textfiles/law/fencesp06.law

June 1991                                                         

                                                                 
                          ROP-ing IN FENCES                            

                                  By

                            James Rainum
                              Officer
                       Repeat Offender Project
                    Metropolitan Police Department
                          Washington, D.C.,
                             Nancy Brown
                            Investigator
                       Repeat Offender Projcet
                    Metropolitan Police Department
                          Washington, D.C.
                                  and
                         Raymond Smith, Jr.              
                           Special Agent
              FBI's Washington Metropolitan Field Office

                                                                  
     To Dickens Oliver, he was Fagan, the "...villainous-looking
and repulsive..." trainer of young pickpockets. (1)  In
Sinclair's "The Jungle," he was Rosensteg, "...the pawnbroker,
who would buy anything...for one third of its value and
guarantee to keep it hidden for a year." (2) All of us are
familiar with the sleazy characters in the alley wearing
trenchcoats lined with jewelry and a dozen watches on their
arms.  The fence is not only a part of our fiction and our
folklore but also our everyday lives as well.

     There are considerable difficulties inherent in building
and prosecuting cases involving fences.  For the most part,
departments don't have programs specifically directed at fencing
operations.  However, this article explains how fencing markets
and operations run, how to build cases against these offenders,
and how to prosecute offenders successfully.  By using the
Washington, D.C., Metropolitan Police Department's and the FBI's
ROPTIDE Program as an example, this article explains the steps
that law enforcement agencies can take to curtail, or end,
fencing operations in their respective jurisdictions.

BUYING AND SELLING STOLEN GOODS                                   

     Because very few items are stolen by a professional thief 
for personal use, it is the fence who determines who will receive 
stolen goods.  The thief may steal to support a gambling or drug 
habit, pay off substantial debts, or for many other reasons.  In 
each case, unless the thief can directly use the stolen product,
it must be converted to cash.  There must be a market for the
stolen product, and this need is satisfied by the activities of
the fence.

THE MARKETPLACE

     The market for stolen products is everywhere and so are the
customers.  The underground economy of stolen property is so
substantial that "Forbes Magazine" recently published an article
on the fencing business. It describes fencing as a business
where "...inventory turnover is slow, but markups run 900%.
Your suppliers will expect cash, but their prices are dirt
cheap.  There are legal risks, but they are minimal." (3)

     One of the most common ways to convert property to cash is
for the thief to act as the fence, selling the merchandise to
customers on the street.  As with any business, success depends
on customers knowing where the goods will be sold.  Shoplifters
and petty thieves hawking their merchandise from plastic bags
are a common sight, as are car trunks loaded with electronic
equipment, clothing, tools, and other items.  These thieves
often receive 50% or more of the retail value of the
merchandise.

FENCING BUSINESSES

     A true "fence" is usually considered to be an established
businessperson--one who knowingly purchases stolen property and
redistributes it in any fashion for profit.  In fact, most
fences operate legitimate businesses in conjunction with their
illegitimate fencing activities.  In many cases, the business
may have started out as a legitimate operation, but evolved into
a fencing activity for the most obvious reason--increased
profits.

     Almost any type of business can become involved in fencing
activities.  Retail stores can resell items shoplifted from
stores that carry the same items.  Construction businesses can
use lumber and equipment stolen from other job sites.  Appliance
stores and contractors can purchase new appliances stolen from
homes under construction.  Junk and scrap yards, pawnbrokers,
and secondhand and antique stores are the most common sources
for fencing enterprises.  Though police departments attempt to
regulate these activities, they are often difficult to control
or investigate.

LAW ENFORCEMENT AND FENCING OPERATIONS

     For law enforcement agencies, building a fencing case can
be problematic.  All jurisdictions have laws dealing with the
receipt of stolen property.  For the most part, each contains
elements which show that the police department must prove that
the property was stolen.  However, this is often difficult to
prove without an admission that the receiver knew the property
was stolen.  Retail stores seldom maintain updated and accurate
inventory records.  Citizens, for the most part, do not record
the serial numbers of their property, and lumber, tools, and
other construction supplies seldom have identifying marks.

     Even if undercover police officers posing as burglars sell
merchandise to a fence, which they represent as stolen, the
violation only constitutes the misdemeanor of attempting to
receive stolen property because the item sold was not actually
stolen.  Additionally, because they are business people, most
fences are very personable and many are even established in the
community.  As a result, few in law enforcement and the
community are willing to expend the effort and money necessary
to charge this type of criminal with a misdemeanor.

STING OPERATIONS

     Most departments attack thieves through storefront sting
operations.  Copying known fencing operations, officers set up a
business and begin buying stolen property themselves.  As a
result, thieves can be identified, stolen property is recovered,
and multiple arrests can be made.  However, disadvantages of
using this technique include extremely large outlays of money,
personnel, and time, which most departments either are unwilling
or unable to make.

THE STOLEN PROPERTY STATUTE

     Using an innovative approach to the fencing problem, the
District of Columbia approved the Trafficking in Stolen Property
statute included in the Theft and White Collar Crimes Act of
1982. (4)  This law took the Receiving Stolen Property statute
one step further and directly addressed those who purchased
stolen property with the intent to redistribute for profit.

     The law simply states that anyone who sells or disposes of
stolen property in any form for profit on two or more occasions,
or anyone who receives stolen property on two or more occasions
with intent to redistribute for profit, is guilty of a felony,
punishable by a $10,000 fine or 10 years' imprisonment or both.
What makes this law unique is that the property does not have to
be stolen.  As long as the person possessing or receiving the
property has reason to believe that property is stolen, it is as
good as stolen in the eyes of the court.

"ROP" PROGRAM

     Washington, D.C., clearly needed a specific police program
to enforce these new laws that had the potential to clamp down
on fences.  The same year that the trafficking statute came into
being, the Metropolitan Police Department formed its Repeat
Offender Project.  Better known as ROP (pronounced rope), the
project began as a proactive policing experiment.  Basing its
concept on the idea that a minority of criminals committed the
majority of crimes, ROP targeted individuals who were believed
to be committing five or more Part I offenses (5) per week.

     Officers handpicked for the experiment were told they could
use any legal, moral, and ethical means necessary to put the
target suspects behind bars.  The project's success was
outstanding, and ROP was made a permanent unit within the police
department.  Shortly thereafter, administrators decided that ROP
could also be used to deal with the fencing problem that faced
the city.

     ROP and the new trafficking law were practically made for
each other.  Though the new law made cases against fences easier
than ever, the work necessary to build a good case demanded more
than the street officer or average detective was able to give.
Surveillance and undercover work were necessary, along with a
supply of desirable bait property that the undercover officer
could sell to the fence.  Because of the operational creativity
afforded to ROP, these problems were overcome, and during the
winter of 1983, the law was first used to build cases against
prominent fences in the metropolitan area.

TWO CASE STUDIES

     Intelligence determined that the owner of a grocery store
located in the southeast section of Washington, D.C., was buying
stolen food stamps and other merchandise.  ROP began a joint
investigation with the U.S. Department of Agriculture and sent
an undercover officer into the store on three occasions to sell
the owner bait property consisting of food stamps and electronic
items.  The food stamps, supplied by the Department of
Agriculture, and electronic items donated by an area retail
store were clearly represented as stolen by the undercover
officer.  After the owner exchanged cash for stolen property,
search warrants were obtained and served on the store and at the
store owner's home address in Maryland.  Stolen property was
recovered from both locations, and the store owner was convicted
in D.C. Superior Court of Trafficking in Stolen Property.

     With this experience under its belt, ROP tackled several
other fencing operations. However, two problems quickly became
evident.  First, because of the nature of fencing (along with
the size of the District of Columbia), the investigations
usually extended outside the jurisdiction of ROP.  Second, the
supply of bait property was usually donated by local retail
stores, and some of the merchandise, such as jewelry, simply
could not cover the need.  In searching for a solution to these
problems, ROP turned to the Washington Metropolitan Field Office
of the FBI.  The cooperative efforts of these two law
enforcement agencies proved to be effective as cases were made
and criminals were prosecuted successfully.

     The working relationship developed fully between the two
agencies when they solved an important case in February 1987.
ROP had uncovered a fencing operation working out of a
Washington, D.C., restaurant.  The restaurant was run by two
brothers who were prominent figures in the local community.
They were buying large amounts of stolen property, specifically
items dealing with horses, and transporting them to one of the
brother's horse farm in Virginia.  There the items were being
sold from a tack shop on the farm.

     Using both FBI and ROP informants, an undercover officer
began selling "stolen" property to the brothers after being
introduced to them by another thief.  When ROP's supply of bait
property quickly ran out, the FBI supplied over $10,000 worth of
items to be sold.  Once the case was developed, ROP and the FBI
were co-affiants on the search warrants, which were executed in
both Virginia and D.C.  Items valued at approximately $2 million
were seized, representing property stolen in burglaries in
Virginia, Maryland, and D.C.

ROPTIDE                                                           

     Based on this and other successes, the Washington Field
Office of the FBI and ROP formed a property crimes task force
known as ROPTIDE in May 1987.  ROPTIDE began with one FBI
Special Agent and the ROP Squad, which consisted of one sergeant
and six officers.  It has since grown to six Agents, two
sergeants, and nine officers.  In addition, detectives from
other surrounding departments assist with investigations that
involve their jurisdictions and continually provide intelligence
to help the task force select new targets.

     ROPTIDE has three target thief categories that are
consistently investigated.  The first is that of new home
construction site burglars and their fences.  During 1988,
construction companies in the Washington, D.C., area lost in
excess of $6 million of materials and equipment.  The second is
that of home and office burglars and their fences.  The third is
that of professional and repetitive auto thieves and their
outlets (chop shops, etc.).

     When a target is identified, it is handled as a separate
case.  One FBI Agent and one ROP officer are designated as the
case investigators.  Together, they decide how to address the
investigation and develop an investigative plan to include the
use of different strategies, such as bait property, an
undercover operation, consensual monitoring, closed-circuit
television coverage, and informants.  The Agent then makes a
request for funds from FBI Headquarters, and upon receipt of the
case funds, the undercover investigation begins.

     In the interim, the investigators conduct additional
background work, including surveillance, use of informants,
analysis of telephone records, and other investigative
techniques.  This work is performed by ROPTIDE as a whole, not
just by the lead investigators.  Funding for the operation is
provided by the FBI.  These cooperative efforts proved to be
successful in curtailing fencing activities.  As of April, 1991,
ROPTIDE has led to 276 arrests, 201 indictments, 224
convictions, and the recovery of approximately $8 million in
stolen property.

CONCLUSION

     By drawing on the talents and resources of the two
agencies, ROPTIDE has allowed the investigators to overcome
obstacles that would have seriously crippled past fencing
investigations.  And, cases have been tackled that would have
overwhelmed any department or agency working on its own.
ROPTIDE has recently been praised as being a very cost effective
operation having a real impact on the crime problem in the
Washington, D.C., metropolitan area.

     Fencing operations contribute greatly to the level of crime
and economic fraud wherever they occur.  Cooperative law
enforcement efforts and a directed program against fences can
prove to be successful deterrents to this crime.


FOOTNOTES

     (1)  Charles Dickens, Oliver Twist (New York:  The New
American Library, Inc., 1980).

     (2)  Upton Sinclair, The Jungle (New York:  The New
American Library, Inc., 1960).

     (3)  Steve Weiner and John Harris, "Hot Retailing," Forbes
Magazine, August 7, 1989, vol. 144, No. 3.

     (4)  Washington, D.C. Law 4-164, secs. 22-3831 and 3832.

     (5)  A Part I offense, as described by the FBI, includes
rape, robbery, homicide, burglary, arson, assault, and theft.