steps in law enforcement in this area in recent years in two thousand and six created organized retail crime task force later later the f b i collaborated with the national retail federation and the retail industry leaders association to launch a law enforcement retail partnership network called  many of the aspects of organized retail crime now while state and local law enforcement agencies are on the front line of combating local and federal law enforcement is uniquely positioned to take down a large breaking up the crime ring then we see the beginning of a dialogue with them between these agencies and the businesses affected with the goal of enhancing federal enforcement in this area we'll hear from law enforcement of federal law enforcement agencies today about their experiences with organized retail price and what they're doing to investigate it and i look forward to that testimony when they recognize the ranking member of the subcommittee th community task force to combat organized retail crime and create a national database clearinghouse to track in the den of our going as retail crimes across the country the result of this legislation is the law enforcement retail concerns about the bill operation the desire to craft legislation that addresses innovative criminal conduct but i am wary of legislation that deviates from using the knowing or intentional mental states  commonly used in criminal offenses that's important because criminal offenses are intended to impose penalties against those who consciously act commit a crime or consciously act in furtherance of a crime another alternative to the and getting their perspectives on the federal agencies and forcing the law today we need to learn more and do all we can investigate writers of organized retail crime and those who assist them and we need everyone retailers on thank you mr chairman and thank you in the ranking member for having this hearing today on especially important and i hope as a natural outgrowth of this hearing we will as a subcommittee and a full committee be able to enact  that will address some of the problems that we're going to hear about today organized retail crime affects millions of americans each year unfortunately federal law enforcement agencies lack adequate resources to combat this growing crime organized retail crime involves the theft of large quantities of merchandise from retail stores by an organized criminal organization unlike shoplifters or the merchandise with the intention of selling it back into the marketplace i estimates of organized retail crime rings cost more than thirty billion dollars a year in lost two thousand and seven organized retail crime survey by the national retail federation found that seventy nine percent of the retailers polled were victims of organized retail crime for these reasons the f b i established an organized retail crime initiative to identify and dismantle large multi jurisdictional organized retail crime rates this initiative included the formation of a national retail federation f b i intelligence network a network is intended to establish an effective means of sharing organized retail crime information and to discuss trends as they relate to specific sectors and regions of the retail market and to identify and target the more sophisticated criminal enterprises congress should increase funding to the f b i is organized retail crime initiative that's why last month i sent a letter to the chairman of the ranking member of the appropriations subcommittee on commerce science related agencies requesting that congress authorized additional funds to help the f b i fight organized retail crime yet the i is not the only federal agency pursuing organized crime the u s secret service a million dollars the activities were tracked in seven days before they were arrested and prosecuted thanks to the good work of these federal agencies here today examples like this one are encouraging but there is still too little prosecution of or knife retail crime states or any threshold would require that the value of the stolen goods must amount to five hundred dollars or one thousand dollars in some states for the offense to be up on a are too high to prosecute organized retail crime effectively the federal threshold for prosecution for the crime of transportation is doing good interstate commerce is even higher as a value the stolen goods must exceed five thousand dollars to trigger federal criminal liability to help federal agencies combat th phenomenon of organized retail crime more effectively earlier this week i introduced h r forty eleven the organized retail crime prevention and fortune act of two thousand and nine this bill reduces the federal felony threshold from five thousand dollars to one thousand dollars for the sale of stolen goods through online marketplaces the bill also provides that quote the attorney general shall establish a multi jurisdictional task forces to initiate investigations of organized retail theft and dismantle organized retail theft criminal enterprises in the united states district court districts with the greatest incidence of organized retail theft but you chairman i think this bill is a good start and i look forward to hearing from our witnesses what more we can do to combat the serious problem of organized retail crime in america and you don't need to answer this question now but i would hope that a piece of legislation perhaps the one i introduced could be the subject of a bipartisan effort to try to  place we usually ask other members to put their statements in the record but my colleague from virginia has been hard working on this issue and i understand you have a statement to make thank you very much  for your kind words and for allowing me to give this statement i want to thank you especially for the hard work that you've put into this issue over a few years now and i hope we do make progress and look  working with you and mr gohmert and mr smith on that organized retail crime or is a huge and growing problem in the united states retailers estimate their losses from o r c to be in the tens of billions of  dollars groups target anything from everyday household commodities to health products to baby formula that can be easily sold through flea market swap storefront operations and through online marketplaces  travel from a retail store to retail store stealing relatively small amounts of goods from each store but cumulatively stealing significant amounts of goods once stolen these products are sold back to fencing operations which can dilute alter and repackage the goods and then resell them sometimes back to the same stores from which the products were originally stolen when a product does not travel through the authorized channels of distribution there is an increased potential that the product has been altered diluted reproduced and or repackaged the so called diverted products pose significant health risks to the public especially the diverted medications and food products diverted products also cause considerable financial losses for legitimate manufacturers and retailers alternately the consumers bear the brunt of these losses retail establishments are forced to raise prices to cover the additional costs of security and prevention measures even more troubling is where the money is going our witnesses today will explain that oftentimes this money is being sent overseas and is being used to fund international organized crime and even terrorist organizations at the state level organized retail theft crimes are normally prosecuted under state shoplifting statutes as mere misdemeanors as a result the thieves that participate in organized retail theft rings typically receive the same punishment as common shoplifters the thieves who are convicted usually very limited jail time or placed on probation i believe that the punishment does not fit the crime in these situations mere slaps on the wrist of these criminals has practically no deterrent effect in addition to low level criminals actually stealing these goods from the shelves are easily replaced by the criminal organizations higher level coordinators during my seven years working on ways to combat o r c i found that the federal law enforcement community believed it had adequate federal laws to prosecute crimes but that communication and coordination among outside groups and state and local law enforcement was lacking in order to improve the communications and intelligence sharing between industry and law enforcement i offered an amendment to the department of justice reauthorization bill back in two thousand and five that created a federal definition of organized retail theft crime and directed the f b i to contribute to the construction of a national database housed in the private sector where retail establishments as well as federal state and local law enforcement could compile evidence on specific organized retail theft crimes to aid investigations and prosecutions it was my hope that this database which has now become the current loop net would help to put the pieces together to show the organized and multi state nature of these crimes as well as vied important evidence for prosecution i am pleased to see in the written testimony today that law enforcement believes this initiative is proving helpful in addition in december of two thousand and three the f b i established an organized retail theft initiative to combat this growing problem while this is a good start i look forward to hearing the f b i s plan to bolster its efforts to combat these crimes which are increasing  frequency posing greater threats to consumers and resulting in greater losses to businesses recent busts have shown how widespread this problem truly is we need more arrests like this to effectively combat organized retail theft i'm also pleased to hear about our pilot program and i hope that this program will lead to more information about how these primaries operate and how we can more effectively shut them down i continue to look for new ways to help law enforcement combat  in fact i join with ranking member smith this week to introduce h r four zero one one which would lower certain monetary thresholds in the criminal law and give law enforcement more resources to combat these crimes i urge the members of this subcommittee to consider this approach when contemplating legislation in this area and mr chairman i look forward to continuing to work with you to find additional approaches to solve this problem one concern i've had is that we need to make sure that legitimate online businesses like craigslist and a whole host of other online businesses are accommodated in the sense that we need to find ways where they can cooperate with law enforcement without having  legislative requirements that are too intrusive in terms of their business model relative to others who are part of the overall network that is a problem for organized retail  crime entities want to be helpful want to cooperate with law enforcement and i think we can find ways to their cooperation without making them subject to un reasonable requests for information that would make it difficult for staff in the united states organized retail theft is responsible for significant economic losses to retailers which are then passed on to the american consumer well it is difficult to pinpoint the exact  dollar loss caused by this crime problem retailers estimate all crimes where they are victims result in billions of dollars in losses tax revenue losses attributable to organized retail so negatively legitimate products which may have been mishandled by the criminal enterprises for resale to consumers also a concern for the f b i in particular the potential nexus between organized retail syndicates and other criminal there are many challenges on the road to combating organized lack of available resources to state and local police departments who have the primary responsibility for investigating most retail crimes is a huge hurdle sharing information between public and private enterprise is another as with other forms of criminal enterprises there is a loose hierarchy within organized retail that groups specifically these groups utilize low level boosters those who actually steal the merchandise and higher level dancers who frequently coordinate that often are illegal immigrants working off a debt or individuals suffering from some form of addiction if these low level boosters are removed from the criminal enterprise others will simply step in to take their place criminal groups are also particularly nimble able to easily change their appearance alter their method of operation and particularly adept at circumventing security devices and procedures further the wide reach of the internet and online auction site has provided global marketplaces for savvy entrepreneurs and not surprisingly criminal enterprise sophisticated organized retail groups can best be dismantled through a coordinated and cooperative effort between law enforcement and the retail industry in december two thousand and three the f b i established an organized retail initiative to two thousand and six that require the attorney general and the f b i in consultation with the retail community to build a system for information sharing to include intelligence as well as lessons learned and best practices regarding organized  as a result the law enforcement retail partnership network was subsequently launched in two thousand and seven the database which is housed and run by the private sector allows retail members track and identify organized retail s ecure web portal today nearly one hundred thousand retail locations are included in the data which represents one point one seven trillion in retail sales or nearly twenty five percent of all retail sales in one year enforcement and private industry provides for greater intelligence gathering and dissemination enabling increased arrests prosecutions and recoveries of stolen merchandise in addition to learn that in coordination with the retail industry the f b i is identifying and targeting groups utilizing existing task force resources staffed by f b i agents and other federal state and local law enforcement officers the task additional f b i or law enforcement resources may be able to assess the use of the task force approach to combating crime coupled with successful partnerships with an industry is seen by the f b i as one of the most effective and efficient tools by which to identify and dismantle any criminal enterprise that strategy is working for example in two thousand and twenty three organized crime associates of the gambino crime family including inspector general internal revenue service the new jersey state police and the union county prosecutor's office in august of that same year the f b i and its law enforcement partners at the internal revenue service u s immigration and customs enforcement and the broward county sheriff's department participated in a raid on pharmacare health services in florida resulting indictments charged transportation of stolen goods money laundering conspiracy and fraud according to court documents pharmacare was actually a wholesaler that often purchased and damaged stolen products its employees were subsequently convicted of selling millions of dollars worth of over the counter medications that had be extensive customs and immigration authorities special agents to identify dismantle and disrupt financial criminal enterprises threatening our national economy and security additionally i says well aware of the impact of our city on the retail industry ice recognizes it or see groups engage in activities a crossover into one or more vices ongoing initiatives or violate laws in which i said jurisdiction has been involved in a number of successful r c investigations but i would like to briefly discuss two in two thousand and five san francisco  counter products from large retailers the stolen products with and resold through rosemont wholesale a company involved in selling products such as medicines razor blades baby formula over the internet and small local grocery stores to fencing operations purchased all merchandise some behalf of rosemont and generated a list of profits by selling it's a premium well as one then laundered the product through their online auction site shipping them throughout the u s and canada they structured numerous banking transactions to avoid currency awaiting sentencing in two thousand and one ice initiated muhammad ali investigation as receiving information that a criminal organization he had was involved in the interstate transportation of stolen merchandise and laundering opposed sales internationally information uncovered during the razors and pregnancy test kit merchandise is repackage and sold to wholesalers and retailers numerous convenience stores own owners operated by the organizations in the fort worth texas area were used as fancy locations they obtained product by committing various blogs as well to arm utilizing number of us to give techniques include wiretap loss prevention community also participated throughout the course of the investigation as a result thirty five members of the organization were charges state and federal violations including conspiracy possession receipt or interstate transportation of sawn property and money laundering ali was convicted and sentenced to serve fourteen year federal prison sentence ice luncheon or c pilot program in july of two thousand and nine in houston los angeles miami new york the pilot focuses on the development of a threat assessment to determine how these groups are engaged in crimes of which i says you're a tracking system and a database which places ice agents in contact with members of the retail community and compliments information contained in the national retail federation an enhanced effort to fully explore how these groups are exploiting systemic vulnerabilities in the banking system the r c pilot program com has already related criminal activities under the jurisdiction of eyes including those committed over the internet and previous successful ice investigations have yielded indicators of suspicious banking of the answer is yes we have requested additional resources typically or at least to my knowledge they have not been successful if you could provide us with that information we hopefully we can be helpful when we talk to retailers the most common complaint they have about the difficulty in dealing with organized crime is that the federal law enforcement organizations just don't give them the time of day when it comes to dealing with it they view it as just another shoplifting case or maybe a shoplifting case a little greater magnitude but  they don't get enough effort in terms of digging beyond the person that may be apprehended in the store or at a swap meet or flea market or whatever the case might be  and these are these are national organizing rings that really do require federal government two to step in what do you say in response to that what i will say is that  us information about how many were opened and how many were closed so we get a gauge for exactly how many investigations you're initiating per year that would that would be helpful to us maybe go back over the last three or four years case in my opening statement i referred to the law enforcement retail partnership network and i'm wondering what you can tell us about how that has improved your ability to investigate  of not being aware of these things or are the big box stores and other retailers who are suffering serious problems from organized crime not bringing enough information to you or is or is it a that's interesting because i would assume that if you bought something on the internet that it be shipped to you using the mail in many instances would it not and therefore that would entail your t based on those postings and this is just my understanding having talked to a couple of them and they have investigators or somebody internally taking a look at what the postings are  and mortar retailers have a problem with getting information about what their particular web sites have information about a product that they suspect is being found on the internet but they don't have any real proof of it unless they can gather information well that draws a response from the online business is that they don't want other competitors being able to ask them literally thousands of questions regarding their customers that  are doing business on their on their websites and so on without the involvement of law enforcement so we've been trying to find some common ground here to work out this situation move it forward and my question to you mr johnson is would you be willing to participate in a program to allow expedited requests for information from online marketplaces when probable cause is found the goods being sold online are stole the answer to that question is yes and if we gave you the resources to have some people dedicated to that information gathering that information that might help the bricks and mortar folks and allow the online folks to have greater cooperation greater results without having t