Black market billions : how organized retail crime funds global terrorists

From piracy to counterfeiting to cargo theft, organized retail crime has exploded into a $38 billion industry. Synchronized global teams of thieves are pilfering immense volumes of high-value products, counterfeiting even more--and using the profits to support the world’s most vicious terrorists and criminal gangs. In this eye-opening piece of investigative journalism, top business reporter Hitha Prabhakar connects the dots and follows the money deep into the world’s fastest-growing criminal industry. You'll learn how the Internet, social media, and disposable cell phones have opened the floodgates for a new generation of criminals--and how buying something as innocent as a counterfeit handbag or discounted cigarettes actually funds terrorist groups from Al-Qaeda to Central America’s drug lords. Black Market Billions draws on extensive first person interviews with law enforcement, industry, and the criminals themselves to reveal how retail crime rings impact the security in every country in which they operate. Prabhakar goes "inside" to reveal why the piracy economy has exploded...why preventive measures have failed...and what to expect next, as organized retail crime reaches a terrifying critical mass. Contents 8 Introduction 18 Part I: The Piracy Economy 24 Chapter 1 Organized Retail Crime Goes Global 26 Why Is ORC Such a Threat? 28 The Promised Land: Money Talks 30 Made in America: Homegrown Terrorism 34 Recruiting from the Inside 36 From Prison to Gangs to the World’s Most Notorious Terrorist Group 38 Access to Funding Gets Creative 42 Burrowing In: The Hezbollah Finds a Home in the U.S. and South America 44 From America to South America: Ties Get Stronger in the Tri-Border Region 45 Chapter 2 When a Deal Isn’t a Deal 48 Getting a Slice of Luxury the Cheapest Way Possible 51 The “Real Deal” 53 Dying for a Deal: The Recession Doesn’t Make Aspirations Go Away 55 Big Takedowns Take Precedence Over Smaller Offenders 56 Counterfeiters and ORC Move Their Operations Online 57 eBay’s Swift Response 59 Too Little, Too Late 61 Lurking in the Shadows: Stolen Gift Cards Bought Online 62 Easy to Obtain, Easy to Sell 63 Fake-out: Retailers Fronting as Legitimate Stores 65 Protecting Yourself: Know the Signs of E-fencing/ORC 68 Chapter 3 The Cost to the Stores 70 The Blame Game 71 Insider Information: Employee Theft and ORC 71 Human Resources Fail: Hiring the Wrong People 73 Wholesale Scam: Terrorist-Affiliated Warehouses Sell to the Little Guy 78 Taking a Bite Out of the Balance Sheet: Economic Downturn Fosters Cargo Theft 81 Coordinating Information in Real Time: LAPD and APD Case Studies 84 Part II: Follow the Money 92 Chapter 4 The Money Trail and the Business of Cross-Border Trade 94 The Warehouse: Ground Zero for Cross-Border Trade 97 Profile of a Purchaser 98 Keeping Shelves Stocked Through Cargo Theft 100 Coveted Items: Over-the-Counter Drugs 101 Profile of a Cargo Thief 103 “Shell Stores”: A Conduit for Organized Retail Crime 104 Shell Stores Move Online 106 A Hotbed of Stolen Merchandise: Flea Markets 108 Nabbing the Bad Guys: Classifying Organized Retail Crime as a Felony 108 Insurance Companies: The Missing Link 110 The Gray Market: Another Retail Facilitator of ORC 111 Laws Have Been Passed, But Are They Helping? 112 Chapter 5 Profile of a Booster and a Fence 114 Moving the Merchandise: The Role of a Fence 117 Being Convicted as a Level 1 Fence: More Like a Slap on the Wrist Than a Slap in the Face 118 The Level 2 Booster: Inside the Mind of a Potentially Dangerous Criminal 121 Other Forms of Theft from a Level 2 Booster 123 Level 3 Boosters and Fences: A High-Level Organization Equals High Profits 125 Level 3 Boosters: Frequently Lifted Merchandise 129 Curbing Boosters and Fences: What Does and Doesn’t Work 132 Chapter 6 Family Ties 136 When Family Funds Support Terrorism 138 Assad Muhammad Barakat and His “Family” 140 Illegal Entry into the U.S. Is Not Difficult—if You Have Money 144 The Great Entrepreneurs: Terrorists 149 The Trust Factor: The Basis of Any Organized Retail Crime Ring 153 Chapter 7 Money Laundering 2.0 156 The Three Stages of Money Laundering 158 Organized Retail Crime and Latin America 168 Funneling Money Through the Black Market Peso Exchange 169 The South American, Mexican, and African Connection 172 Chapter 8 The Political Agenda 176 Homegrown Terrorism: How Retail Theft and Piracy Has Funded Terrorist Operations 177 Rebel Kids: Extremist Ideas Financed Through International ORC 180 When Things Went Awry 181 ORC Funding by Way of Somalia: A Tale of Two Misguided Kids 182 As Local as Down the Street 185 Funding Evil Under the Guise of Charitable Contributions: The Mosques 185 Muslim Charities: Capitalizing on Natural Disaster and Religious Empathy 186 Terrorist Fund-Raising Via Charities Finds Roots in the U.S. 189 Charitable Donation Loopholes: How the IRS and Banking Systems Failed to Prevent Fraudulent ORC Funds from Financing Terrorist Groups 190 Charities Turn to a Cyber Audience 192 Why the Government Can’t Regulate Charities 192 Chapter 9 Strange Bedfellows 196 How Banned TVs Funded Bombings 197 The Business of Cigarette Smuggling 200 The EC Versus R.J. Reynolds Tobacco 202 The Role of Money Brokers and Money Launderers 203 The History of Cigarette Smuggling 205 Cigarette Smuggling Funds Local Terrorism Around the World 206 Chiquita International Brands: “Either You Pay Me, or I Am Going to Kill You.” 209 Dole Foods’ Involvement with the Colombian Paramilitary 212 Part III: Putting a Band-Aid on a Broken Leg 216 Chapter 10 The Failure of Preventative Measures 218 Acting Locally, Thinking Globally 219 Types of ORC Theft Prevention That Are Supposed to Work But Don’t 221 A Bottom-Line Breakdown of Costs 224 Legal Issues: Defining ORC Versus Shoplifting and Shrinkage 232 Regulating the Resale Market 233 Chapter 11 Letting the Bad Guy Get Away 236 Regulation Epic Fail: How Banking BSAs and AML Programs Let Terrorist Funding Slip Through the Cracks 239 Continued Failure to Regulate IFTs: The Costs to Local and Federal Governments as Well as Retailers 240 Failure to Regulate Hawalas 241 IFTs Get Sophisticated: Stored Value Cards 244 Bulk Cash Smuggling Comes in a Smaller Package 245 Retailers Feel the Pain of SVC Fraud 247 Credit Card Fraud Is Even Worse 248 RICO Defined 251 Why ORC Rings Still Exist: Money Laundering and the RICO Statute 252 More Problems with RICO: It’s in the Definition 253 Laws That Once Protected Potential Terrorists Have Changed 256 Defining “Material Support” and “Coordination” 256 Epilogue 260 Glossary 264 A 264 B 266 C 268 D 270 E 270 F 270 G 273 H 273 I 274 J 276 L 276 M 277 N 280 O 280 P 282 R 282 S 283 T 285 U 286 Z 287 Endnotes 288 Index 316 A 316 B 317 C 318 D 320 E 320 F 320 G 321 H 322 I 322 J 323 K 323 L 324 M 324 N 325 O 326 P 327 Q-R 328 S 329 T 330 U 332 V 332 W 332 X-Y 332 Z 333 From piracy to counterfeiting to cargo theft, organized retail crime has exploded into a $38 billion industry. Synchronized global teams of thieves are pilfering immense volumes of high-value products, counterfeiting even more--and using the profits to support the world’s most vicious terrorists and criminal gangs. In this eye-opening piece of investigative journalism, top business reporter Hitha Prabhakar connects the dots and follows the money deep into the world’s fastest-growing criminal industry. You'll learn how the Internet, social media, and disposable cell phones have opened the floodgates for a new generation of criminals--and how buying something as innocent as a counterfeit handbag or discounted cigarettes actually funds terrorist groups from Al-Qaeda to Central America’s drug lords. __Black Market Billions____and the criminals themselves__ Black Market Billions blows the lid off the world's fastest-growing illicit industry: organized retail crime. Hitha Prabhakar reveals how criminals with ties to terrorist groups around the world are committing huge product thefts, and using the profits to fund terrorist acts. Prabhakar connects the dots and follows the money ... from consumers "dying for a deal" to terrorist cells eager to do the killing