Inside the organized crime rings plaguing retailers including Ulta, T.J. Maxx and Walgreens

In
a
tony
suburban
enclave
in
the
San
Diego
foothills,
police
say,
an
organized
retail
crime
“queenpin”
had
built
an
empire.

Tucked
behind
the
stone
walls
of
her
4,500-square-foot
Spanish-style
mansion,
Michelle
Mack
had
stockpiled
a
small
fortune
in
cosmetics
that
had
been
stolen
from


Ulta
and
Sephora
stores
across
the
country,
authorities
said. 

Police
don’t
suspect
that
Mack,
53,
took
the
items
herself.
Instead,
they
say,
she
pulled
the
strings
from
the
shadows,
employing
a
network
of
around
a
dozen
women
who
stole
the
items
for
her
so
she
could
resell
them
on


Amazon.

With
their
airfare,
car
rentals
and
other
travel
expenses
paid
by
Mack,
the
suspects
committed
hundreds
of
thefts
up
and
down
the
California
coast
and
into
Washington,
Utah,
Oregon,
Colorado,
Arizona,
Illinois,
Texas,
Florida,
Pennsylvania,
Massachusetts
and
Ohio,
investigators
said.
Mack
selected
which
stores
to
target
and
what
merchandise
to
take
and
the
women
were
sent
to
clear
out
entire
shelves
of
merchandise
before
making
off
with
the
stolen
goods
stuffed
into
Louis
Vuitton
bags,
investigators
said.

Investigators
began
referring
to
the
theft
group
as
the
“California
Girls”
and
considered
Mack
the
crew’s
ringleader.
She
made
millions
reselling
the
stolen
items
on
Amazon
to
unwitting
customers
at
a
fraction
of
their
typical
retail
price,
investigators
said,
before
she
was
arrested
in
early
December.

Law
enforcement
officials
say
Mack’s
alleged
theft
ring
is
just
one
of
the
many
that
are
plaguing
U.S.
retailers
and
costing
them
billions
in
losses
annually.
Their
rise
has
led
many
companies
to

lock
up
merchandise,
hire
security
guards
and

lobby
lawmakers
for
stricter
regulations.

These
organized
theft
groups
don’t
typically
carry
out
the
splashy
“smash
and
grab”
robberies
seen
in
viral
videos.
Instead,
they
pilfer
goods
quickly,
quietly
and
efficiently.
They
often
function
within
elaborate,
organized
structures
that
in
some
ways
mimic
the
corporations
they’re
stealing
from,
police
said.

CNBC
has
spent
about
eight
months
embedding
with
various
law
enforcement
agencies
and
investigating
theft
groups
to
understand

what
organized
retail
crime
looks
like
from
the
ground.
In
some
cases,
CNBC
witnessed
low-level
shoplifting
incidents
involving
people
who
appeared
to
be
homeless
or
mentally
ill.
In
other
instances,
CNBC
saw
takedowns
of
alleged
organized
theft
groups
that
police
said
were
reselling
stolen
merchandise
at
flea
markets.
Mack’s
group,
from
her
alleged
network
of
professional
thieves
to
her
lucrative
Amazon
marketplace,
was
by
far
the
most
sophisticated
one
CNBC
tracked
alongside
police.

But
federal
agents with
Homeland
Security
Investigations,
the
Department
of
Homeland
Security’s
law
enforcement
branch, said
some
crime
groups
are
even
more
elaborate
—
and
theft
is
just
one
facet
of
their
enterprises.

“We’re
talking
about
operations
that
have
fleets
of
trucks,
18-wheelers
that
have
palletized
loads
of
stolen
goods,
that
have
cleaning
crews
that
actually
clean
the
goods
to
make
them
look
brand
new,”
said
Adam
Parks,
an
assistant
special
agent
in
charge
at
HSI,
which
is
the
main
federal
agency
investigating
retail
crime.

“Just
like
any
business,
they’ve
invested
their
capital
into
business
assets
like
shrink
wrap
machines,
forklifts,”
Parks,
who
works
out
of
HSI’s
Baton
Rouge,
Louisiana,
office,
told
CNBC
in
an
interview.
“That
is
what
organized
theft
looks
like,
and
it
actually
is
indistinguishable
from
other
e-commerce
distribution
centers.”

These
theft
groups
in
their
myriad
forms
have
become
a
thorn
in
the
side
of
retailers
big
and
small,
prompting
retailers
to

cite
crime
as
the
reason
for
lower
profits,
the
inability
to
hire
and
retain
staff,
and
the
degradation
of
the
in-store
experience.
They
have
also
united
politically
divided
Americans
in
their
disdain
for
seeing
everyday
products
locked
up
behind
glass
cases
and
witnessing
brazen
theft
gone
unchecked
in
stores.

Whether
organized
retail
crime
is
actually
rising
is
up
for
debate.
Retailers
including


Target,


Foot
Locker,


Walgreens
and
Ulta
have

said
theft
is
a
growing
problem
in
recent
years.
But
few
have
said

how
often
it’s
happening
or
how
much
money
they’re
losing
from
it,
fueling
accusations
from
some
experts
and
analysts
that

they’re
blaming
crime
in
order
to
mask
operational
missteps.

The

National
Retail
Federation
estimates
that
retailers
lost
$40.5
billion
to
external
theft,
including
organized
retail
crime,
in
2022.
That
represented
about
36%
of
total
inventory
losses
—
slightly
lower
than
the
37%
in
2021.

Even
if
theft
has
not

meaningfully
reduced
some
retailers’
profits,
many
have
warned
that
crime
can
threaten
the
safety
of
workers
and
shoppers.

“The
financial
impact
is
real,
but
way
more
important
is
the
human
impact,
the
impact
it
has
to
our
associates,
the
impact
it
has
to
our
guests,”
Ulta
CEO
Dave
Kimbell
told
CNBC
in
a

rare
sit-down
interview.

“It
also
impacts
the
communities
in
which
we
live,”
he
said.
“If
people
don’t
feel
safe
going
in
to
shop
in
certain
areas
of
a
community,
it
really
has
an
impact
and
can
change
neighborhoods
and
change
communities
over
time.”

The
government
response
to
the
issue

has
grown
in
turn.
Both
local
and
federal
agencies
have
stepped
up
enforcement
of
laws
targeting
organized
retail
crime,
and
lawmakers
are

proposing
and
passing
more
measures
that
stiffen
penalties
for
theft
offenses.

HSI
initiated
59
cases
against
organized
theft
groups
in
fiscal
2021,
resulting
in
55
indictments
and
61
arrests,
the
agency
said.

By
the
end
of
fiscal
2023,
cases
had
more
than
tripled,
to
199.
Indictments
spiked
more
than
fivefold
to
284,
while
arrests
soared
to
386,
more
than
six
times
the
number
in
2021.

California
Highway
Patrol,
which
runs
one
of
the
most
active
retail
crime
task
forces
in
the
country,
reports
it
made
170%
more
arrests
for
organized
theft
offenses
in
2023
than
it
did
in
2022.

It’s
not
clear
whether
organized
theft
offenses
increased
in
that
time
or
officials
ramped
up
enforcement
as
the
issue
got
more
public
attention
and
the
retail
industry’s
lobbying
engine
pressed
them
to
make
it
a
priority.

CNBC
embedded
with
teams
from
HSI
and
California
Highway
Patrol
to
witness
four
organized
retail
crime
operations
for
this
investigation.
The
probe
is
also
based
on
more
than
a
dozen
interviews
with
law
enforcement
officers,
retail
leaders
and
customers,
along
with
records,
including
court
filings,
company
reports
and
property
records.

On
a
sweltering
Monday
morning
in
July,
about
a
dozen
agents
from
HSI
New
Orleans
gathered
behind
the
U.S.
Custom
House,
preparing
for
Operation
French
Quarter.

The
officers
were
instructed
to
pose
as
shoppers
inside
three
Walgreens
stores
and
one


CVS
store
in
the
area
seeing
high
rates
of
theft,
sometimes
as
many
as
20
to
30
incidents
per
day,
agents
said.

As
federal
law
enforcement
agents
who
typically
investigate
terrorism,
sex
trafficking
and
gang
leaders
such
as
Joaquin
“El
Chapo”
Guzman,
the
officers
weren’t
there
to
arrest
people
for
petty
theft. They
had
a
clear
directive:
Find
out
who’s
stealing
and
follow
them
out
of
the
store
to
determine
who
else
they
may
be
working
with.

“Obviously,
the
name
of
the
game,
guys
and
girls,
is
trying
to
get
the
bigger
and
better
fish,”
Assistant
Special
Agent
in
Charge
Scott
Robles,
who
led
the
operation,
told
the
assembled
officers.
“We’re
trying
to
identify
the
people
who
are
in
charge
of
this
organized
crime.”

At
the
bottom
of
organized
retail
crime
rings
are
boosters
—
the
people
who
go
into
stores
and
take
the
items.
Robles
was
hoping
the
serial
thieves
targeting
the
drugstores
could
lead
them
to
a
larger
operation.

“It
can
be
anybody.
It
could
be
the
mom
with
five
kids
just
looking
for
extra
money.
It
can
be
somebody
that’s
part
of
a
team.
…
They
may
be
getting
paid
with
food,
they
may
be
getting
paid
with
beer
or
drugs,”
Robles
said.
“Some
people
get
paid
cash
or
they’re
trying
to
work
off
a
debt.”

Throughout
the
hourslong
operation,
agents
identified
at
least
one
case
that
they
say
plainly
showed
organized
theft.

Surveillance
footage
of
the
incident
shows
a
man
enter
one
of
the
Walgreens
stores,
head
to
the
cosmetics
aisle,
remove
a
plastic
shopping
bag
from
his
pants
and
calmly
load
it
up
with
17
jars
of
nail
polish,
valued
at
around
$200.
He
then
walked
about
a
half
mile
away
to
the
New
Orleans
Public
Library’s
main
branch,
where
he
sold
the
nail
polish
to
a
security
guard,
police
said.

Federal
agents
briefly
questioned
the
security
guard,
and
the
incident
remains
under
investigation.

Beyond
that
instance,
the
vast
majority
of
the
thefts
agents
witnessed
during
the
operation
were
low-level
and
petty,
involving
people
who
appeared
to
be
homeless,
mentally
ill
or
transient.
One
man
stole
paper
towels
and
then
walked
into
a
homeless
shelter.
A
group
took
a
case
of
beer
and
later
went
to
a
park
to
drink
it.
A
woman
stole
a
case
of
water,
set
up
a
stand
to
resell
it
and
then
defecated
on
the
sidewalk.

Operation
French
Quarter
showed
how
the
lowest
level
of
a
retail
crime
operation
can
function,
and
how
even
small
thefts
can
involve
coordination
among
bad
actors.
Still,
the
incidents
underscore
the
challenges
investigators
face
when
trying
to
build
cases;
they
also
demonstrate
just
how
petty
many
thefts
are,
especially
in
urban
areas
with
high
rates
of
homelessness
and
addiction.

A
Walgreens
spokesperson
told
CNBC
that
the
chain
is
“focused
on
the
safety
of
our
patients,
customers
and
team
members”
and
is
taking
steps
to
“safely
deter
theft”
and
“deliver
the
best
patient
and
customer
experience.”

“We
are
working
closely
with
law
enforcement,
elected
officials
and
community
leaders
to
draw
greater
attention
to
and
improve
our
response
to
retail
crime,”
the
spokesperson
said.

Crates
filled
with
unopened
jugs
of
Gain,
Tide
and
Downy
detergent.
Boxes
stuffed
with
Gillette
razors,
Olay
moisturizer
and
Allegra
allergy
pills.
A
pile
of
sparkly
silver
boots
in
sizes
8,
9
and
10
with
the
T.J.
Maxx
tags
still
on.

This
is
just
some
of
the
merchandise
that
California
Highway
Patrol
found
inside
a
home
and
storage
container
belonging
to
suspected
members
of
an
organized
retail
crime
ring
during
a
raid
in
November.

In
all,
investigators
uncovered
nearly
20,000
items
valued
at
more
than
$550,000
across
five
locations
connected
with
the
group,
according
to
CHP.
Police
suspect
the
majority
of
the
items
were
stolen
from
T.J.
Maxx
stores
and
a
variety
of
drugstores
and
grocery
stores
in
and
around
the
Bay
Area.

CHP’s
probe
began
in
September,
when
investigators
from


TJX
Companies,
the
owner
of
T.J.
Maxx,
reached
out
to
the
agency’s
organized
retail
crime
task
force
with
information
about
a
crime
ring
that
it
said
was
buying
and
reselling
stolen
goods
—
a
“fencing”
operation.

When
boosters
need
to
cash
in
on
the
items
they
take,
they
turn
to
fencers,
who
buy
the
products
for
pennies
on
the
dollar
and
resell
them
at
a
margin
Wall
Street
could
only
dream
of,
retail
crime
investigators
have
said.

Experts
said
retailers
can
have
a
hard
time
persuading
law
enforcement
to
investigate
theft
at
stores
because
it
is
often
considered
a
property
crime,
which
police
tend
to
see
as
less
urgent
than
homicides,
shootings
and
narcotics
crimes.

To
show
law
enforcement
the
scope
of
the
problem,
TJX
investigators
began
conducting
surveillance
on
the
alleged
crime
ring.
CHP
agreed
to
take
the
case.
Sgt.
Manny
Nevarez,
who
oversees
all
organized
retail
crime
investigations
in
the
Bay
Area
for
CHP,
told
CNBC
the
group
had
hit
stores
in
multiple
counties
in
an
effort
to
evade
detection.

“They
are
not
catching
on
that
some
of
the
retailers
have
their
own
loss
prevention
personnel
and
typically,
if
you
target
one
store
in
San
Jose,
then
the
word
gets
out
and
then
the
next
store
is
notified,”
said
Nevarez. 

Police
learned
that
alleged
members
of
the
group
were
reselling
the
suspected
stolen
merchandise
out
of
their
homes
and
at
the
local
Capitol
Flea
Market
—
a
sprawling
swap
meet
on
the
outskirts
of
San
Jose.
Officers
also
witnessed
members
of
the
crew
receiving
suspected
stolen
merchandise,
transferring
those
goods
to
others
in
their
network
and
exchanging
money.

At
the
end
of
November,
dozens
of
CHP
investigators
working
with
TJX
descended
on
the
five
locations
connected
with
the
alleged
fencing
ring
and
carried
out
search
warrants
in
a
raid
cops
dubbed
“Operation
Kingsfall.”
The
locations
included
numerous
homes
along
with
a
storage
unit. 

“Nosotros
somos
policia,”
the
officers
shouted
in
Spanish
outside
one
of
the
homes.
“Police,
search
warrant.
Open
the
door
with
your
hands
up,”
they
continued,
switching
between
English
and
Spanish
before
using
a
battering
ram
to
knock
down
the
door.

The
location,
an
innocuous
single-family
home
with
Christmas
decorations
out
front,
looked
like
any
other
on
the
block.
But
on
the
sidewalk
and
grass
near
the
property
line
sat
dozens
of
discarded
clothing
tags,
anti-theft
devices,
hangers
and
other
retail
store
detritus.

Inside
the
home,
CHP
officers
and
TJX
personnel
found
mountains
of
goods
they
suspect
were
stolen
to
resell,
including
bags
of
apparel
with
the
tags
still
affixed,
boxes
of
Huggies
diapers,
liquor
and
power
tools.

By
the
time
authorities
completed
the
raids,
they
had
enough
suspected
stolen
merchandise
to
fill
three
20-foot-long
U-Haul
trucks.
A
spokesperson
for
the
Santa
Clara
County
District
Attorney
said
it
is
charging
nine
defendants
in
connection
with
the
alleged
crime
ring.

The
law
enforcement
operation
witnessed
by
CNBC
showed
the
breadth
of
some
of
the
fencing
rings
in
the
U.S.
and
how
flea
markets
can
play
a
role
in
the
sale
of
stolen
goods.
Capitol
Flea
Market
didn’t
respond
to
a
request
for
comment. 

“There’s
certain
crimes
that
come
up
where
the
public
reaches
a
point
where
they’re
like,
‘We
have
had
enough
of
this,’
right?”
Lt.
Michael
Ball,
who
helped
oversee
the
operation,
told
CNBC.
“And
this
is
one
of
those
that’s
reached
that
level
where
people
are
saying
widely
and
shouting
it
all
the
way
up
to
our
governor’s
office
that
they
have
had
enough
of
this.”

In
a
statement,
a
TJX
spokesperson
said
the
company
is
“thankful”
for
CHP’s
efforts
and
is
taking
organized
retail
crime
“very
seriously.”
The
spokesperson
said
TJX
is
“laser-focused
on
ways
to
mitigate
theft
in
our
stores.”

The
company
told
CNBC
it
will
not
resell
the
recovered
merchandise.
If
TJX
considers
the
items
to
be
in
suitable
condition,
it
will
donate
them
to
charities
in
the
area
where
they
were
found,
the
company
said.
If
it
deems
the
products
unsuitable,
it
will
work
to
dispose
of
them
“responsibly,”
it
said.

When
Donna
Washburn
started
shopping
for
a
Christmas
gift
for
her
daughter
in
December,
she
wanted
to
“splurge”
and
buy
her
a
bottle
of
Nars
foundation.
But
she
couldn’t
find
it
in
stock
at
a
store
close
to
home.

So,
like
many
consumers,
she
Googled
the
product.
She
saw
it
was
available
on
Amazon
and
cost
around
$38
before
tax,
nearly
30%
cheaper
than
its
typical
retail
price
of
$52.

“I
said,
you
know,
‘It’s
Amazon,
it’ll
come
fast.’
It
was
the
beginning
of
December.
So
I
really
didn’t
want
to
wait
too
much
longer
for
Christmas,”
Washburn
told
CNBC
in
an
interview,
adding
she
was
told
it
would
arrive
by
Dec.
11.

Unknown
to
Washburn,
police
say,
that
bottle
of
foundation
had
likely
been
stolen
by
the
crew
of
boosters
allegedly
employed
by
Mack
—
the
suspected
retail
crime
mastermind
accused
of
running
an
illicit
business
from
her
San
Diego
mansion.

The
Christmas
gift
ultimately
never
arrived,
because
Mack
was
arrested
before
she
could
ship
the
package,
which
was
one
of
many
found
in
Mack’s
residence
by
investigators.

“I
pay
attention,
but
not
that
much,
you
know?”
said
Washburn,
a
63-year-old
clinical
education
associate
in
St.
Augustine,
Florida.
“I’m
shopping
from
Amazon.
Hopefully
you
can
trust
it.
So
now
that
we
know
better
…
we’ll
think
twice.”

Washburn
had
bought
the
foundation
from
an
Amazon
storefront
dubbed
Online
Makeup
Store,
which
Mack
had
opened
in
2012.
CNBC
viewed
it
before
it
was
taken
down
in
late
2023.

On
its
face,
Mack’s
storefront
looked
no
different
from
the
millions
of
others
on
Amazon’s
marketplace.
It
had
4.5
stars
on
more
than
100
reviews,
and
featured
cosmetics
from
popular
brands
such
as
Mac,
Tarte
and
Charlotte
Tilbury
that
shoppers
can
find
in
neighborhood
beauty
stores.

There
was
just
one
red
flag:
the
prices.
Many
of
the
products
for
sale
at
Mack’s
store
were
listed
at
a
fraction
of
the
typical
retail
price,
including
a
$25
bottle
of


Estee
Lauder
foundation
that
typically
retails
for
$52
and
Too
Faced
mascara
that
typically
goes
for
$29
and
was
being
sold
for
$17.

The
store
brought
in
millions.
Since
2012,
Mack
sold
nearly
$8
million
in
cosmetics
through
the
storefront
before
it
was
shut
down,
and
she
brought
in
$1.89
million
in
2022
alone,
Amazon
sales
records
provided
to
investigators
show.

Mack
could
offer
such
low
prices,
police
suspect,
because
her
crew
of
boosters
had
stolen
the
products
in
hundreds
of
incidents
over
more
than
a
decade.
Some
of
the
thefts
brought
in
around
$2,000
in
merchandise
while
others
netted
as
much
as
$50,000
worth
of
merchandise,
prosecutors
said.

Mack’s
business
was
humming
along
ahead
of
the
holiday
shopping
season
until
the
carefully
crafted
empire
police
say
she
built
crumbled.
On
a
cool
December
morning
just
before
dawn,
a
convoy
of
CHP
and
HSI
agents,
armed
with
a
search
warrant,
raided
her
sprawling
mansion.

Mack,
dressed
in
a
baby
pink
pajama
set
and
a
pair
of
fuzzy
mule
slippers,
was
handcuffed
and
put
into
a
police
car
as
her
teenage
daughters
stood
in
the
driveway,
watching.

Inside
her
garage,
investigators
found
what
they
described
as
a
“mini-store”
—
shelves
and
shelves
of
beauty
products,
sunglasses
and
designer
bags
organized
in
neat
bins
and
categorized
by
product.
They
also
found
hundreds
of
postmarked
yellow
envelopes
destined
for
unwitting
customers,
including
Washburn,
with
“Online
Makeup
Store”
marked
as
the
return
address.

Police
recovered
nearly
10,000
items
worth
a
total
of
more
than
$387,000,
CHP
said.

In
February,
California
Attorney
General
Rob
Bonta
filed
a
total
of
140
felony
charges
against
Mack;
her
husband,
Kenneth
Mack;
and
seven
other
alleged
members
of
the
crew.
The
charges
included
conspiracy
to
commit
organized
retail
theft,
grand
theft
and
receipt
of
stolen
property.
The
defendants
have
all
pleaded
not
guilty.
CNBC
contacted
each
defendant
multiple
times
for
comment,
but
none
of
them
responded.

“This
is
a
multimillion-dollar
criminal
scheme.
It
was
complex.
It
was
orchestrated,” Bonta
said
when
announcing
the
charges.
“We
are
not
talking
about
garden-variety
shoplifting.”

Court
records
filed
in
connection
with
the
case
provide
a
rare
glimpse
into
the
inner
workings
of
an
alleged
organized
retail
crime
ring.
They
show
text
messages
between
the
suspects
and
details
about
the
operation.

“I’m
not
stealing
regular
I’m
going
to
start
filling
up
my
bag
quick.
So
I
want
to
know
stuff
I
can
grab
in
bulks
too,”
Kimora
Lee
Gooding
texted
Michelle
Mack
on
Jan.
7,
2023.

Between
Jan.
30
and
Feb.
16,
2023,
Gooding
committed
at
least
10
separate
thefts
at
Ulta
stores
across
California,
prosecutors
allege
in
court
records.
In
each
case,
Gooding
took
more
than
$950
worth
of
goods,
the
records
say.

On
Feb.
21,
a
few
days
after
Gooding’s
string
of
thefts,
Mack
sent
her
a
screenshot
of
“Online
Makeup
Store”
with
an
address
she
could
ship
the
stolen
products
to.
It
was
the
same
business
address
that
was
listed
on
Mack’s
Amazon
page
before
it
was
shut
down,
and
traced
back
to
a
post
office
box
a
few
miles
from
her
home.

“Even
without
lancome
we
still
did
well,”
Michelle
Mack
texted
her
husband
two
days
later,
allegedly
referencing
a
prestige
cosmetics
brand
owned
by
L’Oreal.

Soon,
orders
were
pouring
into
Michelle
Mack’s
Amazon
store.

“Lots
of
orders
let’s
get
shipping,”
Kenneth
Mack
texted
Michelle
Mack
alongside
an
image
that
showed
a
bin
full
of
paper.

By
July
8,
it
appeared
that
the
haul
Gooding
and
others
had
allegedly
brought
in
had
dried
up.
Michelle
Mack
needed
more
things
to
sell.

“Did
you
get
some
new
girls?”
Michelle
Mack
texted
Alina
Franco,
another
person
charged
in
connection
with
the
theft
crew.
“I
really
need
product
so
if
you
have
anything
please
let
me
know.”

A
day
later,
two
more
thefts
connected
to
the
ring
were
committed
and
many
more
followed,
prosecutors
said.

In
addition
to
Ulta
and
Sephora,
the
theft
organization
targeted
a
range
of
other
retailers,
including


Macy’s-owned
Bloomingdale’s,
Prada,


Bath
&
Body
Works,


Victoria’s
Secret,
and
Luxottica’s
Sunglass
Hut
and
LensCrafters,
prosecutors
said.

Sephora
and
Bath
&
Body
Works
declined
to
discuss
the
case
with
CNBC.
Macy’s,
Prada,
Sunglass
Hut
and
LensCrafters
didn’t
respond
to
requests
for
comment.

A
spokesperson
for
Victoria’s
Secret
said
the
company
cooperated
with
CHP’s
investigation.

“We
take
matters of
theft
seriously
and
always
prioritize the
safety
of
our
associates
and
customers,”
the
spokesperson
said.

Despite
the
recent
surge
of
headlines
and
commentary
on
the
topic,
organized
theft
groups
have
long
operated
around
the
world.
But
retail
industry
leaders
and
some
law
enforcement
officials
argue
the
rise
of
online
marketplaces
and
e-commerce
has
caused
such
incidents
to
increase
or
have
made
it
easier
for
theft
groups
to
operate.

“There’s
an
ease
of
distribution
that
has
become
even
more
prevalent
for
stolen
goods
through
online
marketplaces.
…
You
used
to
have
to
sell
stolen
goods
at
flea
markets
or
out
of
the
trunk
of
your
car
or
maybe
just
locally,”
said
Ulta’s
Kimbell.
“Now,
you
have
more
sophisticated
tools
to
have
a
broader
reach
across
the
country
or
even
internationally.”

While
Kimbell
didn’t
name
Amazon
specifically,
he
said
online
marketplaces
are
“part
of
the
problem”
and
should
be
using
the
data,
analytics
and
other
technology
available
to
them
to
be
more
“proactive”
in
shutting
down
bad-actor
sellers.

“We
shouldn’t
have
an
environment
where
it’s
possible
to
steal
from
one
retailer
and
[have
it]
end
up
on
any
other
platform,
any
other
large-scale,
mainstream
platform”
that
people
consider
legitimate,
said
Kimbell.

Bonta
called
on
Amazon
and
other
marketplaces
to
“do
more.”
He
said
they
could
inform
law
enforcement,
or
at
least
talk
to
a
seller,
when
red
flags
such
as
unusually
cheap
goods
pop
up.

“If
you
freeze
out
the
demand
and
remove
the
market
by
closing
out
the
marketplace
where
the
stolen
goods
are
so
easily
sold,
you
make
organized
retail
crime
as
an
organized
crime
less
attractive.
And
we
need
to
create
barriers,
instead
of
ease,
for
the
ability
to
commit
these
crimes,”
Bonta
said
in
an
interview.

In
response,
an
Amazon
spokesperson
said
that
the
company
has
“zero
tolerance
for
the
sale
of
stolen
goods”
and
that
the
company
invests
more
than
$1
billion
annually
in
preventing
fraud
and
abuse.

“We
leverage
sophisticated
detection
and
prevention
solutions
across
our
stores
and
fulfillment
operations,
allowing
us
to
quickly
spot
a
range
of
organized
retail
crime
(ORC)
schemes,”
the
spokesperson
said
in
a
statement.

The
spokesperson
said
Amazon
supports
efforts
to
trace
items
throughout
the
supply
chain
and
investigates
allegations
of
stolen
merchandise
to
find
out
how
products
were
obtained.

“When
we
identify
an
issue,
we
work
closely
with
law
enforcement,
retailers,
and
brands
to
stop
bad
actors
and
hold
them
accountable,
including
withholding
funds,
terminating
accounts,
and
making
law
enforcement
referrals,”
which
have
led
to
arrests,
product
seizures
and
the
disruption
of
retail
crime
rings,
the
spokesperson
wrote.

The
company
said
it
assisted
with
the
investigation
into
Michelle
Mack’s
alleged
theft
crew
and
provided
evidence
to
investigators.
It
said
it’s
“pleased”
the
suspects
were
arrested
because
it
“sends
a
strong
message
that
the
sale
of
stolen
goods
has
severe
consequences.”

Consumers,
many
of
whom
are
hungry
for
deals
as
they
contend
with
lingering
inflation
and
high
interest
rates,
may
feel
that
buying
stolen
goods
is
a
victimless
crime,
experts
say.

Michael
Krol,
HSI’s
special
agent
in
charge,
disagrees
with
that
idea.
He
said
not
only
does
theft
lead
to
higher
prices
for
consumers
but
also
the
items
they’re
buying
could
be
unsafe
because
of
how
they
were
stored
or
otherwise
manipulated.

“Those
items
might
not
have
the
quality
assurance
and
compliance
that
we
expect
in
the
United
States.
Baby
formula,
your
medicines
…
[Consumers]
could
be
buying
baby
formula
that’s
expired
by
three
months,”
said
Krol.

The
Inform
Consumers
Act,
which
took
effect
in
June,
was
designed
to
curb
the
sale
of
stolen,
counterfeit
or
otherwise
harmful
products
on
online
platforms
by
requiring
marketplaces
to
verify
and
share
identifying
information
on
certain
third-party
sellers.

The
law
was
designed
to
prevent
the
exact
type
of
illicit
business
Michelle
Mack
is
accused
of
conducting
on
Amazon.
If
sellers
are
required
to
provide
their
contact
information
to
marketplaces
and
on
their
listings,
bad
actors
may
be
deterred
from
selling
illicit
goods.

However,
Michelle
Mack’s
business
name
and
an
address
belonging
to
it
had
been
verified
and
was
publicly
available
on
her
seller’s
page.
She’d
already
been
on
the
platform
for
more
than
a
decade
by
the
time
the
Inform
Act
rolled
around.

The
verification
process
that
Amazon
conducted
for
Michelle
Mack’s
store
after
the
Inform
Act
passed
wasn’t
enough
to
raise
the
company’s
suspicions,
either.

“In
this
instance,
we
did
not
receive
signals
to
identify
the
seller
was
engaged
in
selling
stolen
goods,”
Amazon
said.

As
part
of
the
law,
marketplaces
are
also
required
to
provide
a
way
for
people
to
report
suspicious
product
listings.
But
the
law
doesn’t
require
the
marketplaces
to
do
anything
with
that
information.

“Amazon
works
hard
to
ensure
our
store
is
a
safe
and
trusted
place
for
shoppers,”
Amazon
says
on
a
page
where
people
can
report
suspicious
listings.
“If
you
believe
any
product,
seller
or
other
activity
in
our
store
is
suspicious,
please
report
this
using
one
of
the
below
methods.”

“While
we
are
not
able
to
respond
directly
to
each
report,”
it
says,
“we
appreciate
your
feedback.” 

—
Additional
reporting
by
Ali
McCadden

—
Clarification:
This
story
was
updated
to
include
a
comment
from
Victoria’s
Secret
after
publication.