Commercial crime costs small business big

Methamphetamine addiction drives almost all crimes against businesses from vandalism to records theft

According to the Clark County Sheriff’s Office, an acre of commercial property generates an annual average of 13.3 calls for service, compared to only 1.2 for an acre of single-family residential property. In 2000, only about 20 percent of police reports filed with the sheriff’s office and Vancouver Police Department were from commercial locations; in 2004, that figure had climbed to over 23 percent.

Commercial crime in Clark County is significant, and it is growing. Police departments divide commercial crime into "blue collar crimes" – shoplifting, burglary and vandalism – and "white collar crimes" such as credit card and check fraud, identity theft, information theft, Internet scams and counterfeiting.

If it isn’t nailed down…

The construction industry is hard hit by blue collar crime. Karen Blythe, executive director of the Construction Industry Crime Prevention Program of the Pacific Northwest, said that theft from Washington and Oregon construction sites costs the construction industry $26 million annually.

“The criminals are smarter and bolder than ever before,” said Blythe.

She recounted how thieves attempted to steal aluminum stairs from a job trailer in broad daylight. Ron Frederiksen, president of Vancouver-based RSV Construction Services, had thieves hotwire an RSV forklift, then use it to load construction materials onto a "getaway" trailer. Another time, thieves stole an entire job trailer full of blueprints and permits. Frederiksen estimates that construction theft has cost his firm $10,000 to $15,000 each of the last three years.

The biggest targets at construction sites, said Frederiksen, are tools, metal, and equipment. Metal is especially popular, said Blythe, because metal prices are at an "all time high," netting the thieves a nice profit.

Construction sites aren’t the only theft targets. Recently, Clark County had a rash of nursery thefts. Shelley Deal, co-owner of GW Deal Landscape Nursery, said their nursery was hit four times in three weeks this spring. Although tools and equipment are insurable, nursery stock is not.

"We lost $25,000 to $30,000,” said Deal. “It about pushed us over the edge."

GW Deal employees began taking detailed notes of people who showed up at the nursery “just to look around,” and began marking their pots. Working in concert with the sheriff’s office, these efforts resulted in three arrests.

In the getaway car on the information superhighway

While some thieves concentrate on copper connectors and Japanese maples, others are after less tangible, but even more valuable goods – information. Identity theft is one of the fastest growing crimes, with almost ten million reported victims in 2004 nationwide. The problem is especially serious in Washington, where 5,654 complaints were filed in 2004, putting Washington in the top ten states based on per capita reporting of ID theft.

Detective Ed Hewitt has spent six-and-a-half years in the Vancouver Police Department’s Major Crimes Unit, investigating white-collar crime. He stated that he has seen a 100 percent increase in the sheer volume of criminal activity relating to credit card fraud, forgeries, and ID theft in the last five years.

"It’s out of control," said Hewitt.

Commercial businesses are attractive to identity thieves, said Hewitt, because of economy of scale – a thief can walk into a mortgage office or dentist clinic and steal hundreds of complete files, with social security numbers, bank account information, addresses etc. ID theft often happens during business hours. The thief gains access to a business, perhaps posing as a vendor or construction worker, and steals laptops that contain sensitive customer data.

The fraud associated with ID theft is another growing concern for retailers and banks. Check fraud is so serious that the banks don’t like to reveal the extent of the problem. But according to American Bankers’ Association data, financial institutions lost at least $677 million to check fraud in 2003. Smaller banks tend to be hardest hit. In 1999, community banks reported that 56 percent of their check fraud-related losses could be attributed to ID theft, compared to only 5 percent at super-regional banks.

The meth mess

Whether it’s metal theft or ID theft, there is one common thread amongst the criminal activity in Clark County: methamphetamine.

"85 to 90 percent of all criminal activity is related to meth," said Hewitt. "I’ve seen only one case of ID theft that was not tied to meth."

John Posey, President of Vancouver-based Corporate Security Services Inc. concurs. He said that if the meth problem was eliminated, "ID theft and its collateral fraud would go away."

In an effort to eliminate the meth problem, the police department has implemented the Washington State Meth Watch Program, which attempts to stop meth quot;cookers"; from purchasing meth ingredients (such as cold and allergy medicines, acetone, and gas additives). Local Watch partners include 7-11, Arco Quick Stop, B&B Food Mart, Grocery Outlet, Hi-School Hardware, Minit Mart, Safeway, St. Johns IGA, Walgreens, Wal-Mart and WinCo.

Posey cited the “cumulative cost of crime” as a major factor in high prices for goods and services. Security Officer Magazine stated that ID theft and fraud cost Americans some $437 million in 2003, while IDC (a major global market intelligence and advisory firm in the information technology industry) estimates that security spending will increase to $38 billion this year.