2,000 Greater & Lesser Mysteries

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June 1991 ROP-ing IN FENCES By James Rainum Officer Repeat Offender Project Metropolitan Police Department Washington, D.C., Nancy Brown Investigator Repeat Offender Projcet Metropolitan Police Department Washington, D.C. and Raymond Smith, Jr. Special Agent FBI's Washington Metropolitan Field Office To Dickens Oliver, he was Fagan, the "...villainous-looking and repulsive..." trainer of young pickpockets. (1) In Sinclair's "The Jungle," he was Rosensteg, "...the pawnbroker, who would buy anything...for one third of its value and guarantee to keep it hidden for a year." (2) All of us are familiar with the sleazy characters in the alley wearing trenchcoats lined with jewelry and a dozen watches on their arms. The fence is not only a part of our fiction and our folklore but also our everyday lives as well. There are considerable difficulties inherent in building and prosecuting cases involving fences. For the most part, departments don't have programs specifically directed at fencing operations. However, this article explains how fencing markets and operations run, how to build cases against these offenders, and how to prosecute offenders successfully. By using the Washington, D.C., Metropolitan Police Department's and the FBI's ROPTIDE Program as an example, this article explains the steps that law enforcement agencies can take to curtail, or end, fencing operations in their respective jurisdictions. BUYING AND SELLING STOLEN GOODS Because very few items are stolen by a professional thief for personal use, it is the fence who determines who will receive stolen goods. The thief may steal to support a gambling or drug habit, pay off substantial debts, or for many other reasons. In each case, unless the thief can directly use the stolen product, it must be converted to cash. There must be a market for the stolen product, and this need is satisfied by the activities of the fence. THE MARKETPLACE The market for stolen products is everywhere and so are the customers. The underground economy of stolen property is so substantial that "Forbes Magazine" recently published an article on the fencing business. It describes fencing as a business where "...inventory turnover is slow, but markups run 900%. Your suppliers will expect cash, but their prices are dirt cheap. There are legal risks, but they are minimal." (3) One of the most common ways to convert property to cash is for the thief to act as the fence, selling the merchandise to customers on the street. As with any business, success depends on customers knowing where the goods will be sold. Shoplifters and petty thieves hawking their merchandise from plastic bags are a common sight, as are car trunks loaded with electronic equipment, clothing, tools, and other items. These thieves often receive 50% or more of the retail value of the merchandise. FENCING BUSINESSES A true "fence" is usually considered to be an established businessperson--one who knowingly purchases stolen property and redistributes it in any fashion for profit. In fact, most fences operate legitimate businesses in conjunction with their illegitimate fencing activities. In many cases, the business may have started out as a legitimate operation, but evolved into a fencing activity for the most obvious reason--increased profits. Almost any type of business can become involved in fencing activities. Retail stores can resell items shoplifted from stores that carry the same items. Construction businesses can use lumber and equipment stolen from other job sites. Appliance stores and contractors can purchase new appliances stolen from homes under construction. Junk and scrap yards, pawnbrokers, and secondhand and antique stores are the most common sources for fencing enterprises. Though police departments attempt to regulate these activities, they are often difficult to control or investigate. LAW ENFORCEMENT AND FENCING OPERATIONS For law enforcement agencies, building a fencing case can be problematic. All jurisdictions have laws dealing with the receipt of stolen property. For the most part, each contains elements which show that the police department must prove that the property was stolen. However, this is often difficult to prove without an admission that the receiver knew the property was stolen. Retail stores seldom maintain updated and accurate inventory records. Citizens, for the most part, do not record the serial numbers of their property, and lumber, tools, and other construction supplies seldom have identifying marks. Even if undercover police officers posing as burglars sell merchandise to a fence, which they represent as stolen, the violation only constitutes the misdemeanor of attempting to receive stolen property because the item sold was not actually stolen. Additionally, because they are business people, most fences are very personable and many are even established in the community. As a result, few in law enforcement and the community are willing to expend the effort and money necessary to charge this type of criminal with a misdemeanor. STING OPERATIONS Most departments attack thieves through storefront sting operations. Copying known fencing operations, officers set up a business and begin buying stolen property themselves. As a result, thieves can be identified, stolen property is recovered, and multiple arrests can be made. However, disadvantages of using this technique include extremely large outlays of money, personnel, and time, which most departments either are unwilling or unable to make. THE STOLEN PROPERTY STATUTE Using an innovative approach to the fencing problem, the District of Columbia approved the Trafficking in Stolen Property statute included in the Theft and White Collar Crimes Act of 1982. (4) This law took the Receiving Stolen Property statute one step further and directly addressed those who purchased stolen property with the intent to redistribute for profit. The law simply states that anyone who sells or disposes of stolen property in any form for profit on two or more occasions, or anyone who receives stolen property on two or more occasions with intent to redistribute for profit, is guilty of a felony, punishable by a $10,000 fine or 10 years' imprisonment or both. What makes this law unique is that the property does not have to be stolen. As long as the person possessing or receiving the property has reason to believe that property is stolen, it is as good as stolen in the eyes of the court. "ROP" PROGRAM Washington, D.C., clearly needed a specific police program to enforce these new laws that had the potential to clamp down on fences. The same year that the trafficking statute came into being, the Metropolitan Police Department formed its Repeat Offender Project. Better known as ROP (pronounced rope), the project began as a proactive policing experiment. Basing its concept on the idea that a minority of criminals committed the majority of crimes, ROP targeted individuals who were believed to be committing five or more Part I offenses (5) per week. Officers handpicked for the experiment were told they could use any legal, moral, and ethical means necessary to put the target suspects behind bars. The project's success was outstanding, and ROP was made a permanent unit within the police department. Shortly thereafter, administrators decided that ROP could also be used to deal with the fencing problem that faced the city. ROP and the new trafficking law were practically made for each other. Though the new law made cases against fences easier than ever, the work necessary to build a good case demanded more than the street officer or average detective was able to give. Surveillance and undercover work were necessary, along with a supply of desirable bait property that the undercover officer could sell to the fence. Because of the operational creativity afforded to ROP, these problems were overcome, and during the winter of 1983, the law was first used to build cases against prominent fences in the metropolitan area. TWO CASE STUDIES Intelligence determined that the owner of a grocery store located in the southeast section of Washington, D.C., was buying stolen food stamps and other merchandise. ROP began a joint investigation with the U.S. Department of Agriculture and sent an undercover officer into the store on three occasions to sell the owner bait property consisting of food stamps and electronic items. The food stamps, supplied by the Department of Agriculture, and electronic items donated by an area retail store were clearly represented as stolen by the undercover officer. After the owner exchanged cash for stolen property, search warrants were obtained and served on the store and at the store owner's home address in Maryland. Stolen property was recovered from both locations, and the store owner was convicted in D.C. Superior Court of Trafficking in Stolen Property. With this experience under its belt, ROP tackled several other fencing operations. However, two problems quickly became evident. First, because of the nature of fencing (along with the size of the District of Columbia), the investigations usually extended outside the jurisdiction of ROP. Second, the supply of bait property was usually donated by local retail stores, and some of the merchandise, such as jewelry, simply could not cover the need. In searching for a solution to these problems, ROP turned to the Washington Metropolitan Field Office of the FBI. The cooperative efforts of these two law enforcement agencies proved to be effective as cases were made and criminals were prosecuted successfully. The working relationship developed fully between the two agencies when they solved an important case in February 1987. ROP had uncovered a fencing operation working out of a Washington, D.C., restaurant. The restaurant was run by two brothers who were prominent figures in the local community. They were buying large amounts of stolen property, specifically items dealing with horses, and transporting them to one of the brother's horse farm in Virginia. There the items were being sold from a tack shop on the farm. Using both FBI and ROP informants, an undercover officer began selling "stolen" property to the brothers after being introduced to them by another thief. When ROP's supply of bait property quickly ran out, the FBI supplied over $10,000 worth of items to be sold. Once the case was developed, ROP and the FBI were co-affiants on the search warrants, which were executed in both Virginia and D.C. Items valued at approximately $2 million were seized, representing property stolen in burglaries in Virginia, Maryland, and D.C. ROPTIDE Based on this and other successes, the Washington Field Office of the FBI and ROP formed a property crimes task force known as ROPTIDE in May 1987. ROPTIDE began with one FBI Special Agent and the ROP Squad, which consisted of one sergeant and six officers. It has since grown to six Agents, two sergeants, and nine officers. In addition, detectives from other surrounding departments assist with investigations that involve their jurisdictions and continually provide intelligence to help the task force select new targets. ROPTIDE has three target thief categories that are consistently investigated. The first is that of new home construction site burglars and their fences. During 1988, construction companies in the Washington, D.C., area lost in excess of $6 million of materials and equipment. The second is that of home and office burglars and their fences. The third is that of professional and repetitive auto thieves and their outlets (chop shops, etc.). When a target is identified, it is handled as a separate case. One FBI Agent and one ROP officer are designated as the case investigators. Together, they decide how to address the investigation and develop an investigative plan to include the use of different strategies, such as bait property, an undercover operation, consensual monitoring, closed-circuit television coverage, and informants. The Agent then makes a request for funds from FBI Headquarters, and upon receipt of the case funds, the undercover investigation begins. In the interim, the investigators conduct additional background work, including surveillance, use of informants, analysis of telephone records, and other investigative techniques. This work is performed by ROPTIDE as a whole, not just by the lead investigators. Funding for the operation is provided by the FBI. These cooperative efforts proved to be successful in curtailing fencing activities. As of April, 1991, ROPTIDE has led to 276 arrests, 201 indictments, 224 convictions, and the recovery of approximately $8 million in stolen property. CONCLUSION By drawing on the talents and resources of the two agencies, ROPTIDE has allowed the investigators to overcome obstacles that would have seriously crippled past fencing investigations. And, cases have been tackled that would have overwhelmed any department or agency working on its own. ROPTIDE has recently been praised as being a very cost effective operation having a real impact on the crime problem in the Washington, D.C., metropolitan area. Fencing operations contribute greatly to the level of crime and economic fraud wherever they occur. Cooperative law enforcement efforts and a directed program against fences can prove to be successful deterrents to this crime. FOOTNOTES (1) Charles Dickens, Oliver Twist (New York: The New American Library, Inc., 1980). (2) Upton Sinclair, The Jungle (New York: The New American Library, Inc., 1960). (3) Steve Weiner and John Harris, "Hot Retailing," Forbes Magazine, August 7, 1989, vol. 144, No. 3. (4) Washington, D.C. Law 4-164, secs. 22-3831 and 3832. (5) A Part I offense, as described by the FBI, includes rape, robbery, homicide, burglary, arson, assault, and theft.