Black Market Billions: How Organized Retail Crime Funds Global Terrorists

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FT Press, 2012 - Political Science - 316 pages
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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.

 

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Shoplifting (now called Organized Retail Crime) is no longer perpetrated just by people from the inner city needing money for drugs. It is a multi-billion dollar, worldwide industry enriching various terrorist groups all over the world.
These are very tight-knit groups, akin to Mafia "families." The "boosters" travel certain routes around America, doing the actual shoplifting. They give the items to a Level 1 fence, who might give or sell them to a level 2 or 3 fence. These could be legitimate import/export businesses doing the fencing, with the illegal part as a sideline. By this time, it is nearly impossible to track the items. Sometimes, the items are sold right back to the retailer from which they were stolen. They could also be sold on online auction sites (like ebay), and they could show up at your local flea market. There are occasional high-profile seizures of millions of dollars in fake or stolen goods, but, in general, the thieves are several steps ahead of the authorities.
Various law enforcement agencies, from the local to the federal level, either can't, or don't want to, share information. They all want the "big score." Individual state laws are full of loopholes, or are ambiguous, about basic things like the definition of "shoplifting." When someone is arrested, the local District Attorney's office might not want to spend the time following the money, or may be interested only in "Mr. Big." There are a number of ways to move money overseas that get around the federal $10,000 threshold. Thieves are certainly using them, but legislation has yet to catch up.
What can the average mall retailer do about it? They can start by training their employees to watch for shoplifters. Especially during the holidays, many part-timers are hired who are not trained in loss prevention, or who don't care (very often, employees are doing the stealing). Stores need to balance increased spending on loss prevention against not driving away customers. During the current economic uncertainty, everyone wants a bargain. Is that "discounted" designer handbag or infant formula really such a bargain knowing that your money could end up in the coffers of Colombia's FARC or Hamas?
To call this book an eye-opener is a huge understatement. It is a very interesting book that is highly recommended.
 

Contents

Introduction
1
The Piracy Economy
7
Follow the Money
75
Putting a BandAid on a Broken Leg
199
Epilogue
243
Glossary
247
Endnotes
271
Index
299
Copyright

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About the author (2012)

Hitha Prabhakar is a New York-based reporter for Bloomberg Television, covering business news and financial markets with a particular focus on retail. Before joining Bloomberg Television in 2011, Prabhakar was founder and principal of The Stylefile Group, a retail consulting firm based in New York City, where she served as an advisor to hedge funds and other clients with long-term holdings in retail companies. Prior to that, Prabhakar served as a retail reporter for Forbes Media, covering the luxury industry as well as men's fashion. She has written for Time, People, MSNBC.com, ELLE India, and Metro newspapers, among other publications. Prabhakar was formerly a contributor on CNBC and has had numerous television appearances as a retail analyst on networks including CBS, CNN, Fox News, Sky News, and Bravo. She holds degrees in philosophy and economics from Smith College and a master's degree from Columbia University Graduate School of Journalism. She also studied at the London School of Economics.

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