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“Most people wouldn’t think that buying an off-the-truck designer bag could fund terrorism. In my three decades of experience as a former Detective Investigator with the NYPD and now running a private investigation firm, I can say that Hitha understands and explains why this is a dangerous mentality to have. In Black Market Billions, she spells out why the mindset that a stolen designer handbag is a bargain disappears once you consider that your purchase may be funding a deadly organized crime group.”
—Thomas Ruskin, Former NYPD Detective Investigator and President of CMP Protective and Investigative Group, Inc.
“Written like a financial thriller, Black Market Billions shines a bright light on the dark side of capitalism. The book opened my eyes to what really goes on behind the scenes in high-end retail, and the best part is you can feel her courage and passion on every page.”
—Lawrence G. McDonald, The New York Times Bestselling Author, A Colossal Failure of Common Sense
“Black Market Billions is a must-read for all government policymakers, business leaders, opinion makers, and consumers. With global markets in chaos, states in recession, and extremists waging war against civilization, few topics are as vital to our security as the nexus between organized retail crime and terrorism. This book will change the debate as we come to understand just how much terrorism depends on funds raised by crime. This is an immensely important book for understanding why terrorism remains part of modern politics and why societies must find ways to cut off the financial tentacles of support.”
—William C. Martel, Associate Professor of International Security Studies, The Fletcher School of Law and Diplomacy, Tufts University
“Counterfeiting is one of the least-acknowledged, most-damaging crimes of our time. In Black Market Billions, Hitha exposes this nefarious world of the violent syndicates and the crimes they commit—human trafficking, forced child labor, money laundering—and discovers that the profits fund even worse acts such as terrorism. You’ll never look at a fake Louis Vuitton handbag the same way again.”
—Dana Thomas, Author, Deluxe: How Luxury Lost Its Luster
Organized retail crime is now a $38 billion business. Synchronized global teams 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 exposé, business journalist Hitha Prabhakar connects the dots and follows the money deep into the world’s fastestgrowing 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 their multimillion-dollar ripoffs are funding everyone from Al-Qaeda to Central America’s drug lords.
Black Market Billions draws on extensive first person interviews with law enforcement, industry personnel, and the criminals themselves. Prabhakar goes “inside” to reveal why the piracy economy has exploded...why preventative measures have failed...and what to expect next, as organized retail crime reaches a terrifying critical mass.
• Inside the massive, worldwide “piracy economy”
How organized retail crime went global—and what it means to you
• The money trail: from boosters and fences to consumers and terrorists
Shell warehouses and cargo theft: stealingfrom anyone, anywhere, anytime
• “Money laundering 2.0”: how terrorists are funded now
From ancient hawalas to twenty-first century gift cards
• Why the bad guys are still getting away with it
How terrorist funding keeps slipping through the cracks of today’s tougher laws
Introduction 1
Part I: The Piracy Economy
Chapter 1: Organized Retail Crime Goes Global 9
Why Is ORC Such a Threat? 11
The Promised Land: Money Talks 13
Made in America: Homegrown Terrorism 17
Recruiting from the Inside 19
From Prison to Gangs to the World’s Most Notorious Terrorist Group 21
Access to Funding Gets Creative 25
Burrowing In: The Hezbollah Finds a Home in the U.S. and South America 27
From America to South America: Ties Get Stronger in the Tri-Border Region 28
Chapter 2 When a Deal Isn’t a Deal 31
Getting a Slice of Luxury the Cheapest Way Possible 34
The “Real Deal” 36
Dying for a Deal: The Recession Doesn’t Make Aspirations Go Away 38
Big Takedowns Take Precedence Over Smaller Offenders 39
Counterfeiters and ORC Move Their Operations Online 40
eBay’s Swift Response 42
Too Little, Too Late 44
Lurking in the Shadows: Stolen Gift Cards Bought Online 45
Easy to Obtain, Easy to Sell 46
Fake-out: Retailers Fronting as Legitimate Stores 48
Protecting Yourself: Know the Signs of E-fencing/ORC 51
Chapter 3: The Cost to the Stores 53
The Blame Game 54
Insider Information: Employee Theft and ORC 54
Human Resources Fail: Hiring the Wrong People 56
Wholesale Scam: Terrorist-Affiliated Warehouses Sell to the Little Guy 61
Taking a Bite Out of the Balance Sheet: Economic Downturn Fosters Cargo Theft 64
Coordinating Information in Real Time: LAPD and APD Case Studies 67
Part II: Follow the Money
Chapter 4: The Money Trail and the Business of Cross-Border Trade 77
The Warehouse: Ground Zero for Cross-Border Trade 80
Profile of a Purchaser 81
Keeping Shelves Stocked Through Cargo Theft 83
Coveted Items: Over-the-Counter Drugs 84
Profile of a Cargo Thief 86
“Shell Stores”: A Conduit for Organized Retail Crime 87
Shell Stores Move Online 89
A Hotbed of Stolen Merchandise: Flea Markets 91
Nabbing the Bad Guys: Classifying Organized Retail Crime as a Felony 91
Insurance Companies: The Missing Link 93
The Gray Market: Another Retail Facilitator of ORC 94
Laws Have Been Passed, But Are They Helping? 95
Chapter 5: Profile of a Booster and a Fence 97
Moving the Merchandise: The Role of a Fence 100
Being Convicted as a Level 1 Fence: More Like a Slap on the Wrist Than a Slap in the Face 101
The Level 2 Booster: Inside the Mind of a Potentially Dangerous Criminal 104
Other Forms of Theft from a Level 2 Booster 106
Level 3 Boosters and Fences: A High-Level Organization Equals High Profits 108
Level 3 Boosters: Frequently Lifted Merchandise 112
Curbing Boosters and Fences: What Does and Doesn’t Work 115
Chapter 6: Family Ties 119
When Family Funds Support Terrorism 121
Assad Muhammad Barakat and His “Family” 123
Illegal Entry into the U.S. Is Not Difficult—if You Have Money 127
The Great Entrepreneurs: Terrorists 132
The Trust Factor: The Basis of Any Organized Retail Crime Ring 136
Chapter 7: Money Laundering 2.0 139
The Three Stages of Money Laundering 141
Organized Retail Crime and Latin America 151
Funneling Money Through the Black Market Peso Exchange 152
The South American, Mexican, and African Connection 155
Chapter 8: The Political Agenda 159
Homegrown Terrorism: How Retail Theft and Piracy Has Funded Terrorist Operations 160
Rebel Kids: Extremist Ideas Financed Through International ORC 163
When Things Went Awry 164
ORC Funding by Way of Somalia: A Tale of Two Misguided Kids 165
As Local as Down the Street 168
Funding Evil Under the Guise of Charitable Contributions: The Mosques 168
Muslim Charities: Capitalizing on Natural Disaster and Religious Empathy 169
Terrorist Fund-Raising Via Charities Finds Roots in the U.S. 172
Charitable Donation Loopholes: How the IRS and Banking Systems Failed to Prevent Fraudulent ORC Funds from Financing Terrorist Groups 173
Charities Turn to a Cyber Audience 175
Why the Government Can’t Regulate Charities 175
Chapter 9: Strange Bedfellows 179
How Banned TVs Funded Bombings 180
The Business of Cigarette Smuggling 183
The EC Versus R.J. Reynolds Tobacco 185
The Role of Money Brokers and Money Launderers 186
The History of Cigarette Smuggling 188
Cigarette Smuggling Funds Local Terrorism Around the World 189
Chiquita International Brands: “Either You Pay Me, or I Am Going to Kill You.” 192
Dole Foods’ Involvement with the Colombian Paramilitary 195
Part III: Putting a Band-Aid on a Broken Leg
Chapter 10: The Failure of Preventative Measures 201
Acting Locally, Thinking Globally 202
Types of ORC Theft Prevention That Are Supposed to Work But Don’t 204
A Bottom-Line Breakdown of Costs 207
Legal Issues: Defining ORC Versus Shoplifting and Shrinkage 215
Regulating the Resale Market 216
Chapter 11: Letting the Bad Guy Get Away 219
Regulation Epic Fail: How Banking BSAs and AML Programs Let Terrorist Funding Slip Through the Cracks 222
Continued Failure to Regulate IFTs: The Costs to Local and Federal Governments as Well as Retailers 223
Failure to Regulate Hawalas 224
IFTs Get Sophisticated: Stored Value Cards 227
Bulk Cash Smuggling Comes in a Smaller Package 228
Retailers Feel the Pain of SVC Fraud 230
Credit Card Fraud Is Even Worse 231
RICO Defined 234
Why ORC Rings Still Exist: Money Laundering and the RICO Statute 235
More Problems with RICO: It’s in the Definition 236
Laws That Once Protected Potential Terrorists Have Changed 239
Defining “Material Support” and “Coordination” 239
Epilogue 243
Glossary 247
Endnotes 271
Index 299
Anonymous
Posted April 24, 2012
The author's journalist background clearly shows - the book reads like a very long magazine expose article meaning it's not too stuffy or academic sounding. It is a little disheartening, though, to learn how it seems so easy to carry out organized retail crime.
1 out of 1 people found this review helpful.
Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.Anonymous
Posted April 8, 2012
I found the detail on how and why of this retail crime interesting. It is illuminating that a lot of the crime is driven by the retailers themselves. They are buying merchandise from the black market in order get items at below retail cost. It is these same retailers who are being stolen from. I see a lot of blame placed on Muslims, Hispanics, Government, and consumers. The retailers are treated as victims, when there is blame enough for them as well. It is scarcely mentioned that to save money, retailers fired long term employees and replaced them with cheap short term employees. This creates a climate of a lack of loyalty in labor and managment. A lot of this crime is facilitated by managment, and front line workers. This dynamic could be explored in more detail.
1 out of 2 people found this review helpful.
Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.Anonymous
Posted August 30, 2012
No! *begins a game of tug-of-war with the Ocarina*
Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.plappen
Posted April 7, 2012
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.
Anonymous
Posted April 23, 2013
No text was provided for this review.
Overview
“Most people wouldn’t think that buying an off-the-truck designer bag could fund terrorism. In my three decades of experience as a former Detective Investigator with the NYPD and now running a private investigation firm, I can say that Hitha understands and explains why this is a dangerous mentality to have. In Black Market Billions, she spells out why the mindset that a stolen designer handbag is a bargain disappears once you consider that your purchase may be funding a deadly ...