Special Agent, NICB Chicago- Midwest 815/651-4260 scovey@nicb.org - - PowerPoint PPT Presentation

Steve Covey Special Agent, NICB Chicago- Midwest 815/651-4260 scovey@nicb.org Midwest Cargo Security Council

midwestcargosecuritycouncil.com

What we’ll cover….

What cargo theft is / isn’t Types / MO’s / Groups Preventative tip ips / / a couple le thin ings that mig ight help lp

Cargo Theft is the criminal taking of any cargo including, but not limited to: goods, chattels, money, or baggage that constitutes, in whole or in part, a commercial shipment of freight moving in commerce, from any pipeline system, railroad car, motortruck. or other vehicle, or from any tank or storage facility, station house, platform, or depot,

• r from any vessel or wharf, or from any aircraft, air terminal,

airport, aircraft terminal or air navigation facility, or from any intermodal container, intermodal chassis, trailer, container freight station, warehouse, freight distribution facility, or freight consolidation facility. For purposes of this definition, cargo shall be deemed as moving in commerce at all points between the point of

• rigin and the final destination, regardless of any

temporary stop while awaiting transshipment or otherwise.

What is Cargo Theft ??

WAREHOUSE BURGLARIES TRAILER / CONTAINER THEFTS TRAILER BREAK-INS MAJOR INTERNAL THEFTS

WHATS THE DIFFERENCE BETWEEN ORC & CARGO ?

ORGANIZED RETAIL CRIME (ORC) = OFF THE SHELF CARGO THEFT = IN TRANSIT, ANYWHERE BETWEEN MANUFACTURER & THE SHELF

Why Should We Care?

• Overseas Profits - where’s the

money going

• Gangs & Organized Crime –

Huge Profits

• Retail costs passed back to the

consumer

• Public Safety *
• Food / Product Tampering

Tied to Multiple Chicago Cargo Thefts

Post arrest intelligence showed ties to Syria, Lebanon & Palestinian areas. Where’s the money going? Hezbollah Hamas

Kansas and Surrounding States

Definitions and Scope

• This slideshow includes statistics on cargo theft events that occurred in Kansas

and nearby states in 2014-2017 current to September 10, 2017.

• The states included include: MO, KS, AR, OK, IA, CO, and NE.
• Commodity data is measured in the total number of commodity categories

reported stolen.

• Events involving more than one commodity will have each commodity category counted once.
• Loss value data is measured in the sum of the loss value.
• All other charts are measured in the total number of cargo theft events reported

to CargoNet.

Theft by State

AR OK MO NE CO KS IA 2017 5 2 1 1 3 1 1 2016 8 11 3 1 4 4 2015 16 3 2 5 1 4 2014 12 5 7 5 5 10 15 20 25 30 35 40 45

Number of Reported Cargo Thefts

2014 2015 2016 2017

• Arkansas has the most recorded cargo thefts in this analysis, followed by Oklahoma and Missouri.
• In 2016, reports of cargo theft in Arkansas decreased by 50% year-over-year. While Oklahoma increased by 266%, Missouri

+50%, and Kansas +300%.

• Cargo theft in Colorado spiked in 2016 and 2017.
• Generally, this region loses just over $2 million to cargo theft a year. This only accounts for the value of the cargo and not

the vehicles or any other costs associated with the theft.

Theft by Quarter

2014 2015 2016 2017 Q4 13 6 12 Q3 6 3 9 3 Q2 5 9 3 7 Q1 6 24 9 4 5 10 15 20 25 30 35 40 45 Number of Reported Cargo Thefts Q1 Q2 Q3 Q4

• Generally cargo thefts stay fairly low within the region between Q2 and Q3.
• Cargo thefts increase in Q4 and continue to increase through the first quarter of the following year.

Theft by Day of the Week

Sun Mon Tue Wed Thu Fri Sat 2017 2 3 1 1 7 2016 4 2 4 2 7 7 7 2015 7 3 3 2 9 5 13 2014 3 3 12 4 4 2 2 5 10 15 20 25 30 35

Number of Reported Cargo Thefts

2014 2015 2016 2017

• Saturday had the most reported cargo thefts in this region.
• In 2015 and 2016, cargo theft in this region spiked on Thursday and remained high until Sunday.
• Saturday and Tuesday have had the most cargo thefts in 2017 YTD.

Theft by Commodity

Food and Beverage Electronics Household Other Metals Vehicles and Accessories Apparel and Accesorries Commercial/I ndustrial Building Materials Pharmaceutic al/Medical Unknown Personal Care/Beauty 2017 3 2 2 5 1 1 2016 7 15 2 1 2 2 1 3 2015 22 4 3 2 1 1 2 2 3 2 2014 5 4 4 2 5 4 4 3 1 5 10 15 20 25 30 35 40 Number of Reported Cargo Thefts 2014 2015 2016 2017

• Food and Beverage products are the most targeted in this region. Meat products are the most stolen commodity sub

type followed by alcoholic beverages.

• In 2016, theft of food and beverage products dropped in favor of electronics. Oklahoma and Arkansas have the most

electronics thefts year over year. The most targeted electronics in this region are computers, cell phones, and cell phone accessories.

• Currently in 2017, “Other” commodities increased by 400% from 2016.

Theft by Location Type

• “Other” locations are the most common theft locations in the region. These include locations such as residential neighborhoods, airports, and rail yards.
• Following “Other” are truck stops and warehouse locations. However, without theft by fictitious pick up warehouses would be a less common theft location.
• In 2017, secured yards are the most targeted location followed by truck stops, warehouses, and parking lots.

Other Truck Stop Warehouse/ DC Secured Yard Parking Lot On Route Unsecured Yard Carrier/Ter minal Lot Side of Road Drop Lot 2017 1 2 2 6 2 1 2016 3 2 7 5 8 4 2 1 1 2015 16 9 7 6 1 1 1 1 2014 11 10 4 2 2 1 5 10 15 20 25 30 35

Number of Reported Cargo Thefts

2014 2015 2016 2017

Theft by Incident Type

Theft Burglary & Theft Fictitious Pick-up Theft - Attempt Shortage 2017 10 4 2016 20 5 4 4 2015 26 10 5 1 2014 23 2 5 10 20 30 40 50 60 70 80 90

Number of Reported Cargo Thefts

2014 2015 2016 2017

• Straight thefts are the most common incident type. This means the theft was not fraudulent in nature.
• Warehouse break-ins and trailer break-in/pilferages are classified as burglary and theft incidents.
• Four or five fictitious pickups were reported in this region a year. Fictitious pickups most commonly targeted

Several different types of cargo thieves

• 1)

Trailer burglars / shoppers

• 2)

Local crews with CDL’s, will steal FTL, unspecific targets

• 3)

Traveling crews, targeted loads & high value product

• 4)

Fictitious / Fraudulent Pickups **Theft crews often overlap MO’s……..Organized vs Disorganized

Shoppers

Trailer break-ins from lots, truck stops, “secure” yards

Rear of a truck stop at I-80 & Rt 47, Morris, IL Sony PS3 from a trailer - $25K Enfamil from an I-39 truck stop recovered during a traffic stop by state troopers

Local/Regional Crews

Similar to shoppers but drivers will be involved and steal full trailers of products, which usually are not targeted. Usually stay in a single metro area & steal from repeat targets.

Chicago’s Most Prolific

• Active crew responsible for millions

$$ in thefts in the Chicago area

• Utilize multiple chase cars for

counter-surveillance

• Vehicles equipped with surveillance

cams & other gizmos

Organized Traveling Crews

Targeted loads, usually high value Practice the same MO, whether on a burglary, truck theft or document fraud Will travel hundreds of miles to commit a single theft Long weekends & Holidays

Local cell phone warehouse targeted multiple times by organized Cuban crews June 2011

• Cubans staying in Chicago

suburbs - rented van from O’Hare, brought their TT

• Police placed a tracker on

van while Cubans were having lunch

• LG Warehouse under Cuban

surveillance…Cubans under police surveillance

• Load of 19,000 cell phones

leaves facility in a TT/ST, followed by van & TT

• Police instruct driver to park

at truck stop off I-65, Indiana

• Cubans broke into truck but

were confronted by truckers & scared off

• 2 in custody; 3 outstanding

Cellphone Rooftop Burglary

Chicago Suburbs Two Full Trailers of cell phones, worth several million Dollars stolen over Superbowl weekend

2009 Fire Escape Access to Rooftop: Wooden pallet used to climb to Ladder

2009 Rooftop entry: Most likely tool used: cordless circular saw

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$1 $11.5 Mi 1.5 Mill llion

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Cell Phon Phone e The heft ft J Jan anua uary y 20 2009 09 Is Is You

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Security room had a secure door, however it was adjacent to the lunch room and separated by drywall

Recent HV Thefts - Computer products & a Familiar MO

Niles, Michigan Late October 2017 Computer monitors Entire rig stolen when driver was in TS Dickson, Tennessee November 26, 2017 Mixed electronics Team drivers in TS for 10 minutes; rig stolen

Both loads originated at known computer/electronic warehouses

Fictitious Pickup= Huge Profit, Minimal Risk

Bad guys get: 1) The Stolen Product 2) Sometimes get paid for delivery 3) File an Insurance Claim for the product they steal 4) Commit a crime very few understand

What is a Fictitious Pickup?

• Fictitious pickups are criminal schemes that result in the theft of

cargo by deception. Typically this involves offenders posing as truck drivers using fake IDs or fictitious businesses set up for the purpose of diverting and stealing cargo.

Types of Fictitious Pickups

Once the suspects have been awarded a load they have two choices. 1. Pickup the freight themselves (traditional method, popular in 2013-2014) 2. Double broker the freight to an innocent carrier and have them pick it up and deliver to a location of their choice (new method, popular in 2015-2016).

• May also include them giving the carrier an empty trailer to
• use. This is called a “power only” move.

How is the load booked?

• 1. Steal the identity of a legitimate carrier.
• 2. Change the company’s phone number from the legitimate business

number to the burner phone.

• 3. Book a load with an unsuspecting broker. When the broker is reviewing

the company’s information they appear to be legitimate as the bad guy’s information matches the company information provided on Safer. Note: Thieves are able to change the company’s information by filing an updated MCS-150 form. This can be done electronically or by mail. Applicable to new method only

How is the load picked up?

• Once the offenders obtain a load from a broker, they re-broker the freight to a

legitimate carrier. Mostly, they target small, local carriers.

• In most cases, the offenders specify it's a "power only" move and provide a trailer for

the legitimate carrier to load. The purpose of providing a trailer is to minimize access to trailer identifiers and to avoid trans-loading or cross docking the freight. Typically, trailers that are provided to the carrier are cold plated or have etched/altered VINs.

• Depending on the location of the shipper, carriers are instructed to pickup the freight

and drop it at an industrial location within 200 miles of the shipper.

• The carrier arrives at the destination and met by the suspects and paid in cash.

Usually the rate is 30-60% more than average.

• Once the cash is provided the thief will attach their tractor to the loaded trailer and

drive away.

What evidence is left behind?

• Fraudulent name, phone number, and email address.
• Fraudulent carrier packet.
• Only true evidence left behind is driver information for the legitimate

carrier who was hired by the thieves. Note: majority of the time driver’s recall the suspicious activity, but had no true intentions of committing cargo theft.

Kansas Fictitious Pick Up Case March 2016

• In March of 2016 there were three fictitious pick ups committed in

three separate Kansas municipalities: Holcomb, Liberal, and Dodge City.

• All three fictitious pick ups targeted meat products.
• March 17, 2016 – Dodge City – Pork Shoulder - $83,000
• March 17, 2016 – Liberal – Beef - $172,000
• March 19, 2016 – Holcomb – Beef - $162,000

Best Practices

Due Diligence

• Verify that the carrier has been in operation for more than a year. This can help prevent fictitious

pickups by companies setup to steal freight.

• Investigate the carrier’s operating authority to see if it was reissued, transferred, or reactivated.

Note: Actors with bad intentions seek to buy or otherwise procure a deactivated authority to show an operating history. This is a red flag.

• Verify that the carrier provides a physical address and not a P.O. Box, mail drop, or virtual office.

Insurance Coverage

• Request the certificate of insurance from the insurance provider — always. Don’t accept an

unsolicited copy of their insurance or trust the contact information on an unsolicited copy. Do your own research.

• Check for variations in the certificate’s font, as well as spelling errors and other typos.
• Contact the insurance provider for a copy of the exclusions page; make sure they're covered

to haul this commodity.

Keeping yourself protected….

* Vetting Carriers & Drivers * Security Measures – Physical Security * Common Sense Practices & Policies * Do you know who’s watching your facility? * Know who you’re going to call for help (before the problem)

Use a Layered Approach!

Targeting Local Loads

Cellphone video recovered from Caesar Carrillo, courtesy of Broadview, IL, Police Carrillo was casing a beer distribution warehouse lot on Fridays, making note of local trucks. He was responsible for 7 known FTL beer thefts between July 2016 and March 2017 which occurred on Friday and Saturday nights.

2013 Same place Same fire escape

Camera quality & Placement

1) HD Quality? 2) Can the camera be obstructed (by a stack of pallets, a truck, etc? 3) Does sunlight or artificial light mess up the view during certain times of day? LED vs mercury vapor 4) Is the camera in a dusty/grimy area – can it be accessed for cleaning? 5) Is it positioned to capture the info you want….license plate, face, etc.

Don’t let these guys near your property

Ghosting, Paper Placards & Companies that look questionable

Vetting potential business associates

• Internet checks… Safersys.org , free FMCSA
• Word of mouth… check with other companies
• Local Cargo Security Councils / National Associations / Conferences
• Make friends with the police before your problem happens

SAFERSYS http://www.s .safersys.org/

18 power units, uses paper placards? Is the address legit? How’s the operating status looking? Check out the SMS & Insurance….

Photo to the right shows the same hasp, re-soldered

The benefit of cargo security councils

• Police contacts, LE in your area with expertise in cargo crimes

& conversely help the police

• Private sector contacts – are other companies experiencing the same

problem you have?

• Intel / Information sharing
• BOLOs – resource distribution to members
• councils are based in Texas, Tennessee, Georgia,

Illinois, New Jersey, California but handle surrounding states

Western States Cargo Theft Association – North

Chairman – Sgt. Ward Radelich wradelich@chp.ca.gov Office: 510-622-4614 Cell: 510-715-6529 www.wscta.com

Northern California Western State Cargo Theft Association - South

Chairman –Dennis Chapman dennisofmcl@Verizon.com Cell: 909-762-5654 www.wscta.com

Southern California Southwest Transportation Security Council (SWTSC)

Chairman – JJ Coughlin jj@swtsc.com Cell: 214-649-6441 www.swtsc.com

TX/NM/OK/AR/LA

Security Councils

Mid-West Cargo Security Council

Chairman – Steve Covey 815-651-4260 scovey@nicb.org

Illinois Eastern Regional Transportation Security Council

Chairman – Kurt Duesterdick kurt.duesterdick@ertsc.net Cell: 732-336-1829

NJ/NY Virginia Carolinas CSC

Chairman – Mike Johnston mike.johnston@dsc-logistics.com Cell – 610-574-3763 VA/SC/NC

Southeastern Transportation Security Council (SETSC)

President – Bob Hastings invbob@bellsouth.net 678-863- 6715 www.setsc.org

GA/FL/AL/MS Mid-South Cargo SC (MSCSC)

Chairman – Brad Clement Richard.clement@fedex.com Cell: 901-937-9986

TN/MS/AR

Security Councils

Steve Covey Special Agent, NICB Chicago- Midwest 815/651-4260 scovey@nicb.org

www.midwestcargosecuritycouncil.com

Questions?

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