This is an article that came out pre 9 /11. Read it again, but this time
rethink with post 9/11 mindset.
What seemed like an interesting crime back in August may now be relevent to
what is happening these days. This should be sent to the FBI. Note who are
the members of the cartel.
Either they are planning to poison babies or they are using the formula as a
medium for the anthrax?
A New Formula for Fraud
Powdered Mixes for Infants a Hot Item on Black Market
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By David Cho
Washington Post Staff Writer
Saturday, August 4, 2001; Page A01
It was a professional hit, with an unlikely target.
In broad daylight last February, a man entered the Safeway store on Columbia
Pike in Arlington, headed to Aisle 11 with his grocery cart and then fled
through the loading dock area with $945 in stolen merchandise.
The take: seven cases of powdered baby formula.
It happened again in May at a supermarket in Temple Hills: $900 worth of
formula gone in seconds.
Forget electronic gadgets and faux Rolex watches. One of the hottest items
on the black market right now is powdered infant food, particularly those
high-end mixes for babies with special nutritional needs, according to law
enforcement officials. FBI investigators say the theft of powdered formula,
which retails for up to $25 per 14-ounce can, is a multimillion-dollar
business for international crime organizations, which repackage the powder.
Eventually, it ends up back on grocery shelves mislabeled, putting babies at
risk.
Now some supermarkets are fighting back. Safeway executives, attempting to
stanch what the company says has become a $3 million annual loss, recently
ordered cases of its more expensive powdered formula off the shelves. Stores
in the Washington area have begun complying with the directive, which
requires shoppers to pay first, then have their formula brought to them by a
clerk.
Some Food Lion stores and other grocers have taken similar steps.
"It's kind of inconvenient, because they don't always have someone at the
[courtesy] desk," said Cathy Neston, 36, a Fairfax County mother of three. "
. . . You're talking about someone who's holding babies and now has to wait
for a clerk to go get [formula] for them."
Powdered baby formula is a lucrative target for shoplifters because of its
constant consumer base: Millions of infants in the United States alone
guzzle it down several times each day. A 14-ounce can of powder, mixed with
water, lasts on average about three days.
Once in the hands of organized crime, the formula is sometimes repackaged to
make it appear to be a more expensive variety, and expiration dates and lot
numbers are often changed, federal authorities said. It is then sold through
wholesalers to groceries small and large in the United States and overseas
-- a transaction that risks contamination and worse for its little users,
officials warn. In a half-dozen cases in recent years, the U.S. Food and
Drug Administration has asked companies to recall formula thought to have
been stolen and mislabeled.
State and federal authorities have made hundreds of arrests for formula
theft, but dismantling the organizations behind the profit-making venture
has proven difficult, law enforcement officials said.
"When I first heard of this, I laughed. It's incredible -- criminals and
powdered baby formula," said Joseph Revesz, an assistant U.S. attorney in
Fort Worth. "But it is very big. It's all over the country."
**In July 2000, the Fort Worth office prosecuted 14 people -- all but one
hailed from Lebanon, Egypt or Palestinian-controlled territory -- allegedly
linked to a powdered baby formula cartel.** One of those arrested told
prosecutors that he stole 240 cases from a Toys R Us one night. The formula
was sent to a local fencing operation housed in a rat-infested warehouse,
Revesz said. There, the powder was put into counterfeit packaging to get rid
of the "Not For Resale" labels, and the expiration dates were changed.
Eventually, the formula appeared back on store shelves across the country
for unsuspecting parents, he said.
Ten of those arrested pleaded guilty; most were given probation, according
to court records. The ring's four alleged leaders were convicted of fraud,
but a federal judge threw out the convictions on a technicality. Revesz is
appealing that decision.
While there is no figure for how much baby formula is stolen nationwide each
year, organized retail theft is a $32 billion to $35 billion business
annually, according to Brett Millar, of the FBI's interstate theft task
force.
Most Americans are naive about this underground economy, he said, though
ultimately they end up "paying for it in higher prices."
Millar said the large fencing organizations hire professional thieves who
target everyday household items such as batteries, razors, small electronics
and CDs. But "they are more interested in baby formula than any other
commodity" because it is in constant demand, he said.
The shoplifters they hire are given specific orders to fill, Millar said,
and are paid 10 to 15 cents for every dollar's worth of merchandise they
steal. Some make as much as $150,000 a year this way, he said.
King Rogers, a retired vice president with Target Corp., said that company
executives had a prison interview a few years ago with a professional thief
who had pilfered formula and other items from their stores and used the
money to pay for his children's college education. **They found the man to
be "very nervous," Rogers said, "because the people he was stealing for were
part of a ruthless organization. He was genuinely concerned for his personal
safety."** ( bin Laden maybe?)
Industry analysts believe fencing organizations have an easy time recruiting
help because professional thieves do not fear the penalty for their crime.
In most states, shoplifting is a misdemeanor, so those who do get caught and
convicted rarely see jail time and can easily pay their fines with the money
they make from stealing.
Chuck Miller, vice president of loss prevention for the Food Marketing
Institute, a trade association for grocers, said he has been working to get
lawmakers and prosecutors to distinguish organized retail theft from other
forms of shoplifting. The industry is lobbying Congress to make organized
retail theft a felony under federal law.
"These [shoplifters] are trained what to say and what to do if they get
caught. They reveal very little about their organization," Miller said. "It
s simple for them. They get caught, see a judge and, unless they've been in
that same court a dozen times or so, will be right back on the street."
Baby formula is so expensive, and thus a lucrative commodity, in part
because it is one of the most heavily supervised foods under the FDA's
umbrella, said Mardi Mountford, executive director of the International
Formula Council, a manufacturers trade group.
Every step -- from production to packaging -- is carefully regulated, she
said, because of formula's role as a primary source of nutrition for most of
the 4 million babies born in the United States each year. Mountford
recommended that parents concerned about their baby's formula ask retailers
whether they buy direct from manufacturers.
When the product has been stolen and altered, "there are no guarantees of where it's been or how long it's been sitting around or if it's been corrupted," she said. "It's the sole source of food for these babies, and there's no margin for error."
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