Cargo theft is an organized crime, not a property crime

DorogaRoad: Let’s talk about cargo theft. There are several organizations in the United States that monitor this type of crime. One of them is Freight Watch International. According to their data truck loads containing 487 million of goods were stolen in the US in 2009. It was a 67% increase over 290 million worth of product swiped a year earlier. “We know that over about half a million worth of property disappears every day in the Greater Toronto Area alone”, said Greg St. Croix, VP of Marsh Canada in his recent interview to the media. How accurate do you think this estimation is?

Dan Dimitroff: Half a million every day?

DorogaRoad: Yes.

Dan Dimitroff: We get about 20 (cases, DR) a month here in the region of Peel. Not sure how many Toronto gets, they don’t keep stats on the cargo theft separately. Let’s say that Toronto gets 30 a month, and York and others around the GTA get another 15 a month. So if we say 60-65 load thefts a month with an average (I think underestimating would do about $100,000 per load), so…

DorogaRoad: It comes to a roughly similar figure.

Dan Dimitroff: Those numbers are comparable.

DorogaRoad: They believe that thefts of consumer goods are directly related to the economy. People steal things that they can get rid of quickly, and consumers are looking for a deal. What do you think about the relation between the situation in the economy and thefts?

Dan Dimitroff: Absolutely. The economy plays a large role in the number of cargo thefts right now. But I think it’s more than just people looking for a deal because the economy is bad. I think the biggest part of it is that companies aren’t making enough right now because there isn’t a lot of money to be made with the recession, and therefore some of them are making fraudulent claims to insurance companies. Their load is sold and distributed, it was never stolen but it’s reported stolen, and the insurance money is coming back to the company. So there is an influx of 70 thousand dollars, or 150 thousand dollars, whatever the case may be, into that company, and that keeps the company afloat for a period of time.

DorogaRoad: It’s a different type of crime then.

Dan Dimitroff: It’s still considered a load theft because it’s reported as load theft but we know that they are going on. We know that these insurance frauds are going on and they are contributing to the statistics of load crimes but they are not actually load crimes, you are right, it’s a different kind of crime.

DorogaRoad: And of 100% of the cargo theft crime, how much of fraud is there in the whole picture?

Dan Dimitroff: I would be guessing, and an educated guess would be about 25-30% is fraud, insurance fraud; the load is never actually stolen. And then you’ve got some percentage of crime that is “an inside job”, as they call it. So it’s people from within the company, knowing how the company works, knowing where the security lacks and taking advantage of it. I would think in total that’s probably about 50% of the load thefts. So 25-30% is fraud and the added percentage is inside jobs where companies are hiring employees who maybe they shouldn’t hire based on their past criminal history. They are getting the knowledge about how the company works and through their connections they are stealing these loads. And about 50% are just legitimate regular load thefts where guys are just out there looking for something to steal.

DorogaRoad: It’s a huge percentage.

Dan Dimitroff: I think one of the things that you should understand is that a lot of these load thefts are inside jobs. Whoever knows that the load comes in every week at a certain time – whether they are dispatchers, drivers, whoever is involved, they actually bring it to buyers. And to be a buyer of these loads you need to have cash. Somebody buying something that valued at 150 thousand is going to have at least 30-40 thousand dollars in cash. So there are not a lot of these types of people around, who first of all get involved in this type of crime, and also with that kind of money. What happens is these people will get involved with the company, they will come to people with the money, and they will say “OK, these are the loads we have, are you interested in any of these loads?” The buyer will then say “Yes, I’d like that load right there, ok, let’s arrange for it to get stolen.” The buyer already knows it’s coming, he already reaches out to another buyer because he makes money by buying a load and selling it to somebody else. Usually the first buyer will get the whole load and try to sell the whole load. The load is already sold before it’s even in the yard, it’s already been planned, purchased and sold before it’s even there, it’s like they go shopping. And that’s how these inside jobs work. Somebody will be paid or told about the load – where it is, where it could be found, the trailer number that it’s in, the license plate that’s on the trailer, and they’ll just go in the yard with a stolen tractor, hook it up in 30 seconds and away they go. And that’s a high percentage of the loads that are stolen in this region.

DorogaRoad: What kind of goods do they usually steal? Do the crooks normally target such things as electronics, food, beverages, cigarettes, clothing and pharmaceutical goods, or it doesn’t actually matter, they can steal anything?

Dan Dimitroff: They will steal anything, sometimes loads are stolen where I’m sure the culprit doesn’t know what’s inside. They just know that it’s a load because it’s sealed. But you are right; anything that can be distributed through flea markets, dollar stores, convenience stores will be stolen. And that is canned products, food, beverages, Kleenex, whatever. Also the high value loads of electronics, TV, stereos. Then we also have tires, especially just before the winter. We always seem to lose loads of snow tires. Whatever there is a market for. Things those are hard to steal, like cigarettes are a very high value load. A load of cigarettes is a lot of money, some of them are half a million dollars. So there is usually pretty good security on those loads and people know it. The companies will have security measures in place to make sure that it gets from point A to point B. And those security measures are usually very simple. The trailer doesn’t get loaded until it’s ready to go. It doesn’t get left overnight without security. Once the trailer is loaded the driver takes it right away, and the driver is not allowed to stop. The driver goes straight from point A to point B. And if the driver is not stopping anywhere, and it’s coming to the next warehouse in Montreal or wherever, and it’s being offloaded that same day, it’s not going to get stolen. So these cigarette loads are difficult to steal, as well as things like beer and alcohol. You can see that it would be a hot item to steal but the problem with beer and alcohol is that they are a little harder to distribute. If you are distributing Kleenex boxes, they could be from a grey market, they could be purchased at a cheap price from somewhere. But when you have got a truck load of beer, everyone who is buying it knows that it’s been stolen because you can only buy it from LCBO or Beer Store. This guy selling beer is not an authorized dealer for beer. That’s why those loads are not stolen as often as they would be otherwise.

DorogaRoad: Sometimes victims of cargo thefts such as trucking companies, shippers or retailers avoid reporting crime to the authorities in the fear that their reputation may be tarnished or damaged. How reluctant are they to report crime, from your experience?

Dan Dimitroff: From my experience, I don’t think that they are. It’s not like the police make it public. Say, a company’s product got stolen. In order for them to make an insurance claim there has to be a police report and a police number, an insurance company won’t deal with them otherwise. I can see how companies, especially trucking companies – their business is based on liability to customers, how they wouldn’t want their reputation tarnished by something like this. But I have never come across any companies not reporting to the police for that reason. I don’t think it happens very often, if at all.

DorogaRoad: What do you think – cargo theft is a property crime or an organized crime?

Dan Dimitroff: Cargo theft is an organized crime. You have to have a network of people involved in order to move a truck load of property. I worked in drugs for seven years before this, and no matter how many drug dealers you arrest there’s going to be more of that pop up and replace them, it’s a never-ending battle, you just do your best and you are not even coming close to making it a dent. But here auto and cargo theft is different because there are a finite number of people who are at the level that I talked about before who have enough money and the resources and the connections to actually buy these loads and to distribute them. And these people are organized crime. They are generally involved in other things, other than the sale and distribution of stolen property. Drugs always come after this. And like I said, we have a very limited number of people, in this region, in GTA who are actually at that level where they can buy loads of product and sell it. Let’s say there is a guy, he is addicted to crack, and he needs money. He steals a load of batteries. He can sell a few of them to a few people, but where is that guy going to keep a load of batteries? Someone is going to tell that he’s got this load of batteries. Who does he sell it to? He has to have a connection. And there has to be an organized distribution system in place, otherwise he can’t do it, so it’s an organized crime.

DorogaRoad: Can you provide some samples of recent investigations, when cargo was recovered, and thieves were caught?

Dan Dimitroff: Sure. It was May long weekend here in Canada. We’ve got some information that some property was being stored in a warehouse, and it was almost before we even got the report on paper, so it was just in the same weekend, or just after the weekend. We set up surveillance on this place where we get the information that it’s at and the person was arrested coming out of it. We prepared a search warrant, and the next morning we went in and found three loads of property that had just been stolen on the weekend.

DorogaRoad: What kind of goods were in these loads?

Dan Dimitroff: There were lawn mowers, TV sets, and the third load of just children’s toys and juice. The value of the three loads was about $800,000. We got another one recently. We know the people who are involved at the high level. We know who they are because we constantly talk to confidential informants, people in the business. And we know, they all tell us the same thing, which guys are at which level and what they are doing. It’s just a matter of catching them. And sometimes it’s difficult because sometimes they are very good at what they do, and they are very smart, and they are not kids. They are older, and they know ways of the police seeing it. So it’s difficult to catch these guys sometimes but we know who is doing it. One individual – he’s been doing this type of things for years in this region and I’ve heard about him as soon as I started in this commercial auto crime unit – he had no criminal record. I ran him on our local occurrences, and there were tons of different things on him involving stolen property, but never any convictions. I had been getting information on this guy for long time, so we did surveillance on him, and eventually from the surveillance we found him going to a storage unit. When we moved in the storage unit that was full of stolen property, and we got search warrants for three warehouses that had been discovered based on following him. In these three warehouses we found 10 or 11 stolen loads, and it’s not like there were other loads mixed in that were legitimate loads. The only loads in these warehouses were stolen loads. It’s not like, say, we are in a liquidation business, and we get all sorts of loads, and people come and they know I am in a liquidation business and they offer a load to buy, and I buy it not knowing that it’s stolen. He only had stolen loads, so it will be interesting when it comes to court time. And another one that comes to mind – we’ve got information from a confidential source that an individual was involved in this. We knew that this guy was involved in it before but we just didn’t have enough, but we were able to get some good information on the location of this guy’s warehouses. So we did again surveillance on him, and eventually we got lucky. Another confidential informant came forward with the same information and sort of cooperated with the first individual, so now we had enough to do search warrants. So we did search warrants on 3 warehouses and his personal property – and 18 stolen loads on that one. And I forget how many million dollars worth of property were there.

As you can see from these examples, cargo theft is not one or two individuals just stealing loads one time or a couple of times a year for their own purposes. It’s an organized network, and the guys we arrested with the loads are not the guys who are stealing. The guys who are stealing – among them are drug addicts or kids or those who have access, and they will go out there and take the risk of stealing. The organized guys are the ones who are moving these things and making money.

DorogaRoad: What do you think the trucking industry could do to prevent or minimize cargo theft?

Dan Dimitroff: I would like to see first of all the insurance companies put standards on the trucking companies. So if you are getting insurance for your company, these are minimum security standards that you have to employ. If you don’t have these security standards or you break any of these rules, we don’t cover your load. We have loads all over the GTA that are stored in areas that have no security at all. These loads are there, people can go in with their tractor, hook them up in 30 seconds, and they are gone. There is hardly anything to prevent them from being stolen. If we had proper security measures in place we wouldn’t have a fraction of those loads stolen in the GTA. Until that happens, it’s going to continue. When I talk to some of my colleagues in the United States, describing to them what our trucking security measures are in Canada, they laugh. Because where they are located they’ve got fences, barbed wire, dogs, proper security in and out. The say if they wouldn’t have all these things there, those measures, the truck or load wouldn’t be there for a night! But here we are very relaxed on our practices, and I would say that most security heads of the companies that lose loads say that yes, these rules are in place but over time these rules get slacken, and people don’t follow them anymore. That leads to that fact that people internally who wants to steal something to knowing ways to be able to do it. There are basic ways that the trucking industry can do to prevent these thefts. One of the best things we’ve had recently is GPS in tractors.

DorogaRoad: And in trailers.

Dan Dimitroff: Yes, and if you’ve got a load you want to protect, put it in the product. I know it’s more difficult but people are now expecting to find these things in tractors or trailers, so they’ll get rid of the tractor and trailer really fast, but the product – they won’t get rid of it. So there will be a GPS in the product which will lead us to where it is. So if you want to get the product back (you get the tractor and the trailer back because your GPS is in it), which is the most expensive part of that load, it would be good to put one in there as well. I don’t think that the cost is that high anymore, that prevents companies to do that. Then, I know from talking to a few of the companies that never have any load thefts for years and years, because their security is so good, they have measures in place to ensure that this doesn’t happen. They get it from trucking companies down in the US where crime is more prevalent than here in the GTA. Some companies actually have machines that you can swipe your driver’s license through. So the guard is there at the gate, you use your carrier driver’s license, swipes it through to get your information and sends you on your way. And those people actually have a camera in the guard’s booth that focuses right on the driver’s face. Just that alone will deter people from trying to do things.

DorogaRoad: We pretty much covered the topic – is there anything else you would like to add with regard to cargo theft?

Dan Dimitroff: Cargo theft is looked upon by the society I believe as property crime. There are no victims because these are insurance companies that need to pay money and they are not looked upon as victimized. And without sort of bashing anybody, the police department also treats it like that as well – like it’s a property crime that people don’t care about too much. We had increased our cargo theft unit now to three people, and we are getting a fourth coming soon, so the Peel police are definitely taking it more seriously. Courts – I’m not sure how seriously they view cargo thefts. We are going to see, we’ve got a number of cases through the justice system right now. It would be good if we could see this more as an organized crime, see these people for what they are, and see that these people aren’t just involved in property crimes, and it’s not just a few boxes of Kleenex on the back of a truck – these is a serious organized crime network. If we can shut it down it really will take a real toll on the criminal activity in the region, not just cargo theft – other things as well, including drugs. It will have an effect.

DorogaRoad: Thank you for your time, Dan.

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