I 

111TH CONGRESS 

1ST SESSION H. R. 1173 

To amend title 18, United States Code, to combat, deter, and punish individuals and enterprises engaged nationally and internationally in organized 

crime involving theft and interstate fencing of stolen retail merchandise, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 25, 2009 

Mr. ELLSWORTH (for himself and Mr. JORDAN of Ohio) introduced the 

following bill; which was referred to the Committee on the Judiciary 

A BILL 

To amend title 18, United States Code, to combat, deter, 

and punish individuals and enterprises engaged nationally and internationally in organized crime involving theft 

and interstate fencing of stolen retail merchandise, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Organized Retail 

5 Crime Act of 2009’’. 

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1 SEC. 2. FINDINGS AND STATEMENT OF PURPOSE. 

2 (a) FINDINGS.—Congress makes the following find3 ings: 

4 (1) Organized retail crime involving the obtain5 ing by fraud and theft of retail merchandise from 

6 entities engaged in interstate commerce is a nation7 wide problem of an increasing scale and is expected 

8 to cost American companies and consumers more 

9 than $30,000,000,000 annually. 

10 (2) The increasing losses by retailers as a result 

11 of organized retail crime make certain goods and 

12 products less available and accessible to American 

13 consumers. 

14 (3) The uncontrolled redistribution and unsafe 

15 storage of stolen and fraudulently obtained con16 sumer products such as baby formula, over-the17 counter drugs, and other products by persons en18 gaged in such organized retail crime is a health and 

19 safety hazard to American consumers. 

20 (4) The unregulated black-market sales of such 

21 fraudulently obtained and stolen merchandise results 

22 in an estimated $1,600,000,000 annual loss in much 

23 needed sales and income tax revenues to State and 

24 local governments. 

25 (5) The illegal income from the expanding theft 

26 and resale of stolen retail goods is reasonably bemstockstill on PROD1PC66 with BILLS

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1 lieved to benefit persons and organizations engaged 

2 in other forms of criminal activity such as drug traf3 ficking, gang activity, and terrorism. 

4 (6) Organized retail crime rings often obtain re5 tail merchandise through the use of checks for which 

6 there are insufficient funds or that are forged or sto7 len, frequently returning the merchandise to fraudu8 lently obtain refunds. Such practices create major 

9 problems for the retail industry and the national 

10 banking system. 

11 (7) Organized retail crime rings are increas12 ingly using counterfeit, forged, misappropriated, and 

13 improperly transferred Universal Product Code la14 bels and other devices employed to identify articles 

15 for sale as a method for achieving their ends. 

16 (8) The dramatic growth of organized retail 

17 crime and the unfettered resale of such stolen and 

18 fraudulently obtained goods in national and inter19 national Internet-based marketplaces has resulted in 

20 effective evasion by such resellers of State and local 

21 regulations on secondhand goods and article resellers 

22 which had traditionally been used to control the pos23 session, resale, and transfer of stolen goods. 

24 (9) The unrestricted expansion of anonymous 

25 Internet-based marketplaces for stolen and fraudumstockstill on PROD1PC66 with BILLS

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1 lently obtained goods has resulted in a dramatic in2 crease in the deployment of organized retail crime 

3 rings seeking to sell stolen goods in Internet-based 

4 marketplaces. 

5 (10) Conduct constituting organized retail 

6 crime and conduct facilitating organized retail crime 

7 both substantially affect interstate commerce. 

8 (b) STATEMENT OF PURPOSE.—In light of the above 

9 findings, the purposes of this Act are as follows: 

10 (1) To protect consumers, retailers, the national 

11 banking system, and State and local governments 

12 from the more than $30,000,000,000 annual prob13 lem of organized retail crime as well as the related 

14 adverse health and safety risks it creates. 

15 (2) To continue to allow legitimate transactions 

16 to occur on online marketplaces while addressing the 

17 growing problem of fencing stolen merchandise over 

18 the Internet (‘‘e-fencing’’) that facilitates organized 

19 retail crime. 

20 SEC. 3. ORGANIZED RETAIL CRIME. 

21 (a) DEFINITIONS.—Section 2311 of title 18, United 

22 States Code, is amended— 

23 (1) by inserting after the fifth paragraph (relat24 ing to the definition of ‘‘motor vehicle’’) the fol25 lowing: 

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1 ‘‘ ‘Organized retail crime’ means— 

2 ‘‘(1) the stealing, embezzlement, or obtain3 ing by fraud, false pretenses, or other illegal 

4 means, of retail merchandise in quantities that 

5 would not normally be purchased for personal 

6 use or consumption for the purpose of reselling 

7 or otherwise reentering such retail merchandise 

8 in commerce; or 

9 ‘‘(2) the recruitment of persons to under10 take, or the coordination, organization, or facili11 tation of, such stealing, embezzlement, or ob12 taining by fraud, false pretenses, or other illegal 

13 means;’’; 

14 (2) by inserting before the paragraph inserted 

15 by subsection (a)(1) of this section, the following: 

16 ‘‘ ‘Online marketplace’ means— 

17 ‘‘(1) an Internet site where persons other than 

18 the operator of the Internet site can enter into 

19 transactions for the sale of goods or services and in 

20 which— 

21 ‘‘(A) such goods or services are promoted 

22 through inclusion in search results displayed 

23 within the Internet site; and 

24 ‘‘(B) the operator of the Internet site— 

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1 ‘‘(i) has the contractual right to su2 pervise the activities of the person with re3 spect to such goods or services; or 

4 ‘‘(ii) has a financial interest in the 

5 sale of such goods or services;’’; 

6 (3) by inserting after the second paragraph, re7 lating to the definition of ‘‘cattle’’, the following new 

8 paragraph: 

9 ‘‘ ‘Internet site’ means a location on the Inter10 net accessible at a specific Internet domain name, is 

11 accessible at a specific address under the Internet 

12 Protocol (or any successor protocol), or is identified 

13 by a uniform resource locator;’’; and 

14 (4) by inserting before the paragraph inserted 

15 by paragraph (3) of this subsection, the following 

16 new paragraph: 

17 ‘‘ ‘High-volume seller’ means a seller on an on18 line marketplace who in the past 12 months has 

19 made or offered to make discrete transactions aggre20 gating at least $12,000;’’. 

21 (b) TRANSPORTATION OF STOLEN GOODS.—The first 

22 paragraph of section 2314 of title 18, United States Code, 

23 is amended by inserting ‘‘or engages in organized retail 

24 crime involving the transporting, transmitting, or transmstockstill on PROD1PC66 with BILLS

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1 ferring in interstate or foreign commerce any goods, 

2 wares, or merchandise,’’ after ‘‘$5,000 or more,’’. 

3 (c) SALE OR RECEIPT OF STOLEN GOODS.—The first 

4 paragraph of section 2315 of title 18, United States Code, 

5 is amended by inserting ‘‘or engages in organized retail 

6 crime involving receiving, possessing, concealing, storing, 

7 bartering, selling, or disposing of any goods, wares, or 

8 merchandise,’’ after ‘‘$5,000 or more,’’. 

9 (d) FRAUD IN CONNECTION WITH ACCESS DE10 VICES.—Section 1029(e)(1) of title 18, United States 

11 Code, is amended— 

12 (1) by inserting ‘‘(including gift card)’’ after 

13 ‘‘card’’; 

14 (2) by inserting ‘‘(including a Universal Prod15 uct Code label)’’ after ‘‘code’’; and 

16 (3) by inserting ‘‘(including a radio frequency 

17 identification transponder)’’ after ‘‘identifier’’. 

18 (e) FACILITATION OF ORGANIZED RETAIL CRIME.— 

19 (1) IN GENERAL.—The first paragraph of sec20 tion 2315 of title 18, United States Code, as amend21 ed by subsection (c) of this section, is further 

22 amended by inserting ‘‘, or facilitates such organized 

23 retail crime, including, but not limited to, facilitation 

24 through the operation of an online marketplace for 

25 the sale of goods and services, knowing or having 

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1 reasonable cause to know that such organized retail 

2 crime is facilitated by such operation’’ before ‘‘; or’’ 

3 at the end of the paragraph. 

4 (2) OPERATOR OF AN ONLINE MARKET5 PLACE.—Section 2315 of title 18, United States 

6 Code, is further amended by inserting before the last 

7 paragraph the following: 

8 ‘‘It is unlawful for an operator of an online market9 place to fail to— 

10 ‘‘(1) expeditiously investigate when credible evi11 dence of sales of goods or services acquired through 

12 organized retail crime on its online marketplace 

13 comes to its attention, and remove from the online 

14 marketplace or disable access to material from the 

15 online marketplace of sellers offering goods or serv16 ices when the result of the investigation provides 

17 knowledge or a reasonable cause to know that the 

18 goods or services were acquired through organized 

19 retail crime, and maintain a record of all investiga20 tions for a minimum of three years; 

21 ‘‘(2) require the seller of property whose mer22 chandise packaging identifies the property as being 

23 available from a particular or exclusive retail source, 

24 to post such identifying information conspicuously 

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1 on the Internet site where other information about 

2 the property is posted; and 

3 ‘‘(3) in the case of each high volume seller— 

4 ‘‘(A) maintain the following information 

5 for three years— 

6 ‘‘(i) the name, telephone number, e7 mail address, legitimate physical address, 

8 any user identification, and company name 

9 of the high-volume seller; and 

10 ‘‘(ii) all transactions conducted by 

11 each high-volume seller on the online mar12 ketplace for the most recent three-year pe13 riod; and 

14 ‘‘(B) require any high-volume seller to— 

15 ‘‘(i) conspicuously post its name, tele16 phone number, and legitimate address on 

17 the Internet site where other information 

18 about the property being sold by the high19 volume seller is posted; or 

20 ‘‘(ii) provide, upon request of any 

21 business that has a reasonable suspicion 

22 that goods or services at the site were ac23 quired through organized retail crime, its 

24 name, telephone number, and legitimate 

25 physical address.’’. 

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1 (f) REVIEW AND AMENDMENT OF FEDERAL SEN2 TENCING GUIDELINES RELATED TO ORGANIZED RETAIL

3 CRIME.— 

4 (1) REVIEW AND AMENDMENT.—The United 

5 States Sentencing Commission, pursuant to its au6 thority under section 994 of title 28, United States 

7 Code, and in accordance with this section, shall re8 view and, if appropriate, amend the Federal sen9 tencing guidelines (including its policy statements) 

10 applicable to persons convicted of offenses involving 

11 organized retail crime under— 

12 (A) sections 1029, 2314, and 2315 of title 

13 18, United States Code; and 

14 (B) any other relevant provision of the 

15 United States Code. 

16 (2) REQUIREMENTS.—In carrying out the re17 quirements of this section, the United States Sen18 tencing Commission shall— 

19 (A) ensure that the Federal sentencing 

20 guidelines (including its policy statements) re21 flect— 

22 (i) the serious nature of the offenses 

23 and penalties referred to in this Act; 

24 (ii) the magnitude of organized retail 

25 crime; and 

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1 (iii) the need to deter, prevent, and 

2 punish such offense; 

3 (B) consider the extent to which the Fed4 eral sentencing guidelines (including its policy 

5 statements) adequately address violations of the 

6 sections amended by this Act to sufficiently 

7 deter and punish such offenses; 

8 (C) maintain reasonable consistency with 

9 other relevant directives and sentencing guide10 lines; 

11 (D) account for any additional aggravating 

12 or mitigating circumstances that might justify 

13 exceptions to the generally applicable sentencing 

14 ranges; and 

15 (E) consider whether to provide a sen16 tencing enhancement for those convicted of con17 duct proscribed by this Act, where such conduct 

18 involves— 

19 (i) organized retail crime; 

20 (ii) sale or resale of a product in an 

21 online marketplace; 

22 (iii) a threat to public health and 

23 safety, including but not limited to alter24 ation of an expiration date or of product 

25 ingredients; 

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1 (iv) theft, conversion, alteration, or re2 moval of a product label; 

3 (v) alteration, transfer, theft, conver4 sion, counterfeiting, or reproduction of a 

5 Universal Product Code label; and 

6 (vi) use of a fire or emergency exit. 

7 (g) CIVIL FORFEITURE.— 

8 (1) Section 2315 of title 18, United States 

9 Code, is further amended by inserting before the last 

10 paragraph the following: 

11 ‘‘This section shall have the following civil forfeiture 

12 provisions: 

13 ‘‘(1) Any property used, in any manner or part, 

14 to commit organized retail crime or the facilitation 

15 of organized retail crime shall be subject to for16 feiture to the United States. 

17 ‘‘(2) The provisions of chapter 46 of this title 

18 relating to civil forfeitures, including section 983 of 

19 this title, shall extend to any seizure or civil for20 feiture under this section. At the conclusion of the 

21 forfeiture proceedings, the court, unless otherwise 

22 requested by an agency of the United States, shall 

23 order that any forfeited article be returned to the 

24 rightful owner or otherwise disposed of according to 

25 law. 

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1 ‘‘(3)(A) The court, in imposing sentence on a 

2 person convicted of an offense under this section, 

3 shall order, in addition to any other sentence im4 posed, that the person forfeit to the United States— 

5 ‘‘(i) any property constituting or de6 rived from any proceeds the person ob7 tained, directly or indirectly, as the result 

8 of the offense of organized retail crime or 

9 the facilitation of organized retail crime; 

10 and 

11 ‘‘(ii) any of the person’s property 

12 used, or intended to be used, in any man13 ner or part, to commit, facilitate, aid, or 

14 abet the commission of either such offense. 

15 ‘‘(B) The forfeiture of property under subpara16 graph (A), including any seizure and disposition of 

17 the property and any related judicial or administra18 tive proceeding, shall be governed by the procedures 

19 set forth in section 413 of the Comprehensive Drug 

20 Abuse Prevention and Control Act of 1970 (21 

21 U.S.C. 853), other than subsection (d) of that sec22 tion. Notwithstanding section 413(h) of that Act, at 

23 the conclusion of the forfeiture proceedings, the 

24 court shall order that any forfeited article or compomstockstill on PROD1PC66 with BILLS

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1 nent of an article bearing or consisting of a counter2 feit mark be destroyed. 

3 ‘‘(4) When a person is convicted of an offense 

4 under this section, the court, pursuant to sections 

5 3556, 3663A, and 3664, shall order the person to 

6 pay restitution to the owner of the property and any 

7 other victim of the offense as an offense against 

8 property referred to in section 3663A(c)(1)(A)(ii). 

9 ‘‘(5) The term ‘victim’, as used in paragraph 

10 (4), has the meaning given that term in section 

11 3663A(a)(2).’’. 

12 SEC. 4. ACTIONS AGAINST AN OPERATOR OF AN ONLINE 

13 MARKETPLACE. 

14 (a) IN GENERAL.—Any business whose goods or serv15 ices were sold or otherwise used in the facilitation of orga16 nized retail crime through the operation of an online mar17 ketplace may bring a civil action against the operator of 

18 the online marketplace for violations of section 3(e) with 

19 respect to such goods and services in any district court 

20 of the United States to enjoin further violation of this Act 

21 by the person or entity and to recover damages for any 

22 loss resulting from such violation. 

23 (b) SUBSEQUENT ACTIONS.—A final judgment or de24 cree rendered in favor of the United States in any criminal 

25 proceeding brought by the United States under this Act 

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1 shall stop the defendant from denying the essential allega2 tions of the criminal offense in any subsequent civil pro3 ceeding brought by any business whose goods or services 

4 were sold or otherwise used in an act of organized retail 

5 crime. 

6 SEC. 5. NO PREEMPTION OF STATE LAW. 

7 No provision of this Act, including any amendment 

8 made by this Act, shall be construed as indicating an in9 tent on the part of Congress to occupy the field in which 

10 that provision or amendment operates, including criminal 

11 penalties, to the exclusion of any State law on the same 

12 subject matter that would otherwise be within the author13 ity of the State, unless there is a positive conflict between 

14 that provision or amendment and that State law so that 

15 the two cannot consistently stand together. 

16 SEC. 6. EFFECTIVE DATE. 

17 The amendments made by this Act take effect 120 

18 days after the date of the enactment of this Act. 

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