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ALEXANDRIA, Va. The federal government should crack down harder on organized criminal activity against retailers with stiffer penalties and tougher oversight, a Walgreens representative told Congress today.

Addressing the U.S. House Judiciary Subcommittee on Crime, Terrorism, and Homeland Security, Walgreens security expert Frank Muscato discussed the growing problem of organized retail theft and its impact on chain drug stores. His testimony came as Congress mulls three bills aimed at combating organized retail crime, or ORC.

“ORC is an extremely sophisticated and coordinated crime,” Muscato told the House panel. “It involves highly structured organizations and gangs that hire and control teams of thieves to steal merchandise in large quantities.

“The legislation currently being considered would make ORC a federal criminal offense, which would be extremely helpful in prosecuting more of these large, multi-jurisdictional cases,” Muscato added. “ORC is not garden variety shoplifting. It is organized crime and should be treated as such with stronger penalties and enforcement.” 

Organized crime drains more than $30 billion a year from retail business, according to the National Association of Chain Drug Stores, resulting in increased costs for merchants, higher prices for consumers, and lost tax revenue for state and local governments. “These crimes are perpetrated by sophisticated crime rings that often use the proceeds to fund other criminal activity,” NACDS noted.

The hearing examined three bills that would combat organized retail crime: H.R. 6713, the “E-fencing Enforcement Act of 2008;” H.R. 6491, the “Organized Retail Crime Act of 2008;” and S. 3434, the “Combating Organized Retail Crime Act of 2008.” The E-fencing Enforcement Act was introduced by Rep. Robert Scott [D-Va.], chairman of the Subcommittee on Crime, Terrorism and Homeland Security.

“Organized retail crime drains businesses, harms consumers, and sustains illegal activities that jeopardize public safety,” said NACDS president and CEO Steven Anderson. “We applaud Chairman Scott and his colleagues for their commitment to stopping this growing problem.”

NACDS is a member of the Coalition Against Organized Retail Crime, established to address the large-quantity theft and re-selling of products such as infant formula, over-the-counter medicines, health and beauty aids, razor blades, batteries and electronics through flea markets, pawn shops, small retail establishments, and online auction sites.

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