our railroads, pilfrage.
		Yes, it may be secondary.
		We believe these thieves are after high-value cargo, but in the meantime, destruction to our ag exports as they cut the seals and the integrity of load is lost.
amy klobuchar ▲ ● ▼		Thank you.
amy klobuchar ▲ ● ▼		Appreciate it.
unidentified		Thanks.
ashley moody ▲ ● ▼		Thank you, Mr. Chairman.
		Thank you for introducing the federal legislation combating organized retail crime act.
		I am incredibly proud to be a co-sponsor of that, and it is timely, certainly, and needed now more than ever.
		I'm one of the newest senators here, as you can tell.
		I sit down here at the edge of the dais.
		And one of the things that has shocked me and frustrated me, and that's putting it mildly, is when we're dealing with issues like organized retail crime, whether that's cargo or smash and grab or organized retail theft, really this should be a bipartisan effort in how we approach it.
		But I'm always incredibly surprised to hear questioning that, is it really that bad?
		Like, shouldn't we attribute that to something else?
		Or why is FBI and DHS helping?
		So what I'm finding is that I think in whether it's a governor or a mayor in so many places, and just to be clear, that's the executive branch whose responsibility is to enforce the law.
		There is almost an ignorance or willful blindness, or maybe it's self-promotion over the success and stability of their state or city.
		I don't know what it is.
		But it is increasingly hard for somebody like me that served as a judge and a federal prosecutor and is the wife of a law enforcement officer to watch these statements.
		For example, and one governor, Newsom, out of California, went to a cargo theft site and was like, I don't know what's happening.
		This looks like a third world country.
		In fact, I don't think it's a coincidence that in the last three years, the incident rate of cargo theft has gone up 17,000 percent.
		And we've also seen unvetted people come into this country by the millions and invited into California.
		And nobody's picking up on that.
		How many times have we heard the word transnational criminal organization, transnational criminal organization?
		In fact, we just rolled out more arrests since Trump's been in office of people here that have been deported time and time again with criminal backgrounds and are stealing from cargo freight.
		In Florida, we just arrested a ring of people here from Venezuela with ties to Trende Aragua who were found to have been responsible for dozens of retail thefts in Florida.
		Now, what I'm happy about is we now seem to have proposed legislations that are going to do what we did in Florida.
		So when I was Attorney General, we launched a database that started tracking these cross-jurisdictions.
		So where one might look like a single theft incident, we were able to then show, oh no, this was nine jurisdictions, $20 million in loss, 20 different retailers, and we charged it that way and prosecuted that way and locked them up for the true crime.
		We also did legislation that condensed, or excuse me, expanded the time period on which you could tie in these multiple hits and incidents into the organized crime.
		And that is what this proposed federal legislation is going to do.
		But what we have to stop doing is saying the problem's not bad when the numbers are staggering.
		It's costing Americans when we're trying to figure out how we're going to afford to put food on the table with skyrocketing prices.
		We don't need built into those prices theft that can be avoided if we just have executives understand that it is their job, governors and mayors, to work with law enforcement to enforce the law.
		When you have DAs abdicating their responsibility and saying, I'm not going to lock anybody up for theft, that just flows gasoline on the fire.
		And what did we do different in Florida?
		Actually, removed the DAs that wouldn't enforce the laws they didn't like.
		So, in New York, it shouldn't have been surprising when they were catching people stealing, and they said, Well, we steal here, but we go in Florida to spend our money because in Florida, if we get caught, they'll lock us up.
		We need a national approach that says we're taking this seriously.
		This is costing Americans money.
		It's costing us the ability to share information across not just county lines within a state, but across state lines and then across nation states.
		This is so important.
		I cannot stress how important it is.
		Otherwise, Mr. McBride, you referenced this, and I want to say to you, you said, Look, it's costing us so much money, we have to, can we even stay open?
		Miracle Mile was about a third empty.
		Miracle Mile in Chicago, and you had a mayor blaming the businesses that they didn't have more security.
		If that is not short-sightedness in the role of an executive in an executive branch, I don't know what is, and that is a primary driver of this.
		Mr. McBride, can you say, from your experience, how much do you think costs go up as a percentage as a result of this organized retail crime?
unidentified		So, I cannot speak exactly to a number.
		I can tell you that the losses are absorbed by corporations for as much as they possibly can stand, but it does end up coming to act to the consumer in a lot of different ways, whether there's cost of goods because we'd have to provide additional inventory to cover the gaps that now are missing from the store, cost of security, cost of training, the cost of rehiring associates when they no longer feel safe enough to want to work in those locations.
		So, it is a very exponential amount of increased effort and costs on the part of every single retailer because every single retailer in this country in every single state have been victimized in some way by these crime groups.
ashley moody ▲ ● ▼		Thank you, Mr. Chairman.
chuck grassley ▲ ● ▼		Senator Whitehouse.
		Senator Tillis, are you going to ask questions?
		Okay.
		I've got to go vote, so you guys will have to work this out here.
sheldon whitehouse ▲ ● ▼		We'll manage.
sheldon whitehouse ▲ ● ▼		Ms. Stefan, I think you are the prosecutor here on the panel, is that correct?
unidentified		I believe so.
unidentified		And I'm one that doesn't mind prosecuting.
sheldon whitehouse ▲ ● ▼		Yeah.
unidentified		So there have been some comments.
sheldon whitehouse ▲ ● ▼		That's usually a good attribute in a prosecutor.
		I wanted to, first of all, let my colleagues know that I'm very happy to work on legislation to focus on the organized nature of these theft rings.
		I'm a little skeptical of making ordinary shoplifting a federal offense, but I think we can figure out our way through that as we start to actually design legislation.
		So I just wanted to open with that point.
		One of the very powerful laws for dealing with criminal organizations, specifically criminal enterprises, as you will have figured out from my use of the word enterprise, is the RICO statute.
		And both transporting and receiving, selling or receiving stolen goods are RICO predicates.
		Could you walk us through where there have been RICO successes at dealing with these systemic theft rings that then obviously have to transport, sell, or have somebody receive the stolen goods, and where you've run across or your colleagues in law enforcement have run across legal impediments to using the RICO statute against this predicate offense?
unidentified		So, in California, our state statutes don't have an actual RICO component.
		We don't have the laws as strong as the federal side.
		This is why, in our, for example, fentanyl task forces and in our elder justice task force, the cases that are solved in the task force are provided where the federal prosecutor takes those cases that involve a RICO element because it's such a powerful tool and the state laws.
sheldon whitehouse ▲ ● ▼		California does not have a state RICO statute.
unidentified		On the state side, no, we don't.
		We are fighting.
		We fight for different.
		We have conspiracy laws, but they're not the same as RICO statutes.
sheldon whitehouse ▲ ● ▼		You would have to go to the U.S. Attorney and work with them in order to get a prosecution together.
		How about your colleagues around the country who have state RICO laws?
		Have they been able to bring cases involving transportation sale or receipt of stolen goods under those state statutes?
unidentified		They've done, I mean, through NDA, I know there's been a lot of successes in bringing organized retail theft cases.
		San Diego, we've brought 218 cases, even under RICO.
		Not under RICO, but under an organized retail theft statute, which is a little easier to get to.
		But those tools that allow you to go to the higher-ups, whether it's organized retail theft or RICO, are absolutely imperative.
sheldon whitehouse ▲ ● ▼		Well, I'm going to close out here and turn the gavel over to Senator Coons, who is the last senator.
sheldon whitehouse ▲ ● ▼		It can get us in all sorts of trouble alone in the room.
chris coons ▲ ● ▼		I move the confirmation.
sheldon whitehouse ▲ ● ▼		Yes, exactly.
		I would love, if you have a chance, if there is any particularly helpful document out there from the NDAA, for instance, about the use of state RICO statutes in this area, or if you have any personal experience from your colleagues that would help inform our deliberations, or if there have been any good uses of your colleagues bringing cases to federal U.S. attorneys and getting RICO prosecutions that resulted, I'd love to get that from you.
		So I'll make that as a question for the record, if I may.
		And I thank all the witnesses for being here, and I yield back my time.
chris coons ▲ ● ▼		Thank you, Senator Whitehouse, and thank you to the witnesses.
		And I'd like to thank Chair Grassley and Ranking Member Durbin and their staff for pulling together this hearing.
		Look, this is an important topic all over the country.
		Certainly in my home state, Delaware has a retail crime prevention task force to examine and better understand this issue.
		And it's a focus for Delaware's Law Enforcement Fusion Center.
		Interstate organized networks present challenges for any one state, and so I'm very open to seeing how we can coordinate federal resources and federal legislation to help address this and to coordinate intelligence sharing and prosecution.
		How we disrupt organized networks, I think, is also important, that we avoid wasting precious federal resources on just minor shoplifters as opposed to those who are actually part of an organized effort.
		I've long been concerned about the criminalization of poverty.
		That's why I've led the bipartisan Driving for Opportunity Act with the support of Senators Grassley, Tillis, White House Blumenthal, and Booker.
		And I think we need to avoid unintentionally exacerbating the problem while addressing the critical issue of organized retail theft.
		Ms. Stefan, thank you for the NDAA's long support of My Driving for Opportunity Act.
		I appreciated how your testimony recognized the importance of distinguishing between petty theft from sophisticated ringleaders.
		Could you say just a little bit more about that?
		What sort of indicators are there in investigation that you're dealing with just casual petty theft versus those who are committing casual petty theft in order to feed into an organized criminal ring?
unidentified		Thank you so much, Senator.
		And part of having the data and having organized task forces helps us make those distinctions in a more factual manner, not stereotyping.
		So being able to look at a track record at the data points, how many times has this person been captured doing the same thing and stealing the exact same item, which they can't possibly need 200 sunglasses.
		There's got to be another use that isn't one that makes it a necessity or something that should be dealt with at a lower level, not an organized crime level.
		So relying on data, and I think that is part of why I support this federal, is not only to make more prosecutions, that's really important, but to distinguish the correct organized level and hold those who are really pulling the strings.
		And sometimes they're using vulnerabilities such as homeless people trying to feed an addiction, a young kid who's, you know, wants to have a phone, different things.
		We've seen those solicitations of young people, vulnerable people.
		So having the correct data at the national level, the state level, the local level allows prosecutors to make good decisions that comport with justice.
chris coons ▲ ● ▼		Thank you.
		I also have to vote.
		One last question, if I might.
		Mr. Glaue, on behalf of the National Insurance Crime Bureau, any thoughts about how we would get better data?
		I mean, you gather data in a very broad way, neutral way.
		How do we make sure that we've got that data and that we're sharing it effectively and broadly?
unidentified		Senator, thank you for the question.
		So we bring together over 1,200 property and casualty insurance carriers and the claims associated with crime and suspicious activity.
		We've done this for 115 years.
		We started with AutoBest.
		We were actually the hub for all auto thefts back in 1912.
		So this is what we do, and I would say we do it really, really well.
		But that engagement in partnership with state, local, law enforcement, and the private sector, and my partners to my left in Summer is critical to this.
		And we've seen the centers, and I've said this throughout my testimony, the Organized Crime Drug Enforcement Center, the Counterterrorism Center, the Counterproliferation Center, a center to bring us all together and unite us, public and private sector, but as well as running the information against national security threats.
		So we're prioritizing resources against the biggest threats to the homeland of Mexican drug cartels, terrorist organizations, nation states, Iran, North Korea.
		We know they're involved in organized crime.
		Some of the biggest cases I had were in the FBI was against those organizations.
		So a holistic approach in this bill, CORCA, would have that first good first step for us to start building that center so we can prioritize resources and all have strategic and tactical intelligence to address this threat.
chris coons ▲ ● ▼		Thank you.
		That makes great sense to me.
		I appreciate all of your testimony.
		This will conclude our hearing.
		And any written questions can be submitted for the record for one week from today.
		I'll ask the witnesses to answer and return those questions to the committee within two weeks.
		Thank you again.
		And this hearing is hereby adjourned.
unidentified		Thank you.
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