How organized shoplifting rings work, and how police in one Ohio town are fighting back
Category: News & PoliticsVia: perrie-halpern • 4 weeks ago • 1 comments
By: Simone Weichselbaum and Andrew Blankstein
PERRYSBURG TOWNSHIP, Ohio — He called himself Rick Nye, at least on Facebook Marketplace. His friendly profile picture featured a little girl giving him a hug. His page was filled with great deals — deeply discounted power tools still in the box.
Nye's social media presence was unremarkable for a man from this suburb just south of Toledo. He looked like just another guy who had extra equipment to offload.
Someone wanted the Husqvarna chainsaw he had advertised for $250, nearly half off the sticker price at the nearby Lowe's. Nye agreed to meet his customer at a parking lot near the Baymont Inn. The buyer got a new chainsaw, and Nye drove off in his Ford F-150 with a fresh wad of bills.
The next day Nye, 44, was behind bars; he was eventually charged with helping to lead an organized crime ring that spanned Michigan and Ohio. He is now in state prison serving a five-year sentence for his role in what police say is a growing illegal industry: massive, organized retail theft, in which internet-savvy criminals shoplift pricey items from the shelves of big-box retailers. They sell the loot on Facebook Marketplace and similar sites.
"It's big money," said Detective Sgt. Todd Curtis of the Perrysburg Township Police Department. Curtis was posing as a landscaper the day he bought the stolen chainsaw. "We're not going to put up with it. We're not going to tolerate it."
Detective Sgt. Todd Curtis of the Perrysburg Township Police Department holds a stolen Husqvarna chainsaw that he bought undercover from Richard Nye on Facebook Marketplace.David Paredes / NBC News
Curtis is one of a trio of investigators in the 23-officer department who began busting organized shoplifting rings long before a wave of cities began acknowledging the problem in recent weeks. California, Illinois and other states are reassessing their yearslong push to scale back property crime enforcement as viral videos circulate featuring "smash-and-grabs" at high-end shops across the country.
What's being overlooked, law enforcement officials and big tech watchdogs say, is the role online resale sites play in the surge.
Before the world was wired, people who resold items, stolen or not, usually had to use their names or show their faces. They bought classified ads in newspapers or went to pawn shops.
The internet changed everything. For the past two decades, law enforcement has struggled to keep up as one platform succeeded another as the preferred marketplace for stolen goods. Craigslist has continued to let users sell things anonymously, but it fell out of favor with the public as competing sites began to crop up, said Peter Zollman, the founding principal of the AIM Group, which tracks classified advertising. EBay also garnered criticism for hosting illegal activity, but officers now praise the company for accommodating them when needed.
In recent years, police say, Facebook Marketplace has increasingly become a go-to destination for organized rings that sell items ripped from big-box store shelves. In April, Facebook CEO Mark Zuckerberg told investors that Marketplace had hit 1 billion monthly users worldwide and expected the trend to continue.
In a statement, a spokesperson for Meta, Facebook's parent company, said, "Organized retail crime is an industry-wide challenge and preventing it requires ongoing collaboration between retailers, law enforcement and online marketplaces."
E-commerce experts said that as Facebook Marketplace grows, its oversight isn't keeping up. Among law enforcement agencies, the company has already gained a reputation for being so slow to respond and cooperate that investigators often have to give up or invent workarounds.
A Facebook Marketplace listing from Richard Nye.Perrysburg Township Police Department
Industry watchers say online marketplaces make it easy for criminals to offload their loot with ease.
"It's just a perfect storm of a lot of bad things being enabled all at once," said Sucharita Kodali, a principal analyst at Forrester, a market research firm. "The fact that they're so prevalent, the fact that there is absolutely no regulation around them, the fact that the marketplaces themselves are explicitly exonerated from illicit activity, which is a huge, huge flaw."
Kodali noted that current federal law protects internet companies from liability for most messages that people post on their sites.
Critics say complaints from law enforcement are yet another example of Meta's unleashing forces it can't control. Facebook has been blasted for amplifying conspiracy theories and extremism with its algorithms, and now it seems to have become America's favorite new fence.
"It's starting to look like whoever can exploit Facebook the most wins," said Jennifer Grygiel, a Syracuse University communications professor who has tracked Meta's growth over the years. "Anything goes, selling drugs, selling weapons, fencing goods.
"There's something fundamentally wrong with the Meta business model," she said.
'The Crossroads of America'
Few outside northwestern Ohio have ever heard of Perrysburg Township, an overwhelmingly white community of about 13,000 people dotted with farms and big-box stores — Target, Home Depot, Lowe's and Walmart. But residents call their home the "Crossroads of America," because it sits off both the Ohio Turnpike and Interstate 75, a highway that runs all the way from Detroit to Tampa, Florida. Shoplifting crews are drawn to the area because it's easy to steal in and even easier to drive away from, police and big-box retailers say.
Store surveillance video from Perrysburg Township shows a far different image from the one in viral videos featuring young people from big cities wielding sledgehammers. Shoplifters here are mostly white men in their 30s and 40s suffering from drug addiction, police say, who calmly walk in and then out of stores with stolen goods, blending in with other shoppers.
Shoplifting rings often pay workers in crack, heroin or cash to swipe power tools from stores, said David Skrepenski, who said he recruited thieves for Nye but didn't do drugs himself.
"You make more money than you do selling drugs, and it's less jail time," Skrepenski said from inside an Ohio prison where he is serving four years for theft. Before he was arrested, Skrepenski said, he could make $2,500 a day swiping power tools and selling the loot to ring leaders. "It's an easy fast dollar."
In the early stages of investigating a shoplifting ring, Perrysburg Township detectives check pawn shop rolls that are digitized on the website Leads Online. After a flurry of laws were enacted during the 20th century, the resale industry became more transparent. As in many states, Ohio requires shops to keep lists of sellers' identification details and what items they sold.
But Perrysburg Township cops rarely find any evidence in physical secondhand stores. Instead, Facebook Marketplace monopolizes their time, having become the area's top source of illegal transactions, police said.
Detective Sgt. Todd Curtis of the Perrysburg Township Police Department scrolls through Facebook Marketplace looking for users who are selling stolen power tools taken off store shelves.David Paredes / NBC News
Local detectives say that they've been working on organized shoplifting cases since 2010 but that in the last few years, as Facebook Marketplace has grown in popularity, they are getting slammed. Curtis said nearly all of their investigations now involve suspects who sell their stolen items on the site.
The local Lowe's and Home Depot are prime targets, and shoplifters frequently walk out with expensive equipment or do a "push out" — when a thief simply fills a shopping cart with products and then pushes it out of the store.
Because many retailers encourage employees not to alert police or chase shoplifters, criminals meet little to no resistance. Corporate officials say they do that to avoid bombarding local officers with reports of petty shoplifting and, most important, to prevent employees and customers from getting hurt.
With so few 911 shoplifting calls, undercover officers attack the problem by going on "buys" multiple times a week. They set up meet-ups in outdoor parking lots with sellers off Facebook Marketplace who offer cheap, still-in-box power tools, kitchen appliances and home improvement equipment.
That's how Curtis met the man identified as Richard Nye in police documents back in July 2019. Store investigators with Lowe's and Home Depot told police a shoplifting crew had hit several of their locations across Ohio and Michigan. Curtis and his team surfed Marketplace looking for clues.
Police found a pricey chainsaw stolen from Lowe's selling on the site for nearly half off. Curtis, posing as a landscaper, inquired about it. Nye's Facebook alias was blown once he shared his personal cellphone number with the undercover cop.
Police didn't arrest Nye after the chainsaw was swapped for $250 in cash. Instead, officers went to his home — a small white house near corn and soybean fields. Through his windows, officers could see three boxes of Lincoln Weld-Pak welding equipment worth more than $1,000. They asked a judge to sign off on a search warrant.
Cops raided the home and confiscated Nye's phone.
Stolen tools found inside Richard Nye's home.Perrysburg Township Police Department
Smartphone searches are crucial to investigating organized retail crime. Perrysburg Township sent Officer Dustin Glass to the Secret Service for computer forensics training; he learned how to use specialized data access software developed by Cellebrite, an Israeli digital intelligence company.
Cellebrite's platform can pull a suspect's text messages and pictures off a phone but not information from social media apps like Facebook.
Perrysburg Township officers say that they wait months for Meta to answer their requests and that it often blows deadlines on search warrants. They say delays weaken their cases because officers end up making arrests for low-level charges even when they have evidence that suspects are part of organized rings.
"When we call Facebook for help, we usually have to go through links, emails, things like that. We never get to speak to someone," Curtis said. "I don't know what the reluctance is. I don't know if it's manpower. I don't know if it's something that they think is not a big deal."
Instead of calling on the phone, Meta asks law enforcement agencies to communicate through the Law Enforcement Online Request System. Police use the portal to send subpoenas and search warrants to gain access to people's accounts. Officers can also ask Meta to preserve people's online activity, like their Facebook Marketplace posts.
When Meta does open a person's account, the officers say, instead of just sending the Facebook Marketplace posts and Messenger chats, it prints out a person's entire Facebook history and sends thousands of pages in a computer file.
"When it happens, it's impossible to go through," Glass said.
Perrysburg Township police finally got their first call back from Meta on the first day NBC News embedded with investigators.
Asked whether the presence of NBC News had anything to do with the timing, a Meta spokesperson said, "We always reach out to law enforcement to try to provide education on our processes and the Security Center."
Detectives say they've learned they can't wait for cooperation from Meta to build out cases. During the investigation into Nye's shoplifting ring, police pulled text messages that he exchanged with other crew members off his phone. They were also able to match pictures on Nye's device to images found in his Facebook Marketplace posts.
Nye declined to comment through a prison spokesperson. After he pleaded not guilty to a low-level charge of theft, he pleaded guilty to felony theft and state-level racketeering and is serving a five-year sentence.
'Venues for criminals'
Facebook Marketplace, which was launched in 2016, hasn't built out a system like eBay's, in which officers can work with a point person throughout a case as it moves forward. Instead, it communicates with police using the online portal to track the queries.
NBC News spoke with Meta employees knowledgeable about how the company interacts with law enforcement.
An employee who wasn't authorized to speak publicly about the company's relationship with police said Meta fields requests from not just the U.S., but also from officials all over the world. They are all asking Meta to hunt down specific information from specific users' accounts, and each country has a different legal system.
Internal stats show that Meta received about 123,000 law enforcement requests from the U.S. in 2020, a 20 percent jump from the year before. Numbers from the first half of this year show the trend continuing to tick upward. Agencies in the U.S. ping Meta the most, followed by agencies in India, Germany and France.
Neither Amazon nor eBay would share internal data detailing their growth in usage, nor any tallies on police requests to aid in investigations.
Things are so bad in Perrysburg Township that a local representative to the state Legislature, Haraz Ghanbari, introduced legislation that would require Facebook Marketplace, Amazon and other sites to verify users' identities when they sell items to Ohio residents. The state House passed the bill Dec. 8.
Surveillance video taken inside a Lowe's near Perrysburg Township, Ohio, shows a man stealing leaf blowers and generators off the shelves.Perrysburg Township Police Department
"Organized retail crime is crippling our communities. Not just in my district or the state of Ohio, but across the country," Ghanbari said. "We want to stop providing venues for criminals to do business where they are taking advantage of our residents."
At least a dozen other states are pushing for similar laws, and there is a debate in Congress over various federal versions of the bill. National chains support the Ohio proposal and similar ones that would require "high-volume" sellers, those who have sold more than $5,000 worth of items within two years, to upload their banking and contact information to sites.
Amazon, eBay and Etsy back a competing idea in the U.S. House that would require people who make more than $20,000 in online sales to disclose their information.
Tech companies argue that overregulation of online marketplaces would hurt small-business owners who use the sites and expose sellers to the risk of doxing.
Ghanbari's bill ruffled the tech community to the point that pro-internet organizations sent employees to Columbus, the state capital, to testify against it. Amazon hired on-the-ground lobbyists in Ohio. State filings show Facebook also had lobbyists in the state, but a Meta spokesperson said the contract had nothing to do with Ghanbari's proposal.
So far, Arkansas — home to Walmart's headquarters — is the only state to have passed a law that regulates third-party sellers on online marketplaces. As of this summer, third-party sellers in Arkansas who make at least $5,000 within two years are required to share their banking and identification information with the sites.
Big tech advocates said they've met with attorneys general in Illinois and elsewhere to push law enforcement to avoid online marketplace regulations and to create organized retail crime task forces, instead.
Within the past 18 months, top prosecutors in at least a half-dozen states — including Illinois, Utah and Florida — have launched such groups. The law enforcement teams pair local police with in-house investigators from retail chains like Home Depot, Lowe's, Walgreens and Ulta to build out cases.
"The beautiful thing about the task force is you bring the right people from the right organizations and the right people to actually communicate and collaborate," said Tyler Diers, an executive director of TechNet, an advocacy organization for tech titans. Diers traveled to Ohio to testify against Ghanbari's bill.
Illinois launched a task force in September. The state attorney general's office, which oversees the new teams, said officials considered whether to quickly come up with a plan to rein in online marketplaces rather than beef up enforcement. Illinois opted for the latter.
"Those partnerships will ensure that we are at least looking into the possibility that what may appear to be isolated thefts are part of a larger, organized criminal enterprise," Illinois Attorney General Kwame Raoul said in a statement.
Ohio has no plans to launch a task force, officials said.
A few weeks ago, Perrysburg Township police arrested two members of a Texas-based group. Police said the pair flew into Ohio and stole from Walmart and Home Depot before they were caught. For now, they are charged with low-level theft, but detectives are hard at work building a case with national reach.
Detectives are in talks with Target to determine whether the men were part of a ring that stole from stores across various states, including Texas. "It's not particularly unusual to see cases crossing state lines," said Brian Harper-Tibaldo, a Target spokesperson.
From behind bars and with his voice muffled by a surgical mask, David Skrepenski said that while his retail theft career in Perrysburg Township was lucrative, he regrets it looking back. He urged big cities grappling with organized retail crime to learn from the small-town department that arrested him and his ring.
Said Skrepenski, "They are light years ahead of everyone else."