THE MODUS OPERANDI OF CARGO CRIME – By Alan F.Spear

Every day reports of stolen cargo cross my desk here in Chicago: thefts in Georgia, Texas, California, New Jersey, Illinois,Mexico, China and Europe; thefts of electronics, computer parts, pharmaceuticals, clothing, foodstuffs, metals, wood, tires, and any other product that can be sold or bartered on the market. The variety of commodities stolen, and the methods used to steal them is constantly amazing.

The most common MO (modus operandi) for large scale theft is the theft of an unattended trailer or container. It is an unfortunate reality that there are more trucks in the United States than there are parking lots, and certainly more trucks than there are secure parking lots. Given that fact, is it any wonder that drivers leave trucks at unsecured truck stops, retail parking areas, on the street or in vacant lots? The majority of container and trailer loads of cargo that are stolen are taken when the load is unattended. Some of these thefts are random, and are carried out by people who arrive on the scene with a bobtail (no trailer attached) tractor, hook on and drive away. Others are carefully planned, with research into the expected cargo, the route, the schedule and the driver’s habits. Some involve driver complicity.

Some thefts involve fraud. Some years ago a freight broker in Memphis posted a load of electronics on the internet looking for a trucker to take the load from Atlanta to Miami. They received a call from a man stating he was with XXX Transport, and that he had a driver nearby who could pick up the load the next morning. While XXX Transport was familiar to the broker, the man calling was not, so they obtained a phone number to call him back. When they called, a female voice answered “XXX Transport”. They asked for the man by name and were told he was on a call, but that if they could wait a moment, he would take their call. A minute went by with “muzak” playing, and he came on the line, confirmed his identity, and provided the broker with a number to which documents for the load should be faxed. They sent out the documents, the driver arrived the next morning, the shipper loaded his truck with electronics, and he left. Six hours later he called the broker and reported that he had experienced engine trouble on the highway to Miami so would be late. They advised the consignee and awaited his arrival the next day. The next day came and went and the load was never seen again. Investigators later found that the number they called for verification was a mailbox/business service office in Miami and that the woman and man had rented a phone from them for a morning. The fax number turned out to be at a motel on I75.

In 2003, a completely legitimate trucker was contacted by a major manufacturer and told to pick up a load of computers in St. Louis for delivery to Toronto. The trucker arrived the next day, picked up the load, and delivered it to a warehouse in Toronto where he was met by personnel in company uniforms. The manufacturer, which had done business with the buyer before, sent out an invoice, and received a call asking why a bill had been sent since no order had been given. Investigators discovered that documentation that exactly duplicated purchase orders from the supposed buyer had been made up in the business office of a Toronto hotel and sent to the manufacturer. The warehouse location in Toronto was found to be empty, and discarded company uniforms were found in a back room.

A large group, mostly Cuban, has operated a sophisticated theft ring out of Hialeah,Florida for a number of years now. We estimate that they have stolen over $300,000,000 in cargo in the United States since 2000. Arrests of members of this gang have been made in California, Ohio,Illinois,New Jersey, and a number of southeast states. One of their most common MO’s is used for warehouse burglaries:

First, they check out the location. The loading docks are watched (either from inside or nearby) so confirm the type of cargo going out. Patterns of loading and delivery are documented. Then, usually over a weekend, and often on holiday or special event weekends when police are busy, the alarm system at the warehouse is set off. The thieves sit back and wait for the first responders to come. After they leave, they set off the alarm again, and again they wait. Eventually, the first responders decide that the alarm is faulty and don’t come back, and the thieves enter the warehouse and spend all night emptying the cargo into trucks. In November of 2006 they stole 65,000 cell phones valued at $13,500,000 from a Chicago suburb using this technique. Particularly vulnerable are warehouses without back-up alarm systems. Investigators later found cumentation that six trucks had been stolen locally and used to haul the cargo. People using fake Cuban names, but Florida addresses, had registered in local hotels. A rental car, later noted as having been driving through the neighborhood, was found to have been rented to a Florida driver. This theft occurred over the Thanksgiving weekend. A similar theft, but during a summerfest event, had occurred not five miles away in 2005.

These are but a few of the methods being used. As industry tightens up its security, the thieves find new ways to break it. (Note: all of the above stories are based upon actual events, but the facts have been altered to protect the companies involved.) As modern industry has tightened its procedures, thieves have improved their own methods and technologies. Shippers, carriers and underwriters need to be aware, and need to keep up with methods to protect cargo in transit.

Alan F. Spear, Director
Cargo Security Loss Control
AIG Global Marine
May 1, 2007
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