Cargo Thieves Shift Into High Gear

Cargo Thieves Shift Into High Gear
George J. Ramos

When robbers swept into a port-area cargo depot earlier this month and quickly drove off with several shipping containers crammed with goods, it may have seemed like an odd crime.

Not so, said investigators. Even though overall crime is down locally, there has been a major exception: cargo theft.

About $25 billion worth of goods in transit was stolen nationwide last year. And nearly half of those thefts – 47 percent – occurred in Los Angeles County and the Inland Empire, where goods that pass through the L.A.-Long Beach port complex typically are warehoused.

The numbers, compiled by a trade association that monitors the problem, show a 16 percent increase in cargo hijacking over 2008, despite the fact that total property crimes declined nationally by 5 percent over that period.

What’s more, experts believe the pace of cargo thefts – defined as the theft of goods that have not made their way to their final destination – is continuing to increase, though figures for this year are not yet available.

“We are definitely seeing an upswing, and Southern California is the nation’s No. 1 hot spot,” said Dan Mayfield, chairman of the Western States Cargo Theft Association, an L.A.-based trade group that compiled the numbers and comprises about 300 representatives of law enforcement, manufacturers and the logistics industry.

The phenomenon was starkly illustrated by the incident earlier this month when several armed assailants overpowered two employees at a Wilmington cargo depot, brought in a small fleet of big rigs and quickly made off with several trailers loaded with shipping containers. The load and its value were undisclosed.

Law enforcement officials don’t know exactly what to make of the increase, especially since other crime is down. But they note that the terrorist attacks of Sept. 11 resulted in beefed-up security within the ports of Long Beach and Los Angeles, but less attention has been paid to surrounding trucking routes and storage yards, where thefts typically occur.

The cargo – often taken from yards or warehouses along with the containers in which they were shipped – is a valuable target. The ports handle billions of dollars in imported electronic equipment, clothing, pharmaceuticals, foods and other items that can be sold on the Internet or to mom-and-pop chains. That often adds up to a real score considering that the value of each heist can be well in the millions of dollars.

It doesn’t help that upheaval in the transportation and distribution industries has resulted in thousands of idle logistics workers with expertise to carry out the thefts.

“When they’re out of a job, desperate people will do desperate and unscrupulous things,” said Sgt. Mike Arriaga, supervisor of the Los Angeles County Sheriff Department’s Cargo Criminal Apprehension Team. “If you’re an out-of-work truck driver with a mortgage and a family to feed, you’ll do what you need to survive.”

Inside jobs

The thefts also can be conducted by or with the aid of insiders. Consider what happened to Roland Corp., a leading Japanese maker of electronic musical instruments, including keyboards percussion kits and digital recording equipment.

An alert member of the sales team at its L.A.-based U.S. subsidiary noticed one of the company’s high-end electronic keyboards, which wholesale for $2,500, available at a sharp discount on eBay. The ad noted it was “never opened and new in the box” and the seller even included a picture showing the item’s serial number. When the serial number was checked, Roland discovered that the keyboard should have been delivered to a brick-and-mortar retailer.

The company contacted Diversified Risk Management Inc. popup=”640,480″, one of several Southern California private investigation firms that handle cargo thefts. Posing as buyers, investigators purchased the illegal contraband from what turned out to be a driver employed by a trucking company that transported Roland’s freight from a warehouse to a local rail yard to be shipped east. A search of the driver’s home revealed thousands of dollars worth of pilfered goods.

“He had a residence near our terminal and was dropping some of the stuff off before continuing on,” said James King, Roland’s distribution manager. “He had found loopholes in how they monitored freight and our customers didn’t even know that they weren’t receiving the goods.”

The illegal transaction with investigators was captured on tape and the man was fired, convicted of grand theft and sentenced to three years in state prison.

“It can hurt us in lost revenues but sometimes it hurts our customers more. A lot of them are independent mom-and-pop retailers who don’t have the financial resources to absorb a $5,000 to $10,000 loss,” King said.

Other examples of inside jobs include the robbery of studio recording equipment from a Culver City electronics firm. The firm had been experiencing several million dollars in losses, and also hired Diversified Risk to look into the matter.

The firm assigned one of its operatives to drive a big rig carrying a load of goods. While transporting the goods, the operative was waved to the side of the road in Santa Monica by workers in Caltrans uniforms. When he stopped, he was accosted by the men, who turned out to be armed robbers who made off with the goods, said George J. Ramos, managing partner at Diversified Risk.

Investigators later determined that a female employee in the company’s accounting department who knew the delivery schedules had orchestrated the heist with her boyfriend and a crew of robbers. Eventually, they recovered $750,000 worth of stolen recording equipment and the woman and three men were sent to prison.

Swamped with cases

About 30 percent of the cases handled by Diversified Risk involve cargo theft. That amounts to about 50 to 60 cases annually, and about triple the number of three years ago.

“Cargo theft is an area in which we’re getting more and more calls and conducting more and more investigations,” said Ramos, who estimates each of the more lucrative thefts is for goods worth between $1 million and $20 million.

“We use a combination of methods including witness interviews, electronic surveillance, computer forensics and undercover operations,” he said.

Indeed, in an era when law enforcement agencies nationwide face personnel and budget cuts, investigators said it’s difficult to keep up with the onslaught of cargo thefts. Instead, they are forced to prioritize – focusing on the biggest cases with enough evidence to possibly solve.

Law enforcement also is relying more on the investigative work done by private agencies such as DRM and a handful of competitors that have made a name for themselves in the field.

Meanwhile, companies are being advised to take security into their hands when possible, by installing surveillance cameras, equipping tractor trailers with security locks, employing competent security guards and increasing background checks on employees. But even those measures can fail.

“The groups involved have increased their sophistication,” said Sgt. Troy Rivers, coordinator of the California Highway Patrol’s Cargo Theft Interdiction Program, which specializes in cargo theft.

“It’s an economically driven criminal enterprise. When the economy is not doing well you see these numbers rise,” Rivers said.

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