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It is the costliest crime in America, according to the Federal Bureau of Investigation. Organized crime drives it, money fuels it, and it has gone international. It happens nearly three times a day somewhere in America, and in California it happens twice as often as anywhere else in the nation.
We’re talking about cargo theft — the high-cost, big-time crime that you’ve likely never heard about.
“It really is huge,” said California Highway Patrol officer Xavier Spencer. “We estimate nationwide that it’s a $35 billion loss annually just in cargo theft and obviously that only involves the cargo theft that we’re made aware of. A lot of these thefts are not reported.”
Spencer is part of the CHP’s Cargo Theft Interdiction Program or CTIP, and is one of 10 people on the force assigned to fight cargo theft full time in the state. He and just three other men cover the entire region north of Los Angeles County up to the Oregon border.
For the past three months the NBC Bay Area Investigative Unit went undercover with CTIP investigators to expose this major crime. Reporters and producers went behind the scenes to track down stolen shipping containers in Stanislaus County; rode along on stings to look for lifted cargo in Gilroy; watched recovery operations at the Port of Oakland and reviewed surveillance video the team used to track down suspects.
“A lot of times these guys will go park their trucks at the truck stop and go inside and clean up or get something to eat and they come out and their trailers and tractors are gone,” Spencer said. “Somebody just stole it within 30 seconds.”
He says often times truckers pull up to an unmanned cargo truck, attach their cabs to the containers and drive away. Other times he says thieves will simply unlock the doors of the trailers and hand-unload the cargo inside. They make off with tons of merchandise — everything from electronics to drugs, computers to military supplies and weapons to wine — that they steal, hide in warehouses and then sell for profit.
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Last year the National Insurance Crime Bureau logged 1,215 cargo theft incidents across the country. That’s up 17 percent from 2010. According to a report from Cargo Net, an offshoot of NICB, California led all states with 304 occurrences of cargo theft in 2011. That’s more than $390 million in theft in the state in just the last two years alone. Texas was second on the list with 173 instances of cargo theft, followed by Florida with 146 occurrences.
Those three states plus New Jersey, Illinois and Georgia accounted for 75 percent of all cargo stolen off of American highways last year. According to the report, food was the most commonly stolen item, followed by electronics, metals and clothing. Data from Freight Watch International, a logistics security provider, the largest cargo heist last year happened in Fremont when drivers made off with $37 million dollars worth of microchips in one haul.
Victims of cargo theft frequently take big hits to their businesses. Griselda Bautista, owner of the Oakland-based warehousing company PCCS Inc., lost $65,000 worth of merchandise in 2008 when a trailer carrying a load of copy paper was lifted from her parking lot.
“It was picked off by a trucker,” Bautista said. “He just came in and broke the pin lock and took off. I couldn’t believe it. I was very upset. Everything that we went through, we lost. I mean, we almost went out of business the year after that because it was a hit that was a mark on your name.”
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Bautista eventually found the trailer in Oakland on International Blvd., but the cargo was gone.
“It’s American pirates — that’s what you got.” Bautista said. “We definitely learned a lesson about leaving a load out there that was unattended.”
In April Spencer filed a federal case that resulted in the indictment of five suspects accused of lifting more than $2 million worth of cargo over the past five years. The suspects involved in Bautista’s case are included in those charges. According to federal court papers, stolen cargo was traced to and from California and places like Alabama and Maryland, even South Korea and Israel.
The CTIP team says cargo theft operations are often times run by organized crime, and international in scope. In June Spencer’s colleague, CHP investigator Mark Locey intercepted a stolen cargo load of plastic resin worth $154,000 that was on its way to Asia.
“It eventually wound back up on the ship going to the Port of Hong Kong,” Locey said. “It had been sold to a company in China.”
Locey prevented the delivery of the plastic resin once he discovered that it had been stolen. He turned it back around in the Pacific Ocean, and seized the load once it returned to the Port of Oakland.
Over the past four months, Locey located more than $500,000 worth of cargo allegedly stolen by the same person who reportedly took the cargo load of plastic resin. That man is now facing 14 felony counts associated with stealing and selling cargo and shipping containers.
Right now cargo theft is a low-risk, high reward proposition because the crime carries minor criminal penalties. Steal a half-million dollars-worth of cargo and a criminal might get six months in jail, according to various law enforcement agencies. Compare that to ten years in prison if a thief gets caught with a half million dollars-worth of cocaine.
“It’s very difficult to prove that everything you recovered was stolen,” Spencer said. “So, sometimes District Attorneys are not willing to take a case that’s going to take a little bit of work.”
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Partly for that reason this crime has largely been kept a secret for years, even as it grows in California and across the country. The CTIP team says that the problem is also being kept quiet by the very industry being victimized.
“Some smaller companies would rather not let other trucking companies know they suffered a loss due to the fact that they don’t want to lose business,” Spencer said. “So, they’ll just have the insurance company pay it off and really not report the losses, so there are a lot we don’t know about.”
And that, says the men who fight this every day, costs each of us in the form of higher prices passed on to consumers as companies lose more and more money off of stolen cargo loads.
“Every consumer that goes into the store to buy something,” Locey said, “chances are they are paying for the cost of this type of theft.”
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