Organized crime is behind spate of retail thefts: Coalition of Law Enforcement and Retail president

President of Coalition of Law Enforcement and Retail Ben Dugan joins Yahoo Finance Live to discuss how organized thefts are becoming an increased concern for retailers.

Video transcript

KARINA MITCHELL: Welcome back to Yahoo Finance. Well, a string of disturbing smash and grab robberies has malls and stores beefing up security this holiday season across the country, particularly in California, where another mob of thieves ransacked a shoe store in Santa Clara County just outside of San Francisco yesterday. Joining us with more on this story is Ben Dugan, president of Coalition of Law Enforcement and Retail, and Yahoo Finance's Dani Romero. Thanks to both of you for being here. What is emboldening these groups, sir?

BEN DUGAN: Well, they're actually-- what we're experiencing is kind of a perfect storm. They're actually being recruited by criminal organizations that are getting involved in what's called organized retail crime. That's really been on the rise since 2017 with the expansion of most of the online marketplaces. But what we're seeing now and what we saw over the last week is people being recruited by these criminal organizations to commit these bold and brazen thefts on their behalf.

DANI ROMERO: Yeah, and Ben, to that point, why are they so young, getting involved in all of this? I mean, just on Friday, about eight to nine people in LA, young men, stole tools from a local Home Depot store.

BEN DUGAN: Yeah, yeah. Yeah, and unfortunately, I don't think some of these young folks understand how much trouble they're really getting into. They're really getting involved with criminal organizations that recruit them and convince them that there aren't going to be any consequences, and in some cases, or most cases, actually, provide them with rental cars, escape routes. They use burglary tools. In some cases, they bring weapons. They plan these events with these young folks with the understanding that there's a high propensity for violence and they have no regard for human life or for the consequences.

ALEXIS CHRISTOFOROUS: And I know that playing a part in all of this is that there are very few arrests. Can you talk to us a little bit about why that is? It seems to be one of the reasons, you know, that these people feel emboldened to do this. They think that they can just very easily get away with it. I mean, if you see some of the footage, they're not even running away. They're nonchalantly walking away with all of this merchandise.

BEN DUGAN: Well, there's-- you're exactly right. But there's only been a few arrests so far. I will tell you, in California, for example, the California Highway Patrol has probably the best organized retail crime task force in the country. And just because you weren't arrested at the time of the event doesn't mean you're not going to be arrested. The police deploy a lot of different tactics to identify these folks. And I'm very confident that a large portion of these folks eventually will be arrested. Now we'll see what happens on the prosecution side. And a lot of them, depending on their age, that'll be a variable. But there will be a lot of arrests. The police are working very hard to identify a lot of these folks, as are the retailers.

DANI ROMERO: Yeah, and when you see these smash and grab robberies, you know, they're obviously-- you see that they're organized, planned robberies. But at the same time, employees at that retail store, as well as security guards, they're not able to really do anything. And so what is the solution? And is that really-- yeah, what is the solution? And is that really the future?

BEN DUGAN: Yeah, well, we have to-- first and foremost, we have to do everything to keep our employees and our customers, our stores, and the communities that we serve as safe, all right? And so we're very careful. We train-- retail employees are trained very carefully not to engage people at certain levels to keep them themselves safe. There's nothing in the store worth anybody getting hurt for. And in the immediate future, retailers are investing millions of dollars this holiday season in reaction to a lot of these recent thefts and upgrading their security, adding a lot of physical security, technology, resources, manpower, off duty police. You'll see a much bigger police presence during this holiday season to try to combat it.

And then, in kind of the interim, we're standing up some organized retail crime task forces, not just in California, but in every major city, right, to combat this problem because it's a nationwide problem. And long term, we've introduced some federal legislation called the Informed Consumers Act, which will finally regulate the online marketplaces. So people cannot hide between the shadows of the internet and operate anonymously without their real names and lists millions of dollars in stolen product every day. So it's a three-- kind of three-bucket solution that we're looking for.

DANI ROMERO: And Ben, I know that you mentioned earlier that the California Highway Patrol is now going to be helping in California with some of the security and patrolling. I was at the Topanga Mall in California just this past weekend, and I saw that LAPD also deployed a task force. They were outside, as well as inside. But does that really scare off any of these robberies? I mean, I feel like you would think, right, as a consumer, that you're seeing these police patrol. Is that really, like I said, a big solution, having these task forces deployed?

BEN DUGAN: Yes. Well, yes. The short answer is yes, but it's not sustainable, right? It's short-term, right? To make sure everyone we get through this epidemic and get through the holiday season with as little problems as we can. So, yes, I think it's working. Unfortunately, we're talking about organized crime. We're not talking about just a group of young folks doing this for thrills or for personal use. You're talking about, you know, criminal syndicates, networks that employ these people.

And, you know, if one store has heavy coverage, they go on to another store, to the next store, you know? We may get-- in retail, we make it very easy for our customers to shop and make our major merchandise available. And it's very similar in store to store. So sometimes, if there's a large police presence, you know, these criminal organizations are-- you know, will pivot and go to a different retailer or to a same retailer at a different location. Most of these crews hit multiple stores a day. And I know there's been some arrests recently where they arrested these guys at the second and third store, instead of that original store. So we're talking about a sophisticated criminal network, not just, like, an isolated or chaotic event.

KARINA MITCHELL: So, look, retailers are obviously suffering a lot at the moment anyway. And this is hitting them really hard. So Best Buy says they might not be able to retain workers because nobody wants to work in a place when you never know when you're going to get looted or robbed. You know, Walgreens as well said it was shutting down five stores in San Francisco because of the increase in theft. So is this just the wave of the future? Is this what we have to get used to now?

BEN DUGAN: No, I don't think so. And a lot of stores make their own independent decisions based on their own businesses and what's best for them. A lot of retailer stores are still expanding their businesses. So but I will tell you this, right? You're absolutely right. This is-- there's a lot of different victims to this crime, right? It's not just the stores that take a financial loss. People are getting physically assaulted.

It's a tremendous burden on our employees that are traumatized by this event. Any employees that are-- I mean customers that are in the store are traumatized. And it terrorizes some of these neighborhoods that these stores operated. So there's a lot of different victims, a lot of ripple effects. But with some things that we're talking about doing, some of the things I mentioned, I'm hoping this is not the norm, that we can reverse this trend rather quickly.