Authors: Hitha Prabhakar
Black Market Billions: How Organized Retail Crime Funds Global Terrorists (Gal Zentner's Library)
Praise for
Black Market Billions
“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
Black Market Billions: How Organized Retail Crime Funds Global Terrorists
Hitha Prabhakar
Vice President, Publisher: Tim Moore
Associate Publisher and Director of Marketing: Amy Neidlinger
Executive Editor: Jeanne Glasser
Editorial Assistant: Pamela Boland
Development Editor: Russ Hall
Operations Specialist: Jodi Kemper
Senior Marketing Manager: Julie Phifer
Assistant Marketing Manager: Megan Graue
Cover Designer: Alan Clements
Managing Editor: Kristy Hart
Project Editors: Jess DeGabriele and Jovana San Nicolas-Shirley
Copy Editor: Gayle Johnson
Proofreader: Seth Kerney
Indexer: Erika Millen
Compositor: Nonie Ratcliff
Manufacturing Buyer: Dan Uhrig
© 2012 by Hitha Prabhakar
Publishing as FT Press
Upper Saddle River, New Jersey 07458
FT Press offers excellent discounts on this book when ordered in quantity for bulk purchases or special sales. For more information, please contact U.S. Corporate and Government Sales, 1-800-382-3419,
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Printed in the United States of America
First Printing November 2011
ISBN-10: 0-13-218024-3
ISBN-13: 978-0-13-218024-5
Pearson Education LTD.
Pearson Education Australia PTY, Limited.
Pearson Education Singapore, Pte. Ltd.
Pearson Education Asia, Ltd.
Pearson Education Canada, Ltd.
Pearson Educación de Mexico, S.A. de C.V.
Pearson Education—Japan
Pearson Education Malaysia, Pte. Ltd.
Library of Congress Cataloging-in-Publication Data:
Prabhakar, Hitha, 1975-
Black market billions : how organized retail crime funds global terrorists / Hitha Prabhakar.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-13-218024-5 (hbk. : alk. paper)
1. Black market. 2. Shoplifting. 3. Smuggling. 4. Organized crime. 5. Terrorism--Finance. I. Title.
HF5482.6.P73 2012
363.325--dc23
2011023166
This book is dedicated to the memory of my grandmother Susila—the ultimate truth teller.
Contents
Chapter 1 Organized Retail Crime Goes Global
Why Is ORC Such a Threat?
The Promised Land: Money Talks
Made in America: Homegrown Terrorism
Recruiting from the Inside
From Prison to Gangs to the World’s Most Notorious Terrorist Group
Access to Funding Gets Creative
Burrowing In: The Hezbollah Finds a Home in the U.S. and South America
From America to South America: Ties Get Stronger in the Tri-Border Region
Chapter 2 When a Deal Isn’t a Deal
Getting a Slice of Luxury the Cheapest Way Possible
The “Real Deal”
Dying for a Deal: The Recession Doesn’t Make Aspirations Go Away
Big Takedowns Take Precedence Over Smaller Offenders
Counterfeiters and ORC Move Their Operations Online
eBay’s Swift Response
Too Little, Too Late
Lurking in the Shadows: Stolen Gift Cards Bought Online
Easy to Obtain, Easy to Sell
Fake-out: Retailers Fronting as Legitimate Stores
Protecting Yourself: Know the Signs of E-fencing/ORC
Chapter 3 The Cost to the Stores
The Blame Game
Insider Information: Employee Theft and ORC
Human Resources Fail: Hiring the Wrong People
Wholesale Scam: Terrorist-Affiliated Warehouses Sell to the Little Guy
Taking a Bite Out of the Balance Sheet: Economic Downturn Fosters Cargo Theft
Coordinating Information in Real Time: LAPD and APD Case Studies
Chapter 4 The Money Trail and the Business of Cross-Border Trade
The Warehouse: Ground Zero for Cross-Border Trade
Profile of a Purchaser
Keeping Shelves Stocked Through Cargo Theft
Coveted Items: Over-the-Counter Drugs
Profile of a Cargo Thief
“Shell Stores”: A Conduit for Organized Retail Crime
Shell Stores Move Online
A Hotbed of Stolen Merchandise: Flea Markets
Nabbing the Bad Guys: Classifying Organized Retail Crime as a Felony
Insurance Companies: The Missing Link
The Gray Market: Another Retail Facilitator of ORC
Laws Have Been Passed, But Are They Helping?
Chapter 5 Profile of a Booster and a Fence
Moving the Merchandise: The Role of a Fence
Being Convicted as a Level 1 Fence: More Like a Slap on the Wrist Than a Slap in the Face
The Level 2 Booster: Inside the Mind of a Potentially Dangerous Criminal
Other Forms of Theft from a Level 2 Booster
Level 3 Boosters and Fences: A High-Level Organization Equals High Profits
Level 3 Boosters: Frequently Lifted Merchandise
Curbing Boosters and Fences: What Does and Doesn’t Work
When Family Funds Support Terrorism
Assad Muhammad Barakat and His “Family”
Illegal Entry into the U.S. Is Not Difficult— if You Have Money
The Great Entrepreneurs: Terrorists
The Trust Factor: The Basis of Any Organized Retail Crime Ring
Chapter 7 Money Laundering 2.0
The Three Stages of Money Laundering
Organized Retail Crime and Latin America
Funneling Money Through the Black Market Peso Exchange
The South American, Mexican, and African Connection
Chapter 8 The Political Agenda
Homegrown Terrorism: How Retail Theft and Piracy Has Funded Terrorist Operations
Rebel Kids: Extremist Ideas Financed Through International ORC
When Things Went Awry
ORC Funding by Way of Somalia: A Tale of Two Misguided Kids
As Local as Down the Street
Funding Evil Under the Guise of Charitable Contributions: The Mosques
Muslim Charities: Capitalizing on Natural Disaster and Religious Empathy
Terrorist Fund-Raising Via Charities Finds Roots in the U.S.
Charitable Donation Loopholes: How the IRS and Banking Systems Failed to Prevent Fraudulent ORC Funds from Financing Terrorist Groups
Charities Turn to a Cyber Audience
Why the Government Can’t Regulate Charities
How Banned TVs Funded Bombings
The Business of Cigarette Smuggling
The EC Versus R.J. Reynolds Tobacco
The Role of Money Brokers and Money Launderers
The History of Cigarette Smuggling
Cigarette Smuggling Funds Local Terrorism Around the World
Chiquita International Brands: “Either You Pay Me, or I Am Going to Kill You.”
Dole Foods’ Involvement with the Colombian Paramilitary
Part III Putting a Band-Aid on a Broken Leg
Chapter 10 The Failure of Preventative Measures
Acting Locally, Thinking Globally
Types of ORC Theft Prevention That Are Supposed to Work But Don’t
A Bottom-Line Breakdown of Costs