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Wednesday
Apr132011

Baby Formula Targeted by Organized Retail Theft Rings

BananaStock/Thinkstock(WASHINGTON) -- Infant formula has become such a hot commodity among sophisticated theft rings that it's been called "liquid gold."

The scale of baby formula shoplifting is so vast that it has become an interstate problem, drawn in the FBI and Immigration and Customs Enforcement, and forced chain stores to install elaborate anti-theft devices. Federal legislation has even been introduced that would make stealing baby formula subject to federal racketeering laws.

It is a problem on both coasts and hits small stores as well big chains.

"Grocery chains will tell you that formula is targeted so often that in some cases they have locked it up, moved it behind the cash register, strategically put it on the floor and in some cases, they put a limited supply on the shelves," said Joe LaRocca of the National Retail Federation.

Ed Paczkowski's family has run a grocery store in South Amboy, N.J., for 82 years. His office overlooks the baby formula aisle.

"We've had it stolen quite a few times," Paczkowski, 73, said. He even watched a theft last month. "I saw a guy by the formula...all of a sudden I see him take two big cans...I saw him jiggle around where he put them in his coat...then he came back and took two more," Paczkowski said.

On a grander scale, the "Hernandez Group" reportedly operated an organized retail theft ring for four years in California and Oregon, stealing $2.5 million in infant formula from Safeway stores until police busted the ring in December 2010, according to court documents.

The FBI defines organized retail theft as a theft ring that crosses state lines and involves the trafficking of at least $5,000 worth of goods. Last year, $15 billion to $30 billion were lost by retail stores from organized retail theft, according to the NRF.

In each type of store, different products are targets of theft rings. Hardware stores find it's usually power tools and drill bits that are lifted, while clothing stores have a hard time hanging on to their denim, and drug stores see razor blades and diabetic strips walking out of their stores.

"In the big spectrum of retail crime, infant formula is one of the top items," LaRocca said. 

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